Investopoly Thu, 10 Sep 2026 13:26:19 +1000 https://www.prosolution.com.au/podcast/ en-au © 2026 Investopoly yes 7703a3e7-7765-58ef-a768-71451ba76407 swemyss@prosolution.com.au Stuart Wemyss & Campbell Wallace episodic false Investopoly is a twice-weekly podcast designed to help you make better financial decisions and build wealth with clarity and confidence. Hosted by Stuart (tax adviser, financial adviser, and mortgage broker) and Campbell (senior financial adviser), each episode delivers concise, practical insights grounded in real-world strategy, research, methodologies, and case studies. 

You will get two episodes each week: a main episode that deep-dives into a single wealth-building topic, and a Q&A episode that answers listener questions and real scenarios. Send your questions to questions@investopoly.com.au

We also writes a weekly blog, and many podcast topics build on those ideas and frameworks. Stuart's forthcoming book, Wealth by Design, will be available in July 2026.

]]> Buzzsprout (https://www.buzzsprout.com) investing, financial advice, property, shares, tax, borrowing, wealth, retirement, super Stuart Wemyss & Campbell Wallace swemyss@prosolution.com.au https://storage.buzzsprout.com/z5y3x8w1ne4g43xg4muvddmcc080?.jpg Investopoly https://www.prosolution.com.au/podcast/ Stuart Wemyss Campbell Wallace Ep 425: Family trust investing: Are trusts still worth it under proposed tax changes? Ep 425: Family trust investing: Are trusts still worth it under proposed tax changes? Read the blog online here. 

Two tax changes could materially alter how Australians own investments and use family trusts.

The first is Division 119, which has already been legislated and will impose a minimum 30% tax on capital gains made after 1 July 2027. The second is a proposed minimum 30% tax on distributions from discretionary family trusts, including both income and capital gains, from 1 July 2028.

The interaction between these measures creates a serious problem. Under the draft legislation, a capital gain distributed through a family trust could effectively be taxed twice. In the most extreme example, a beneficiary with no other taxable income could pay $6,000 of tax on a $10,000 capital gain—an effective tax rate of 60%. While this may be an unintended consequence, the government has not addressed it in the draft legislation.

In this episode, I explain how the proposed rules work, why they reduce the tax benefits of distributing income to adult children or lower-income spouses, and whether family trusts remain worthwhile.

The answer is that tax is only one consideration. Family trusts can also provide valuable flexibility, asset protection, estate-planning benefits and an effective structure for transferring wealth between generations. That flexibility becomes increasingly valuable as an investment portfolio compounds and life circumstances change.

I also share a real client example where a portfolio established in a spouse’s personal name grew to $3 million within 10 years. With the benefit of hindsight, a family trust would have produced a better long-term outcome. It is a useful reminder that focusing too heavily on simplicity and short-term costs can sometimes work against you.

If you already have a family trust, our default position is to do nothing for now. The proposed rules are not yet law, will not commence until July 2028 and could be redesigned, delayed or repealed before then. A proposed 3-year restructuring window may also allow assets to be moved into personal names, a company or a fixed trust without triggering capital gains tax, although stamp duty remains an important unresolved issue.

For investors establishing a substantial portfolio - particularly one likely to exceed approximately $800,000 to $1 million - we remain inclined to use a family trust where that would otherwise have been the appropriate structure. If the rules eventually take effect, restructuring into a company may provide an attractive alternative.

The central message is simple: don’t make permanent investment decisions in response to legislation that is neither final nor certain to survive. Preserve flexibility, take a long-term view and avoid jumping at shadows.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read the blog online here. 

Two tax changes could materially alter how Australians own investments and use family trusts.

The first is Division 119, which has already been legislated and will impose a minimum 30% tax on capital gains made after 1 July 2027. The second is a proposed minimum 30% tax on distributions from discretionary family trusts, including both income and capital gains, from 1 July 2028.

The interaction between these measures creates a serious problem. Under the draft legislation, a capital gain distributed through a family trust could effectively be taxed twice. In the most extreme example, a beneficiary with no other taxable income could pay $6,000 of tax on a $10,000 capital gain—an effective tax rate of 60%. While this may be an unintended consequence, the government has not addressed it in the draft legislation.

In this episode, I explain how the proposed rules work, why they reduce the tax benefits of distributing income to adult children or lower-income spouses, and whether family trusts remain worthwhile.

The answer is that tax is only one consideration. Family trusts can also provide valuable flexibility, asset protection, estate-planning benefits and an effective structure for transferring wealth between generations. That flexibility becomes increasingly valuable as an investment portfolio compounds and life circumstances change.

I also share a real client example where a portfolio established in a spouse’s personal name grew to $3 million within 10 years. With the benefit of hindsight, a family trust would have produced a better long-term outcome. It is a useful reminder that focusing too heavily on simplicity and short-term costs can sometimes work against you.

If you already have a family trust, our default position is to do nothing for now. The proposed rules are not yet law, will not commence until July 2028 and could be redesigned, delayed or repealed before then. A proposed 3-year restructuring window may also allow assets to be moved into personal names, a company or a fixed trust without triggering capital gains tax, although stamp duty remains an important unresolved issue.

For investors establishing a substantial portfolio - particularly one likely to exceed approximately $800,000 to $1 million - we remain inclined to use a family trust where that would otherwise have been the appropriate structure. If the rules eventually take effect, restructuring into a company may provide an attractive alternative.

The central message is simple: don’t make permanent investment decisions in response to legislation that is neither final nor certain to survive. Preserve flexibility, take a long-term view and avoid jumping at shadows.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19764156 Wed, 09 Sep 2026 05:00:00 +1000 2446 full false Q&A - Cash-heavy at 48, bridging to early retirement, and debt-free at 31 Q&A - Cash-heavy at 48, bridging to early retirement, and debt-free at 31 Four listeners at genuine turning points. "Steve," 48, with a wife of 54 and a large cash holding, knows he's too conservative and wants to move into ETFs ahead of retirement at 57, while supporting a special-needs adult child and navigating his wife's super unlocking first. How should that shape the inside-versus-outside-super split?

An anonymous couple on the Mornington Peninsula, 39 and 40, have built a four-property-plus-SMSF portfolio but zero borrowing capacity, and want to be work-optional by 50. Their question: how to convert growth assets into income to bridge the pre-retirement gap, build shares now, sell down resi into commercial, or buy a PPOR while Melbourne's affordable? And how worried should they be about sequencing risk?

Nick, debt-free at 31 with three young kids, can't shake the feeling that sitting mortgage-free leaves money on the table; should he debt-recycle or draw equity into ETFs, despite disliking debt?

Finally, "Paul," 35 and undeterred by the tax changes, asks the sharpest question of all: is this downturn just another one to ride out, or is it different when a government is actively trying to suppress house price growth?

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Four listeners at genuine turning points. "Steve," 48, with a wife of 54 and a large cash holding, knows he's too conservative and wants to move into ETFs ahead of retirement at 57, while supporting a special-needs adult child and navigating his wife's super unlocking first. How should that shape the inside-versus-outside-super split?

An anonymous couple on the Mornington Peninsula, 39 and 40, have built a four-property-plus-SMSF portfolio but zero borrowing capacity, and want to be work-optional by 50. Their question: how to convert growth assets into income to bridge the pre-retirement gap, build shares now, sell down resi into commercial, or buy a PPOR while Melbourne's affordable? And how worried should they be about sequencing risk?

Nick, debt-free at 31 with three young kids, can't shake the feeling that sitting mortgage-free leaves money on the table; should he debt-recycle or draw equity into ETFs, despite disliking debt?

Finally, "Paul," 35 and undeterred by the tax changes, asks the sharpest question of all: is this downturn just another one to ride out, or is it different when a government is actively trying to suppress house price growth?

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-19753485 Tue, 08 Sep 2026 05:00:00 +1000 2388 full false Ep 424: Should you hedge your international share portfolio Ep 424: Should you hedge your international share portfolio Read Full Blog Here

If you're following the case for going underweight Australian shares and leaning into global developed markets, you inherit a new question: what do you do about currency risk?

Every international investment has two return drivers: the underlying market, and movements in the Australian dollar, and this episode is a clear-eyed guide to whether you should neutralise the second.

Stuart explains what hedging actually does, why it never removes 100% of currency risk, and the single most misunderstood aspect of it: interest rate differentials. 

Because Australia's cash rate currently sits above the US, hedging US exposure earns a modest positive carry, but that relationship can just as easily work against you. 

He weighs the real trade-offs: the Aussie dollar is a "risk currency" that falls in a crisis, so staying unhedged can act as a shock absorber when markets tumble, while hedging makes more sense when the currency trades well below fair value.

He also covers a crucial and overlooked detail, the TOFA hedging election and its tax consequences, why bonds should almost always be hedged, and what the academic research says. 

The upshot: their default is unhedged for shares, favouring hedging only as the dollar approaches US60 cents.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

If you're following the case for going underweight Australian shares and leaning into global developed markets, you inherit a new question: what do you do about currency risk?

Every international investment has two return drivers: the underlying market, and movements in the Australian dollar, and this episode is a clear-eyed guide to whether you should neutralise the second.

Stuart explains what hedging actually does, why it never removes 100% of currency risk, and the single most misunderstood aspect of it: interest rate differentials. 

Because Australia's cash rate currently sits above the US, hedging US exposure earns a modest positive carry, but that relationship can just as easily work against you. 

He weighs the real trade-offs: the Aussie dollar is a "risk currency" that falls in a crisis, so staying unhedged can act as a shock absorber when markets tumble, while hedging makes more sense when the currency trades well below fair value.

He also covers a crucial and overlooked detail, the TOFA hedging election and its tax consequences, why bonds should almost always be hedged, and what the academic research says. 

The upshot: their default is unhedged for shares, favouring hedging only as the dollar approaches US60 cents.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19720855 Wed, 02 Sep 2026 05:00:00 +1000 1947 424 full false Q&A - Untangling a messy structure, cutting losses, and low-income investing Q&A - Untangling a messy structure, cutting losses, and low-income investing Three listeners wrestling with structure and second-guessing. "Marty," an Adelaide doctor who's become genuinely financially literate since engaging a planner two years ago, feels his arrangement is messier than it should be: managed funds underperforming at a 2.9% IRR, borrowed money in the trust, and a cash-flow plan he's no longer sure about.

 He asks whether to pause super contributions, rethink gearing inside the trust given a possible 30% distribution floor, and what broad direction to take back to his adviser (or a new one).

"Angela," transitioning to retirement in Sydney, faces a painful crossroads: her Upper North Shore home has fallen in value after a downsizing purchase, and a plan to shift half into a company has surfaced an unexpected landholder duty trap. Should she crystallise the loss now or hold long-term?

Finally, a low-income investor living entirely off investments worries the proposed 30% minimum tax on capital growth sits above their marginal rate, upending a strategy built on selling international share growth. What are the alternatives when yield-chasing ETFs rely on covered calls, and markets sit at all-time highs?

Structural nuance throughout, with the usual reminder these are general discussions, not personal advice.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Three listeners wrestling with structure and second-guessing. "Marty," an Adelaide doctor who's become genuinely financially literate since engaging a planner two years ago, feels his arrangement is messier than it should be: managed funds underperforming at a 2.9% IRR, borrowed money in the trust, and a cash-flow plan he's no longer sure about.

 He asks whether to pause super contributions, rethink gearing inside the trust given a possible 30% distribution floor, and what broad direction to take back to his adviser (or a new one).

"Angela," transitioning to retirement in Sydney, faces a painful crossroads: her Upper North Shore home has fallen in value after a downsizing purchase, and a plan to shift half into a company has surfaced an unexpected landholder duty trap. Should she crystallise the loss now or hold long-term?

Finally, a low-income investor living entirely off investments worries the proposed 30% minimum tax on capital growth sits above their marginal rate, upending a strategy built on selling international share growth. What are the alternatives when yield-chasing ETFs rely on covered calls, and markets sit at all-time highs?

Structural nuance throughout, with the usual reminder these are general discussions, not personal advice.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19720854 Tue, 01 Sep 2026 05:00:00 +1000 2095 full false Ep 423: Negative gearing deferred - heres how to manage the cash flow gap Ep 423: Negative gearing deferred - heres how to manage the cash flow gap Read Full Blog Here

Quarantining negative gearing doesn't just reduce a tax benefit; it can blow a hole in an investor's cash flow. Take a property with a $30,000 annual shortfall: previously, offsetting that loss might have clawed back $12,000–$14,000 in tax, bringing the real cost to around $16,000–$18,000. Now that loss must be carried forward, potentially for 10 to 20 years, leaving the investor to fund the full $30,000 upfront. For many, that makes established property simply unaffordable.

In this episode, Stuart explores a financing structure to bridge that gap, borrowing the negative gearing benefit you no longer receive upfront, and repaying it when the deferred deduction is eventually realised. The goal is to align your cash outlay with the timing of the tax benefit, rather than paying years ahead of it. Crucially, it also frees investors to focus on asset quality rather than chasing yield in inferior locations.

He's characteristically balanced: this isn't a case for property over shares (which remain more effective), the numbers involve real trade-offs (a higher return but roughly 15% less wealth in dollar terms), and it demands equity, discipline and the right temperament. Get personalised tax and credit advice before acting.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

Quarantining negative gearing doesn't just reduce a tax benefit; it can blow a hole in an investor's cash flow. Take a property with a $30,000 annual shortfall: previously, offsetting that loss might have clawed back $12,000–$14,000 in tax, bringing the real cost to around $16,000–$18,000. Now that loss must be carried forward, potentially for 10 to 20 years, leaving the investor to fund the full $30,000 upfront. For many, that makes established property simply unaffordable.

In this episode, Stuart explores a financing structure to bridge that gap, borrowing the negative gearing benefit you no longer receive upfront, and repaying it when the deferred deduction is eventually realised. The goal is to align your cash outlay with the timing of the tax benefit, rather than paying years ahead of it. Crucially, it also frees investors to focus on asset quality rather than chasing yield in inferior locations.

He's characteristically balanced: this isn't a case for property over shares (which remain more effective), the numbers involve real trade-offs (a higher return but roughly 15% less wealth in dollar terms), and it demands equity, discipline and the right temperament. Get personalised tax and credit advice before acting.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19680010 Wed, 26 Aug 2026 05:00:00 +1000 1743 423 full false Q&A - Super recontributions, property versus ETFs, and the grandfathering question Q&A - Super recontributions, property versus ETFs, and the grandfathering question Four listeners bring sharp, forward-looking questions. "Tony" wonders whether super recontribution strategies, used to cut the taxable component and reduce death benefit tax, could be the next target for a budgetary hatchet, and asks for Stuart's view without giving the government any ideas.

An anonymous listener, 37, mortgage-free on a rural Victorian property with $300k in cash, feels he's at a genuine crossroads: use a buyer's agent to acquire an inner-Melbourne house and hold, or aggressively invest into ETFs and super toward a $120k perpetual income? Stuart weighs the two paths. Tom, 36, with seven properties and a fast-growing portfolio, asks whether to keep buying with his available equity, whether his ETF choices stack up, whether to sell some property to build shares, and whether to diversify his property-only SMSF into something like VGS.

Finally, Alf poses an intriguing technical question: can you recycle equity from a grandfathered, pre-Budget investment property to buy new assets, and still negatively gear the newly drawn interest, since the underlying property isn't subject to the new rules?

Practical thinking on structure and sequencing throughout, with the usual reminder these are general discussions, not personal advice.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Four listeners bring sharp, forward-looking questions. "Tony" wonders whether super recontribution strategies, used to cut the taxable component and reduce death benefit tax, could be the next target for a budgetary hatchet, and asks for Stuart's view without giving the government any ideas.

An anonymous listener, 37, mortgage-free on a rural Victorian property with $300k in cash, feels he's at a genuine crossroads: use a buyer's agent to acquire an inner-Melbourne house and hold, or aggressively invest into ETFs and super toward a $120k perpetual income? Stuart weighs the two paths. Tom, 36, with seven properties and a fast-growing portfolio, asks whether to keep buying with his available equity, whether his ETF choices stack up, whether to sell some property to build shares, and whether to diversify his property-only SMSF into something like VGS.

Finally, Alf poses an intriguing technical question: can you recycle equity from a grandfathered, pre-Budget investment property to buy new assets, and still negatively gear the newly drawn interest, since the underlying property isn't subject to the new rules?

Practical thinking on structure and sequencing throughout, with the usual reminder these are general discussions, not personal advice.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19680014 Tue, 25 Aug 2026 05:00:00 +1000 2207 full false Ep 422: Blame the 20-year growth cycle, not necessarily the Victorian government Ep 422: Blame the 20-year growth cycle, not necessarily the Victorian government Read Full Blog Here

Melbourne has tested investors' patience like nowhere else. Its median house price has grown just 1.8% a year since early 2017, below inflation, meaning that, in real terms, property is cheaper today than it was almost a decade ago. Naturally, investors want someone to blame. But in this episode, Stuart argues the usual suspects are largely wrong.

Victoria's land tax regime, tenancy reforms and ballooning state debt get cited endlessly, and Stuart doesn't dismiss them. Still, he shows why the links to prices are weaker than they appear (in one case, buying another Brisbane property triggered a higher land tax bill than going to Melbourne). 

The real driver, he contends, is what came before: an almost uninterrupted 20-year boom from 1997 to 2016, unmatched by any capital city in 45 years of data. The longer the boom, the longer the correction needed to work off the gap.

Using a declining long-run growth benchmark, Stuart's analysis puts Melbourne houses around 21% below trend and apartments 29%, the clear outlier while Brisbane, Adelaide and Perth run well ahead. With replacement costs now exceeding market values, he makes the case Melbourne may be intrinsically undervalued, and explains how to think about whether to hold or sell.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

Melbourne has tested investors' patience like nowhere else. Its median house price has grown just 1.8% a year since early 2017, below inflation, meaning that, in real terms, property is cheaper today than it was almost a decade ago. Naturally, investors want someone to blame. But in this episode, Stuart argues the usual suspects are largely wrong.

Victoria's land tax regime, tenancy reforms and ballooning state debt get cited endlessly, and Stuart doesn't dismiss them. Still, he shows why the links to prices are weaker than they appear (in one case, buying another Brisbane property triggered a higher land tax bill than going to Melbourne). 

The real driver, he contends, is what came before: an almost uninterrupted 20-year boom from 1997 to 2016, unmatched by any capital city in 45 years of data. The longer the boom, the longer the correction needed to work off the gap.

Using a declining long-run growth benchmark, Stuart's analysis puts Melbourne houses around 21% below trend and apartments 29%, the clear outlier while Brisbane, Adelaide and Perth run well ahead. With replacement costs now exceeding market values, he makes the case Melbourne may be intrinsically undervalued, and explains how to think about whether to hold or sell.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19642011 Wed, 19 Aug 2026 05:00:00 +1000 1813 422 full false Q&A- Structures, debt recycling, and accessing super Q&A- Structures, debt recycling, and accessing super Six listeners grapple with how the new tax landscape reshapes their thinking. Nick, six years into regular ETF investing, asks whether to keep his current setup or start fresh for cleaner record-keeping, and whether a trust is now worth considering mid-journey. Matthew and Michael both probe the fine print: does the "property in a company" strategy become more attractive under a 30% minimum CGT rate, and does debt recycling for an IP deposit still preserve deductible interest?

Michelle explores buying a one-bedroom apartment as tenants in common with her 25-year-old daughter, using gifted shares as a deposit, plus whether capital gains can be directed into super. Danny lays out an ambitious Canberra-based portfolio and asks the big question: can he realistically achieve a $2.5M Perth home and a $200k perpetual retirement income within ten years without dismantling what he's built?

Finally, Daniel wants the rules around accessing super at 60 while continuing to work, what "retirement" actually requires, how brief a pause counts, whether a younger working spouse matters, and where transition-to-retirement fits.

Structural nuance throughout, with the usual reminder these are general discussions, not personal advice.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Six listeners grapple with how the new tax landscape reshapes their thinking. Nick, six years into regular ETF investing, asks whether to keep his current setup or start fresh for cleaner record-keeping, and whether a trust is now worth considering mid-journey. Matthew and Michael both probe the fine print: does the "property in a company" strategy become more attractive under a 30% minimum CGT rate, and does debt recycling for an IP deposit still preserve deductible interest?

Michelle explores buying a one-bedroom apartment as tenants in common with her 25-year-old daughter, using gifted shares as a deposit, plus whether capital gains can be directed into super. Danny lays out an ambitious Canberra-based portfolio and asks the big question: can he realistically achieve a $2.5M Perth home and a $200k perpetual retirement income within ten years without dismantling what he's built?

Finally, Daniel wants the rules around accessing super at 60 while continuing to work, what "retirement" actually requires, how brief a pause counts, whether a younger working spouse matters, and where transition-to-retirement fits.

Structural nuance throughout, with the usual reminder these are general discussions, not personal advice.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19642001 Tue, 18 Aug 2026 05:00:00 +1000 2287 full false Ep 421: Liquidity: what it really buys you Ep 421: Liquidity: what it really buys you Read Full Blog Here

It's been fascinating to watch how differently asset classes have performed lately, share markets delivering strong double-digit returns while unlisted commercial property trusts and residential property in Melbourne and Sydney have struggled.

But this episode isn't about which asset class wins. It's about something quietly more important: liquidity, and the optionality it buys you.

Liquidity is how quickly and cheaply you can turn an asset into cash without disruption, and crucially, it's not about whether you expect to need cash, but whether you can access it if your circumstances, your view, or the risks change. 

Campbell makes the balanced case for both sides. Liquid, listed assets let you invest gradually, rebalance with new capital, manage concentration, and control your tax timing, but they also make it dangerously easy to act on emotion. 

Illiquid assets can protect you from your own worst instincts and give you control over the asset itself, but you don't really know what they're worth until you sell, and "liquid" unlisted funds can freeze redemptions exactly when it matters.

The real insight? The right level of liquidity shifts across your lifetime, and knowing when illiquidity stops working for you is the key.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

It's been fascinating to watch how differently asset classes have performed lately, share markets delivering strong double-digit returns while unlisted commercial property trusts and residential property in Melbourne and Sydney have struggled.

But this episode isn't about which asset class wins. It's about something quietly more important: liquidity, and the optionality it buys you.

Liquidity is how quickly and cheaply you can turn an asset into cash without disruption, and crucially, it's not about whether you expect to need cash, but whether you can access it if your circumstances, your view, or the risks change. 

Campbell makes the balanced case for both sides. Liquid, listed assets let you invest gradually, rebalance with new capital, manage concentration, and control your tax timing, but they also make it dangerously easy to act on emotion. 

Illiquid assets can protect you from your own worst instincts and give you control over the asset itself, but you don't really know what they're worth until you sell, and "liquid" unlisted funds can freeze redemptions exactly when it matters.

The real insight? The right level of liquidity shifts across your lifetime, and knowing when illiquidity stops working for you is the key.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19620802 Wed, 12 Aug 2026 05:00:00 +1000 1675 421 full false Q&A: Company land tax, debt recycling, and building versus selling Q&A: Company land tax, debt recycling, and building versus selling Six listeners bring some genuinely meaty questions. Sandy digs into the technical weeds of owning property through a company—whether a discretionary trust as sole shareholder forfeits the NSW land tax threshold, and how the 25% versus 30% company tax rate applies when a capital gain lands. Prashant asks for a candid critique of his simple, four-ETF debt recycling portfolio and its cash-flow reality.

Mark poses a clever SMSF puzzle: is deliberately exceeding the concessional cap effectively an interest-free loan from the ATO—and what's he missing? Shiva wants Stuart's read on whether the CGT changes will choke listings, push prices up, and collide with reduced borrowing capacity.

Then two relatable crossroads. "Nick" in Hobart weighs a granny flat build that won't add net capital value—asking what else should inform the decision, and whether to simply wait for child support obligations to taper. And Justin, 32, having pivoted from high-income mining to community services, faces a construction crunch: sell the investment property he believes in, or stretch to refinance and keep it?

Structural nuance and real-life trade-offs throughout—with the usual reminder that these are general discussions, not personal advice.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Six listeners bring some genuinely meaty questions. Sandy digs into the technical weeds of owning property through a company—whether a discretionary trust as sole shareholder forfeits the NSW land tax threshold, and how the 25% versus 30% company tax rate applies when a capital gain lands. Prashant asks for a candid critique of his simple, four-ETF debt recycling portfolio and its cash-flow reality.

Mark poses a clever SMSF puzzle: is deliberately exceeding the concessional cap effectively an interest-free loan from the ATO—and what's he missing? Shiva wants Stuart's read on whether the CGT changes will choke listings, push prices up, and collide with reduced borrowing capacity.

Then two relatable crossroads. "Nick" in Hobart weighs a granny flat build that won't add net capital value—asking what else should inform the decision, and whether to simply wait for child support obligations to taper. And Justin, 32, having pivoted from high-income mining to community services, faces a construction crunch: sell the investment property he believes in, or stretch to refinance and keep it?

Structural nuance and real-life trade-offs throughout—with the usual reminder that these are general discussions, not personal advice.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19620786 Tue, 11 Aug 2026 05:00:00 +1000 2227 full false Eight Rules Revisited #8- The four risks that can derail a plan Eight Rules Revisited #8- The four risks that can derail a plan Eight Rules Revisited is a companion series to Stuart Wemyss's updated book, Wealth by Design, working through each of the original eight golden rules from his 2018 book, Investopoly, one episode at a time. In each episode, Stuart tests his 2018 thinking against eight more years of evidence and client experience, and is upfront about what has changed, what has simply sharpened, and what has held firm all along. 

In this final episode of the series, Stuart takes on risk management, the rule underneath all the others, because a strategy that ignores the other seven rules can still survive a bad year, but a strategy with no defence against a foreseeable setback usually cannot. He starts by revisiting what Investopoly actually said in 2018: a four-step process of avoiding, insuring, adjusting or accepting risk, built mostly around personal insurance, income protection, life, total and permanent disability and trauma cover, plus practical detail on cost, quality and how much cover is enough. 

He then walks through what has genuinely changed in Wealth by Design, and it's more than a rewording. The insurance-led checklist has been replaced with a structured process that starts by naming the handful of assumptions any plan actually depends on, then sorts everything that can go wrong into four categories: liquidity risk, leverage risk, regulatory and rule-change risk, and behavioural risk. Stuart explains why each category earned its place, including why refinancing and borrowing capacity deserve far more scrutiny than they got in 2018, why regulatory change has become a risk in its own right after nearly a decade of shifting lending rules and tax settings, and why behavioural failure, panic, mistimed decisions, one partner shouldering everything alone, now gets treated as seriously as any product risk. He's candid about where insurance still matters and where its role in the plan has shifted, including one specific change in priority order between total and permanent disability cover and life insurance. 

The episode closes with a practical, twenty-minute stress test listeners can run on their own plan this week, four direct questions covering income, interest rates, insurance and household knowledge, designed to surface what would actually break first if life didn't cooperate. 

As the last instalment in the series, this episode also closes the loop on all eight rules, a short, honest look at which parts of Stuart's thinking held, which sharpened, and which genuinely changed shape between the two books. Wealth by Design is available now, wherever books are sold. 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Eight Rules Revisited is a companion series to Stuart Wemyss's updated book, Wealth by Design, working through each of the original eight golden rules from his 2018 book, Investopoly, one episode at a time. In each episode, Stuart tests his 2018 thinking against eight more years of evidence and client experience, and is upfront about what has changed, what has simply sharpened, and what has held firm all along. 

In this final episode of the series, Stuart takes on risk management, the rule underneath all the others, because a strategy that ignores the other seven rules can still survive a bad year, but a strategy with no defence against a foreseeable setback usually cannot. He starts by revisiting what Investopoly actually said in 2018: a four-step process of avoiding, insuring, adjusting or accepting risk, built mostly around personal insurance, income protection, life, total and permanent disability and trauma cover, plus practical detail on cost, quality and how much cover is enough. 

He then walks through what has genuinely changed in Wealth by Design, and it's more than a rewording. The insurance-led checklist has been replaced with a structured process that starts by naming the handful of assumptions any plan actually depends on, then sorts everything that can go wrong into four categories: liquidity risk, leverage risk, regulatory and rule-change risk, and behavioural risk. Stuart explains why each category earned its place, including why refinancing and borrowing capacity deserve far more scrutiny than they got in 2018, why regulatory change has become a risk in its own right after nearly a decade of shifting lending rules and tax settings, and why behavioural failure, panic, mistimed decisions, one partner shouldering everything alone, now gets treated as seriously as any product risk. He's candid about where insurance still matters and where its role in the plan has shifted, including one specific change in priority order between total and permanent disability cover and life insurance. 

The episode closes with a practical, twenty-minute stress test listeners can run on their own plan this week, four direct questions covering income, interest rates, insurance and household knowledge, designed to surface what would actually break first if life didn't cooperate. 

As the last instalment in the series, this episode also closes the loop on all eight rules, a short, honest look at which parts of Stuart's thinking held, which sharpened, and which genuinely changed shape between the two books. Wealth by Design is available now, wherever books are sold. 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19586892 Thu, 06 Aug 2026 05:00:00 +1000 1282 8 full false Ep 420: Can anything make property investing attractive again after the tax changes Ep 420: Can anything make property investing attractive again after the tax changes Read Full Blog Here

With the negative gearing and CGT changes now law, the property industry is racing to devise workarounds to keep investor interest alive. As a genuinely independent, asset-class-agnostic firm with no bias toward property, Stuart puts six of the most likely strategies under the microscope, because to a man with a hammer, everything looks like a nail.

The starting point: under the new rules, the after-tax internal rate of return on established property falls from around 11% to 8.4%. Can any lever claw that back? Stuart works through chasing a higher rental yield (and why starting gross yield is what matters), gearing less to reach neutral (which, counterintuitively, drags returns lower), and using a company structure to preserve deductions (a Part IVA minefield). He examines new-build dwellings that retain the old concessions, small-scale development, and high-yield specialised property like NDIS and co-living.

His verdict is refreshingly blunt: none of these currently stack up, and commercial property looks overpriced too. The real lesson? When someone promotes a clever workaround, check whether they have a vested interest, and remember property was never the only game in town.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

With the negative gearing and CGT changes now law, the property industry is racing to devise workarounds to keep investor interest alive. As a genuinely independent, asset-class-agnostic firm with no bias toward property, Stuart puts six of the most likely strategies under the microscope, because to a man with a hammer, everything looks like a nail.

The starting point: under the new rules, the after-tax internal rate of return on established property falls from around 11% to 8.4%. Can any lever claw that back? Stuart works through chasing a higher rental yield (and why starting gross yield is what matters), gearing less to reach neutral (which, counterintuitively, drags returns lower), and using a company structure to preserve deductions (a Part IVA minefield). He examines new-build dwellings that retain the old concessions, small-scale development, and high-yield specialised property like NDIS and co-living.

His verdict is refreshingly blunt: none of these currently stack up, and commercial property looks overpriced too. The real lesson? When someone promotes a clever workaround, check whether they have a vested interest, and remember property was never the only game in town.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19586888 Wed, 05 Aug 2026 05:00:00 +1000 2004 420 full false Q&A: Deploying $800k, structuring for the future, and what to spend on a car Q&A: Deploying $800k, structuring for the future, and what to spend on a car Four listeners at pivotal moments. "John," 55 and five years cancer-free, has $800k from selling an investment property and a detailed plan for a downsizer contribution, an experiences fund, helping both daughters into homes and one big question: will his super comfortably fund $100k a year in retirement? Stuart stress-tests the numbers and the strategy.

"Chris," 44, lays out a layered plan involving an SMSF property, an investment property and a granny flat, and asks whether it's solid or whether he should be more aggressive now. "Brenton," a high-income earner still driving two ten-year-old Toyotas, poses a refreshingly human dilemma: what financial principles should guide spending on a depreciating-but-essential asset like a car—and how much splurging is genuinely defensible after years of sacrifice?

Finally, "Bob," 38 with strong surplus cash flow, asks three sharp questions many listeners share: should new assets go into his name, his wife's, or a family trust given their income gap? Hold or sell an interstate Queensland property after a strong run? And at his age, gear into undervalued Melbourne property, debt-recycle into ETFs, or simply kill the mortgage first?

Practical, numbers-driven answers throughout.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Four listeners at pivotal moments. "John," 55 and five years cancer-free, has $800k from selling an investment property and a detailed plan for a downsizer contribution, an experiences fund, helping both daughters into homes and one big question: will his super comfortably fund $100k a year in retirement? Stuart stress-tests the numbers and the strategy.

"Chris," 44, lays out a layered plan involving an SMSF property, an investment property and a granny flat, and asks whether it's solid or whether he should be more aggressive now. "Brenton," a high-income earner still driving two ten-year-old Toyotas, poses a refreshingly human dilemma: what financial principles should guide spending on a depreciating-but-essential asset like a car—and how much splurging is genuinely defensible after years of sacrifice?

Finally, "Bob," 38 with strong surplus cash flow, asks three sharp questions many listeners share: should new assets go into his name, his wife's, or a family trust given their income gap? Hold or sell an interstate Queensland property after a strong run? And at his age, gear into undervalued Melbourne property, debt-recycle into ETFs, or simply kill the mortgage first?

Practical, numbers-driven answers throughout.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19586884 Tue, 04 Aug 2026 05:00:00 +1000 2178 full false Eight Rules Revisited #7- Own property that everyone will always want Eight Rules Revisited #7- Own property that everyone will always want Rule 7 in Investopoly was direct: only invest in investment-grade property. Eight years on, the core of that still holds, but Stuart has sharpened the method and genuinely changed his mind about one part of it.

In this episode, he explains why Wealth by Design reframes the rule from "invest in investment-grade property" to something more demanding: own property with enduring, scarce and growing demand. It's a shift from a label to a test—what makes an asset something people will always want, and keep wanting, decades from now.

Stuart is candid about the one 2018 position he's since reversed: the old line that it's "never a bad time to buy." He now believes price and cycle matter more than he once allowed, and explains why. He introduces the idea of buying for the future buyer rather than today's, choosing property whose appeal will still be scarce and sought-after when you eventually sell.

He closes with a simple forced-hold test you can run on any property this week, a quick way to pressure-test whether what you own or are about to buy truly has demand that endures.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Rule 7 in Investopoly was direct: only invest in investment-grade property. Eight years on, the core of that still holds, but Stuart has sharpened the method and genuinely changed his mind about one part of it.

In this episode, he explains why Wealth by Design reframes the rule from "invest in investment-grade property" to something more demanding: own property with enduring, scarce and growing demand. It's a shift from a label to a test—what makes an asset something people will always want, and keep wanting, decades from now.

Stuart is candid about the one 2018 position he's since reversed: the old line that it's "never a bad time to buy." He now believes price and cycle matter more than he once allowed, and explains why. He introduces the idea of buying for the future buyer rather than today's, choosing property whose appeal will still be scarce and sought-after when you eventually sell.

He closes with a simple forced-hold test you can run on any property this week, a quick way to pressure-test whether what you own or are about to buy truly has demand that endures.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19551770 Thu, 30 Jul 2026 05:00:00 +1000 1136 7 full false Ep 419: The best super fund for 2026? You’re asking the wrong question Ep 419: The best super fund for 2026? You’re asking the wrong question You can download the full report, including the four decision flowcharts and annual review checklist, here: https://prosolution.com.au/best-super-fund-australia/

Most people choose a super fund by looking at which fund produced the highest return last year. But that is the wrong question.

The better question is: which investment strategy and super structure is most likely to deliver the best after-fee, after-tax outcome over the next 20 to 40 years, given your circumstances?

In this episode, I explain why choosing the best super fund involves two separate decisions: how your money is invested and which structure holds those investments. I compare pooled funds, Member Direct options, wrap platforms and SMSFs, and explain how to assess each using four key factors: transparency, tax effectiveness, cost, and flexibility and control.

I also discuss why “Balanced” investment options can be misleading, the risks of excessive exposure to Australian shares and unlisted assets, when greater control may be worthwhile, and the insurance mistake you must avoid before changing funds.

Finally, I explain why this should be an annual review rather than a one-off decision. As your balance, investment horizon, fees and insurance needs change, the best structure for you may change too.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> You can download the full report, including the four decision flowcharts and annual review checklist, here: https://prosolution.com.au/best-super-fund-australia/

Most people choose a super fund by looking at which fund produced the highest return last year. But that is the wrong question.

The better question is: which investment strategy and super structure is most likely to deliver the best after-fee, after-tax outcome over the next 20 to 40 years, given your circumstances?

In this episode, I explain why choosing the best super fund involves two separate decisions: how your money is invested and which structure holds those investments. I compare pooled funds, Member Direct options, wrap platforms and SMSFs, and explain how to assess each using four key factors: transparency, tax effectiveness, cost, and flexibility and control.

I also discuss why “Balanced” investment options can be misleading, the risks of excessive exposure to Australian shares and unlisted assets, when greater control may be worthwhile, and the insurance mistake you must avoid before changing funds.

Finally, I explain why this should be an annual review rather than a one-off decision. As your balance, investment horizon, fees and insurance needs change, the best structure for you may change too.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19551766 Wed, 29 Jul 2026 05:00:00 +1000 1753 419 full false Q&A - Property at 49, timing the cycle, and investing through an AI downturn Q&A - Property at 49, timing the cycle, and investing through an AI downturn Three thoughtful listeners, each already doing a lot right and looking for the sharpest next move. A 49-year-old single police officer, no mortgage, $810k in super, a growing ETF portfolio, asks the perennial question: buy an investment property, keep doing what's working, or borrow to invest further in shares? Stuart weighs the options against her plan to retire at 57.

Slav returns with two connected questions. Having ridden the "rising tide" to 40%+ gains on regional Queensland properties and leveraged into a Melbourne outer suburb, he wants to know how you actually track a changing cycle to decide when to sell and reinvest in stronger locations. His second is timely and unsettling: with AI disrupting white-collar work, how sustainable is a 70–80% LVR portfolio if both incomes disappeared for an extended stretch?

Finally, "Celeste," 44 and mortgage-free in Kingscliff, feels stuck in analysis paralysis. Is it too late to buy property, or should surplus keep flowing into ETFs and super? She also asks how to structure children's investment bonds, and whether to draw on ETF income or shift assets into super in retirement.

Grounded, practical answers for real crossroads.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Three thoughtful listeners, each already doing a lot right and looking for the sharpest next move. A 49-year-old single police officer, no mortgage, $810k in super, a growing ETF portfolio, asks the perennial question: buy an investment property, keep doing what's working, or borrow to invest further in shares? Stuart weighs the options against her plan to retire at 57.

Slav returns with two connected questions. Having ridden the "rising tide" to 40%+ gains on regional Queensland properties and leveraged into a Melbourne outer suburb, he wants to know how you actually track a changing cycle to decide when to sell and reinvest in stronger locations. His second is timely and unsettling: with AI disrupting white-collar work, how sustainable is a 70–80% LVR portfolio if both incomes disappeared for an extended stretch?

Finally, "Celeste," 44 and mortgage-free in Kingscliff, feels stuck in analysis paralysis. Is it too late to buy property, or should surplus keep flowing into ETFs and super? She also asks how to structure children's investment bonds, and whether to draw on ETF income or shift assets into super in retirement.

Grounded, practical answers for real crossroads.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19551751 Tue, 28 Jul 2026 05:00:00 +1000 1977 full false Eight Rules Revisited #6- The ETF boom broke my rule, do I tightened it Eight Rules Revisited #6- The ETF boom broke my rule, do I tightened it Pre-order Wealth by Design Here

Golden Rule 6 was simple: invest in the share market using low-cost index funds. Eight years on, that argument has been comprehensively won, arguably too well. Stuart charts the scale of the shift: the ASX ETF market has ballooned from 133 funds to more than 450, and from $36 billion to over $350 billion. Indexing went from contrarian to consensus.

But that very boom created new traps. When everything gets rebranded as an "ETF," the label stops telling you much about what you're actually buying. In Wealth by Design, Stuart tightens the rule from "index funds" to evidence-based investing, a sharper standard for a crowded market.

He explains why not every product wearing the ETF badge deserves your money, and how to interrogate the index sitting underneath a fund before you buy it, since the benchmark quietly determines your returns. He's also candid about two positions he has genuinely reversed since 2018, updating his thinking as the evidence moved.

The episode closes with the five filters every fund in your portfolio should pass, giving you a practical checklist to separate genuinely sound investments from cleverly marketed ones.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Pre-order Wealth by Design Here

Golden Rule 6 was simple: invest in the share market using low-cost index funds. Eight years on, that argument has been comprehensively won, arguably too well. Stuart charts the scale of the shift: the ASX ETF market has ballooned from 133 funds to more than 450, and from $36 billion to over $350 billion. Indexing went from contrarian to consensus.

But that very boom created new traps. When everything gets rebranded as an "ETF," the label stops telling you much about what you're actually buying. In Wealth by Design, Stuart tightens the rule from "index funds" to evidence-based investing, a sharper standard for a crowded market.

He explains why not every product wearing the ETF badge deserves your money, and how to interrogate the index sitting underneath a fund before you buy it, since the benchmark quietly determines your returns. He's also candid about two positions he has genuinely reversed since 2018, updating his thinking as the evidence moved.

The episode closes with the five filters every fund in your portfolio should pass, giving you a practical checklist to separate genuinely sound investments from cleverly marketed ones.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19507976 Thu, 23 Jul 2026 05:00:00 +1000 1101 6 full false Ep 418: Why discipline was never going to fix your cash flow Ep 418: Why discipline was never going to fix your cash flow Read Full Blog Here

Pre-order Wealth by Design Here

You can't build wealth unless you spend less than you earn and invest the difference, which makes cash flow the most fundamental discipline of all. The trouble was always effort. For years, Stuart's method was to hand-categorise three months of transactions a deliberate compromise, since analysing two or three years by hand was simply unrealistic. But three months is a snapshot, not a picture: it misses the annual rhythm of holidays, school fees and insurance renewals, and it can't reveal a trend.

In this episode, Stuart explains how AI has quietly removed that barrier. Using a tool like Claude to categorise transactions turns hours of tedium into minutes, so you can finally see the real shape of your spending, consistency, and the slow "drift" of lifestyle inflation that hides over a single quarter. He shares how his prompt works, plus two things AI still can't do for you, and the privacy step to take before uploading a single line of data.

But knowing your number is only half the job. Insight without structure rarely changes behaviour, so Stuart lays out the three automation principles pay yourself first, isolate discretionary spending, hide your savings, that make good decisions the default and willpower irrelevant.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

Pre-order Wealth by Design Here

You can't build wealth unless you spend less than you earn and invest the difference, which makes cash flow the most fundamental discipline of all. The trouble was always effort. For years, Stuart's method was to hand-categorise three months of transactions a deliberate compromise, since analysing two or three years by hand was simply unrealistic. But three months is a snapshot, not a picture: it misses the annual rhythm of holidays, school fees and insurance renewals, and it can't reveal a trend.

In this episode, Stuart explains how AI has quietly removed that barrier. Using a tool like Claude to categorise transactions turns hours of tedium into minutes, so you can finally see the real shape of your spending, consistency, and the slow "drift" of lifestyle inflation that hides over a single quarter. He shares how his prompt works, plus two things AI still can't do for you, and the privacy step to take before uploading a single line of data.

But knowing your number is only half the job. Insight without structure rarely changes behaviour, so Stuart lays out the three automation principles pay yourself first, isolate discretionary spending, hide your savings, that make good decisions the default and willpower irrelevant.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19507970 Wed, 22 Jul 2026 05:00:00 +1000 1797 418 full false Q&A - Property crossroads, gearing decisions and modelling for inflation Q&A - Property crossroads, gearing decisions and modelling for inflation Pre-order Wealth by Design Here

Five listeners at very different life stages, each wrestling with where to direct capital next. Perth couple "Amelia and Ivan," with two investment properties and a baby on the way, weigh three distinct strategies: hold and sell later to fund a renovation, swap a townhouse for a better-taxed property, or add a third and keep them all. Stuart works through the trade-offs and what a year or two off work really means for the plan.

A 26-year-old in Sydney real estate asks how to play the long game: buy a first home to live in and later upsize, or turn it into a rental? A 40-year-old in Ocean Reef with a healthy offset balance wonders whether an investment property makes sense now, whether to deploy cash or super first, and whether a trust is premature. And "Gus, the country copper," living rent-free with strong super, debates whether to keep funnelling surplus into shares via his trust or gear into another property purely for leverage.

Plus a genuinely useful technical question on inflation: how to treat it in wealth modelling, and whether to convert future assets back into today's dollars to track real progress.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Pre-order Wealth by Design Here

Five listeners at very different life stages, each wrestling with where to direct capital next. Perth couple "Amelia and Ivan," with two investment properties and a baby on the way, weigh three distinct strategies: hold and sell later to fund a renovation, swap a townhouse for a better-taxed property, or add a third and keep them all. Stuart works through the trade-offs and what a year or two off work really means for the plan.

A 26-year-old in Sydney real estate asks how to play the long game: buy a first home to live in and later upsize, or turn it into a rental? A 40-year-old in Ocean Reef with a healthy offset balance wonders whether an investment property makes sense now, whether to deploy cash or super first, and whether a trust is premature. And "Gus, the country copper," living rent-free with strong super, debates whether to keep funnelling surplus into shares via his trust or gear into another property purely for leverage.

Plus a genuinely useful technical question on inflation: how to treat it in wealth modelling, and whether to convert future assets back into today's dollars to track real progress.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19507964 Tue, 21 Jul 2026 05:00:00 +1000 2156 full false Eight Rules Revisited #5: The rule i got half wrong Eight Rules Revisited #5: The rule i got half wrong Pre-order Wealth by Design Here

This one is different. Of all the rules in the series, Rule 5 is the first where Stuart admits he has genuinely changed his mind, not refined a nuance, but rethought the core idea.

In Investopoly, he taught the textbook approach: blend negatively correlated assets to smooth out portfolio volatility, the classic diversification playbook most investors are told to follow. Eight years and a lot of evidence later, Wealth by Design makes a different case. The real risk controls, he now argues, aren't clever correlations at all—they're quality and price. Own high-quality assets, avoid overpaying, and you've addressed risk at its source rather than papering over it with offsetting volatility.

He reframes the role of defensive assets too. Rather than acting as a permanent volatility damper that quietly drags on long-term returns, they work best as a targeted one-to-three-year spending buffer, enough to ride out a downturn without being forced to sell growth assets at the wrong time. And he explains why long-term returns are far more predictable from starting valuations than most investors appreciate.

An honest, evidence-driven episode about updating your thinking when the data demands it.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Pre-order Wealth by Design Here

This one is different. Of all the rules in the series, Rule 5 is the first where Stuart admits he has genuinely changed his mind, not refined a nuance, but rethought the core idea.

In Investopoly, he taught the textbook approach: blend negatively correlated assets to smooth out portfolio volatility, the classic diversification playbook most investors are told to follow. Eight years and a lot of evidence later, Wealth by Design makes a different case. The real risk controls, he now argues, aren't clever correlations at all—they're quality and price. Own high-quality assets, avoid overpaying, and you've addressed risk at its source rather than papering over it with offsetting volatility.

He reframes the role of defensive assets too. Rather than acting as a permanent volatility damper that quietly drags on long-term returns, they work best as a targeted one-to-three-year spending buffer, enough to ride out a downturn without being forced to sell growth assets at the wrong time. And he explains why long-term returns are far more predictable from starting valuations than most investors appreciate.

An honest, evidence-driven episode about updating your thinking when the data demands it.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19472632 Thu, 16 Jul 2026 05:00:00 +1000 1415 full false Ep 417: Upgrade your home or invest in shares? The numbers surprised me. Ep 417: Upgrade your home or invest in shares? The numbers surprised me. Read Full Blog Here

Pre-order Wealth by Design Here

For decades, negative gearing tipped the scales toward borrowing for an investment property over spending more on your home; investment interest was deductible, home loan interest wasn't. But with negative gearing quarantined and the effective capital gains tax rate climbing from around 20% to closer to 30–35% under the post-2027 indexation regime, that old comparison is dead. In this episode, Stuart rebuilds it from scratch.

The new contest: is a high-income household better off borrowing to upgrade the family home, or borrowing to invest in shares? He models two households starting identically, same income, same $1 million of extra debt, same 18-year repayment, and the result genuinely surprised him. Over 10 years, geared shares edge ahead; over 20, it's a dead heat; over 30, the bigger home wins. The reason is tax leakage: once the debt is repaid, the share portfolio's deductible interest shield vanishes while the home keeps compounding tax-free.

Stuart also walks through six things the model can't capture: liquidity, the willingness to downsize, home growth quality, lifestyle, and explains why, with these settings still politically contested, the smartest move may be to preserve optionality and reassess in 12 to 18 months.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

Pre-order Wealth by Design Here

For decades, negative gearing tipped the scales toward borrowing for an investment property over spending more on your home; investment interest was deductible, home loan interest wasn't. But with negative gearing quarantined and the effective capital gains tax rate climbing from around 20% to closer to 30–35% under the post-2027 indexation regime, that old comparison is dead. In this episode, Stuart rebuilds it from scratch.

The new contest: is a high-income household better off borrowing to upgrade the family home, or borrowing to invest in shares? He models two households starting identically, same income, same $1 million of extra debt, same 18-year repayment, and the result genuinely surprised him. Over 10 years, geared shares edge ahead; over 20, it's a dead heat; over 30, the bigger home wins. The reason is tax leakage: once the debt is repaid, the share portfolio's deductible interest shield vanishes while the home keeps compounding tax-free.

Stuart also walks through six things the model can't capture: liquidity, the willingness to downsize, home growth quality, lifestyle, and explains why, with these settings still politically contested, the smartest move may be to preserve optionality and reassess in 12 to 18 months.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19474235 Wed, 15 Jul 2026 05:00:00 +1000 1855 417 full false Q&A- Can I afford to retire, renovating vs investing, and planning solo Q&A- Can I afford to retire, renovating vs investing, and planning solo Pre-order Wealth by Design Here

Three richly detailed listener situations, three very different crossroads. First, Charles, 51, unemployed, four kids in private school, and a sprawling portfolio spanning a Singapore apartment, an SMSF, regional Queensland property, land parcels and a $500k crypto holding. His question is deceptively simple: in what order should he sell to fund a Melbourne home, and can he actually afford to retire? Stuart untangles the sequencing and confronts the concentration risk head-on.

Next, Matt and his wife in Lugarno, sitting on strong equity after a major renovation but facing single-income pressure with a young family and more children planned. Should they pour surplus into the mortgage, or recommence property investing to ultimately pay the home down faster? We weigh the options against cash flow reality.

Finally, an anonymous single mother of three, a medical professional on the Sunshine Coast, asks how solo parenting reshapes retirement planning. Should she sell underperforming shares into super, lift her contributions, rethink her growth allocation, or consider property despite constrained borrowing capacity?

Honest, numbers-first guidance for anyone wondering whether their strategy genuinely stacks up, and what to prioritise next.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Pre-order Wealth by Design Here

Three richly detailed listener situations, three very different crossroads. First, Charles, 51, unemployed, four kids in private school, and a sprawling portfolio spanning a Singapore apartment, an SMSF, regional Queensland property, land parcels and a $500k crypto holding. His question is deceptively simple: in what order should he sell to fund a Melbourne home, and can he actually afford to retire? Stuart untangles the sequencing and confronts the concentration risk head-on.

Next, Matt and his wife in Lugarno, sitting on strong equity after a major renovation but facing single-income pressure with a young family and more children planned. Should they pour surplus into the mortgage, or recommence property investing to ultimately pay the home down faster? We weigh the options against cash flow reality.

Finally, an anonymous single mother of three, a medical professional on the Sunshine Coast, asks how solo parenting reshapes retirement planning. Should she sell underperforming shares into super, lift her contributions, rethink her growth allocation, or consider property despite constrained borrowing capacity?

Honest, numbers-first guidance for anyone wondering whether their strategy genuinely stacks up, and what to prioritise next.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19472244 Tue, 14 Jul 2026 05:00:00 +1000 2177 full false Eight Rules Revisited #4: The perpetual portfolio- growing your wealth while you spend it Eight Rules Revisited #4: The perpetual portfolio- growing your wealth while you spend it Pre-order Wealth by Design Here

In this episode, Stuart revisits Golden Rule 4 and admits that half of it has changed. In Investopoly, the advice was to build your asset base, then tilt toward income as retirement approached. Wealth by Design confirms the first half but overturns the second. Here's why.

Stuart makes the case that the real objective isn't income at all; it's after-tax total return and liquidity. He explains why the conventional glide path into conservative, income-heavy assets as you near retirement can quietly backfire, amplifying two risks retirees underestimate: inflation eroding your purchasing power, and longevity outlasting your money. The instinct that feels "safe" may actually be the riskier choice over a multi-decade retirement.

The alternative is what he calls a perpetual portfolio: one structured to keep compounding even as it funds your lifestyle, so you're drawing an income without dismantling the engine that generates it. Stuart walks through the total-return decision filters he uses to judge whether an asset earns its place, and how to think about funding spending without reaching reflexively for yield.

He closes with one simple action you can take this week to start reframing your own strategy.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Pre-order Wealth by Design Here

In this episode, Stuart revisits Golden Rule 4 and admits that half of it has changed. In Investopoly, the advice was to build your asset base, then tilt toward income as retirement approached. Wealth by Design confirms the first half but overturns the second. Here's why.

Stuart makes the case that the real objective isn't income at all; it's after-tax total return and liquidity. He explains why the conventional glide path into conservative, income-heavy assets as you near retirement can quietly backfire, amplifying two risks retirees underestimate: inflation eroding your purchasing power, and longevity outlasting your money. The instinct that feels "safe" may actually be the riskier choice over a multi-decade retirement.

The alternative is what he calls a perpetual portfolio: one structured to keep compounding even as it funds your lifestyle, so you're drawing an income without dismantling the engine that generates it. Stuart walks through the total-return decision filters he uses to judge whether an asset earns its place, and how to think about funding spending without reaching reflexively for yield.

He closes with one simple action you can take this week to start reframing your own strategy.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19434558 Thu, 09 Jul 2026 05:00:00 +1000 1217 416 full false Ep 416: Is established residential property still worth investing in? Ep 416: Is established residential property still worth investing in? Read Full Blog Here

Pre-order Wealth by Design Here

With the government's changes to established residential property now looking likely to become law, the investment case has fundamentally shifted, and those who try to ignore it will be exposed. In this episode, we unpack why quarantining negative gearing losses hits investors so hard: the asset costs materially more to hold each year, yet capital growth potential hasn't budged. We walk through the numbers, showing how an investment-grade property's after-tax internal rate of return could fall from around 11% to just 8.4% a return you might match through superannuation, minus the debt, concentration risk and hassle.

We also explore "livevesting", channelling your capacity into a better-quality home that compounds tax-free, and explain why Melbourne may now offer compelling relative value. Along the way, we sound a warning on the "obvious alternatives": commercial property and new-build packages that are often overpriced, structurally inferior, or both.

Finally, drawing on the 1980s Hawke-Keating reversal and New Zealand's recent backflip, we ask whether these changes will even last—and why the smartest move now is preserving optionality rather than reacting. Tax matters, but a good investment must still stand on its own merits.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

Pre-order Wealth by Design Here

With the government's changes to established residential property now looking likely to become law, the investment case has fundamentally shifted, and those who try to ignore it will be exposed. In this episode, we unpack why quarantining negative gearing losses hits investors so hard: the asset costs materially more to hold each year, yet capital growth potential hasn't budged. We walk through the numbers, showing how an investment-grade property's after-tax internal rate of return could fall from around 11% to just 8.4% a return you might match through superannuation, minus the debt, concentration risk and hassle.

We also explore "livevesting", channelling your capacity into a better-quality home that compounds tax-free, and explain why Melbourne may now offer compelling relative value. Along the way, we sound a warning on the "obvious alternatives": commercial property and new-build packages that are often overpriced, structurally inferior, or both.

Finally, drawing on the 1980s Hawke-Keating reversal and New Zealand's recent backflip, we ask whether these changes will even last—and why the smartest move now is preserving optionality rather than reacting. Tax matters, but a good investment must still stand on its own merits.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19434556 Wed, 08 Jul 2026 05:00:00 +1000 1787 416 full false Q&A- Debt recycling, the six-year rule, and exiting your financial planner Q&A- Debt recycling, the six-year rule, and exiting your financial planner Pre-order Wealth by Design Here

In this mailbag episode, we tackle five listener questions spanning some of the trickiest decisions in personal finance. A Brisbane couple in their mid-forties, with strong super balances and a plan to knock down and rebuild, ask whether to ease off super contributions to kill debt faster or keep compounding inside the lower-tax environment and whether debt recycling is their smartest long-term play.

We unpack a thorny capital gains question on the six-year absence rule: can you settle a new home first, then sell the old one, without triggering a double-PPR problem? A high-income Melbourne couple wonder whether $6,800 a year in ongoing financial advice is still worth it, how to untangle from wrap platforms, and whether a coastal second property stacks up given their age and timeline.

A father in St Ives asks whether tipping $2,000 a year into a 20-year-old's super is a gift worth making. And a Perth listener eyeing his neighbour's block wants the unbiased truth on double blocks and subdivisions.

Practical, numbers-driven answers to real situations and the principles behind them.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Pre-order Wealth by Design Here

In this mailbag episode, we tackle five listener questions spanning some of the trickiest decisions in personal finance. A Brisbane couple in their mid-forties, with strong super balances and a plan to knock down and rebuild, ask whether to ease off super contributions to kill debt faster or keep compounding inside the lower-tax environment and whether debt recycling is their smartest long-term play.

We unpack a thorny capital gains question on the six-year absence rule: can you settle a new home first, then sell the old one, without triggering a double-PPR problem? A high-income Melbourne couple wonder whether $6,800 a year in ongoing financial advice is still worth it, how to untangle from wrap platforms, and whether a coastal second property stacks up given their age and timeline.

A father in St Ives asks whether tipping $2,000 a year into a 20-year-old's super is a gift worth making. And a Perth listener eyeing his neighbour's block wants the unbiased truth on double blocks and subdivisions.

Practical, numbers-driven answers to real situations and the principles behind them.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19434547 Tue, 07 Jul 2026 05:00:00 +1000 2054 full false Eight Rules Revisited #3: Build a savings engine that runs on autopilot Eight Rules Revisited #3: Build a savings engine that runs on autopilot Pre-order Wealth By Design Here

Episode three of Eight Rules Revisited continues the Thursday series comparing the eight golden rules from Investopoly with the updated versions in Wealth by Design, released 28 July.

Rule 3 — spend less than you earn and invest the difference- is one of the most straightforward principles in personal finance. It is also one of the most reliably ignored. The rule itself hasn't changed since Investopoly. What has changed is how Stuart frames the implementation, moving decisively away from tracking, measurement, and willpower toward an automated banking system that removes the need for daily discipline by making saving the structural default.

The episode examines the behavioural forces that work against consistent saving, the immediate pull of spending versus the distant reward of investing, the social normalisation of lifestyle upgrades, and the way income growth tends to fund consumption rather than wealth accumulation when there is no system in place to redirect it first.

Lifestyle creep receives particular attention. It is not a dramatic failure but a gradual one, the slow expansion of spending that keeps pace with rising income and quietly prevents wealth from compounding the way it should.

Stuart closes with a single practical action: one automatic transfer worth setting up this week that begins shifting savings from intention to habit. The full system and worked examples appear in chapter three of Wealth by Design.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Pre-order Wealth By Design Here

Episode three of Eight Rules Revisited continues the Thursday series comparing the eight golden rules from Investopoly with the updated versions in Wealth by Design, released 28 July.

Rule 3 — spend less than you earn and invest the difference- is one of the most straightforward principles in personal finance. It is also one of the most reliably ignored. The rule itself hasn't changed since Investopoly. What has changed is how Stuart frames the implementation, moving decisively away from tracking, measurement, and willpower toward an automated banking system that removes the need for daily discipline by making saving the structural default.

The episode examines the behavioural forces that work against consistent saving, the immediate pull of spending versus the distant reward of investing, the social normalisation of lifestyle upgrades, and the way income growth tends to fund consumption rather than wealth accumulation when there is no system in place to redirect it first.

Lifestyle creep receives particular attention. It is not a dramatic failure but a gradual one, the slow expansion of spending that keeps pace with rising income and quietly prevents wealth from compounding the way it should.

Stuart closes with a single practical action: one automatic transfer worth setting up this week that begins shifting savings from intention to habit. The full system and worked examples appear in chapter three of Wealth by Design.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19404378 Thu, 02 Jul 2026 05:00:00 +1000 1087 full false Ep 415: Tax grabs dressed up as housing policy: what investors need to know Ep 415: Tax grabs dressed up as housing policy: what investors need to know Read Full Blog Here

Pre-order Wealth By Design Here

Both Houses have passed the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026. Royal Assent is pending but considered a formality. For investors, property owners, business owners, and superannuation members, the changes are substantial, and the details matter enormously.

This blog provides a clear, technical breakdown of what the legislation actually does. Negative gearing losses on established residential property purchased after Budget night will be quarantined from 1 July 2027, with existing properties grandfathered under previous rules. The 50% CGT discount is replaced by cost base indexation and a new minimum 30% tax on capital gains, a change that, for long-term investors in assets growing at 7% per annum, lifts the effective tax rate from roughly 20–23% to around 30–35%. SMSFs lose the ability to borrow for residential property, with a commencement date of approximately mid-August 2026. Trust capital gains rules are also changing, though the legislation has not yet been released.

Stuart addresses the government's framing directly: the claim that these changes improve housing affordability is not supported by the Treasury's own modelling, nor by the historical record in Australia, New Zealand, or the United Kingdom. These are tax revenue measures.

The blog also covers the new $250 worker tax offset, the $1,000 instant work-related deduction, important transition rules for existing assets, and why low-income taxpayers with unrealised gains should consider crystallising them before 1 July 2027.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

Pre-order Wealth By Design Here

Both Houses have passed the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026. Royal Assent is pending but considered a formality. For investors, property owners, business owners, and superannuation members, the changes are substantial, and the details matter enormously.

This blog provides a clear, technical breakdown of what the legislation actually does. Negative gearing losses on established residential property purchased after Budget night will be quarantined from 1 July 2027, with existing properties grandfathered under previous rules. The 50% CGT discount is replaced by cost base indexation and a new minimum 30% tax on capital gains, a change that, for long-term investors in assets growing at 7% per annum, lifts the effective tax rate from roughly 20–23% to around 30–35%. SMSFs lose the ability to borrow for residential property, with a commencement date of approximately mid-August 2026. Trust capital gains rules are also changing, though the legislation has not yet been released.

Stuart addresses the government's framing directly: the claim that these changes improve housing affordability is not supported by the Treasury's own modelling, nor by the historical record in Australia, New Zealand, or the United Kingdom. These are tax revenue measures.

The blog also covers the new $250 worker tax offset, the $1,000 instant work-related deduction, important transition rules for existing assets, and why low-income taxpayers with unrealised gains should consider crystallising them before 1 July 2027.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-19412802 Wed, 01 Jul 2026 05:00:00 +1000 2180 415 full false Q&A: Inheritance, relationship uncertainty, and the property timing question Q&A: Inheritance, relationship uncertainty, and the property timing question Pre-order Wealth By Design Here

This episode brings together six listener questions that each involve a meaningful financial decision and, in several cases, significant personal uncertainty alongside significant financial capacity.

The first comes from a couple in their late thirties who received a substantial inheritance, now holding $3.6m in cash alongside a share portfolio and three properties. They have developed a dual-trust structure with a corporate beneficiary and are seeking a sense-check on whether the approach is sound and whether property still deserves a place in the plan.

The second involves a newly migrated retiree with no Australian income, substantial overseas cash, and five possible approaches to buying property, each with different stamp duty, CGT, and inheritance implications for her two adult daughters.

The third is a series of practical questions about transition to retirement arrangements, when they make sense, what super balance is needed for a modest 25-year retirement, and the tax implications of transferring an investment property to children.

The fourth comes from a 37-year-old in WA with a fully paid-off home, a first child arriving, and a strong savings rate, asking how to prioritise between investment property, shares, and super contributions from here.

The fifth involves a 35-year-old FIFO worker with $536k in savings and investments, strong borrowing capacity, and genuine uncertainty about whether to buy a Perth home alone, jointly with a partner, or through a leapfrog strategy given where the relationship currently sits.

The sixth is a 45-year-old couple with a $300k inheritance, a nearly paid-off Sydney home, three recently purchased investment properties, and a simple question: is paying off the home loan and topping up super really the best use of the windfall?

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Pre-order Wealth By Design Here

This episode brings together six listener questions that each involve a meaningful financial decision and, in several cases, significant personal uncertainty alongside significant financial capacity.

The first comes from a couple in their late thirties who received a substantial inheritance, now holding $3.6m in cash alongside a share portfolio and three properties. They have developed a dual-trust structure with a corporate beneficiary and are seeking a sense-check on whether the approach is sound and whether property still deserves a place in the plan.

The second involves a newly migrated retiree with no Australian income, substantial overseas cash, and five possible approaches to buying property, each with different stamp duty, CGT, and inheritance implications for her two adult daughters.

The third is a series of practical questions about transition to retirement arrangements, when they make sense, what super balance is needed for a modest 25-year retirement, and the tax implications of transferring an investment property to children.

The fourth comes from a 37-year-old in WA with a fully paid-off home, a first child arriving, and a strong savings rate, asking how to prioritise between investment property, shares, and super contributions from here.

The fifth involves a 35-year-old FIFO worker with $536k in savings and investments, strong borrowing capacity, and genuine uncertainty about whether to buy a Perth home alone, jointly with a partner, or through a leapfrog strategy given where the relationship currently sits.

The sixth is a 45-year-old couple with a $300k inheritance, a nearly paid-off Sydney home, three recently purchased investment properties, and a simple question: is paying off the home loan and topping up super really the best use of the windfall?

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19402442 Tue, 30 Jun 2026 05:00:00 +1000 1902 full false Eight Rules Revisited #2: Your freedom number has 3 levers Eight Rules Revisited #2: Your freedom number has 3 levers Pre-order Wealth by Design Here

Episode two of Eight Rules Revisited continues the Thursday series comparing the eight golden rules from Stuart's 2018 book Investopoly with the updated versions in his new book, Wealth by Design, released on 28 July.

Rule 2 states that you must know how much income you need and by when. That principle hasn't moved. What has tightened considerably is everything surrounding it. The two goals now have proper names, the freedom number and the freedom date, and the underlying framework has shifted from a single retirement cliff to three distinct phases of working life, reflecting that most people today want to ease off gradually rather than stop abruptly.

Stuart explains why holding too little outside superannuation can quietly lock people into the all-or-nothing retirement they were trying to avoid, and why planning for at least 30 years of post-work life means growth assets need to remain part of the strategy well into retirement. He also breaks down why a $100,000 income target implying $5 million in assets is far less daunting once it's understood there are three separate levers available to pull, not just one.

The episode closes with a one-page exercise listeners can complete this week to produce a first version of their own freedom number and freedom date. The full worksheet and modelling method appear in chapter two of Wealth by Design.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Pre-order Wealth by Design Here

Episode two of Eight Rules Revisited continues the Thursday series comparing the eight golden rules from Stuart's 2018 book Investopoly with the updated versions in his new book, Wealth by Design, released on 28 July.

Rule 2 states that you must know how much income you need and by when. That principle hasn't moved. What has tightened considerably is everything surrounding it. The two goals now have proper names, the freedom number and the freedom date, and the underlying framework has shifted from a single retirement cliff to three distinct phases of working life, reflecting that most people today want to ease off gradually rather than stop abruptly.

Stuart explains why holding too little outside superannuation can quietly lock people into the all-or-nothing retirement they were trying to avoid, and why planning for at least 30 years of post-work life means growth assets need to remain part of the strategy well into retirement. He also breaks down why a $100,000 income target implying $5 million in assets is far less daunting once it's understood there are three separate levers available to pull, not just one.

The episode closes with a one-page exercise listeners can complete this week to produce a first version of their own freedom number and freedom date. The full worksheet and modelling method appear in chapter two of Wealth by Design.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19362382 Thu, 25 Jun 2026 05:00:00 +1000 1041 full false Ep 414: The 4 decisions that determine 95% of your financial outcome Ep 414: The 4 decisions that determine 95% of your financial outcome Read Full Blog Here

Pre-order Wealth by Design Here

Most people assume building wealth requires making hundreds of good financial decisions. In reality, a small number of choices do almost all of the heavy lifting, and this episode identifies exactly which ones.

The first is the choice of partner, arguably the most important financial decision a person will make. Alignment on spending, saving, and investing dramatically simplifies wealth building, while misalignment creates the stop-start behaviour that derails even well-designed strategies. Divorce, by contrast, is one of the most financially destructive events that can occur, often setting people back further than they can ever fully recover from.

The second is career choice, where lifetime earnings compound dramatically based on income level, and genuine enjoyment of work tends to drive higher earnings over time rather than the reverse. The third is a spending-saving philosophy, not a budget, but a guiding approach that avoids both extremes of overspending and joyless deprivation.

The fourth category covers the tactical decisions that compound over decades: the first property purchased, where the family home is located, how superannuation is invested, the methodology used for investing outside super, and whether to seek professional advice at key decision points.

Notably absent from the list are the decisions the financial media obsesses over: stock picking, market timing, finding the next big winner. The real insight is liberating: get a handful of decisions right, and the rest mostly takes care of itself.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

Pre-order Wealth by Design Here

Most people assume building wealth requires making hundreds of good financial decisions. In reality, a small number of choices do almost all of the heavy lifting, and this episode identifies exactly which ones.

The first is the choice of partner, arguably the most important financial decision a person will make. Alignment on spending, saving, and investing dramatically simplifies wealth building, while misalignment creates the stop-start behaviour that derails even well-designed strategies. Divorce, by contrast, is one of the most financially destructive events that can occur, often setting people back further than they can ever fully recover from.

The second is career choice, where lifetime earnings compound dramatically based on income level, and genuine enjoyment of work tends to drive higher earnings over time rather than the reverse. The third is a spending-saving philosophy, not a budget, but a guiding approach that avoids both extremes of overspending and joyless deprivation.

The fourth category covers the tactical decisions that compound over decades: the first property purchased, where the family home is located, how superannuation is invested, the methodology used for investing outside super, and whether to seek professional advice at key decision points.

Notably absent from the list are the decisions the financial media obsesses over: stock picking, market timing, finding the next big winner. The real insight is liberating: get a handful of decisions right, and the rest mostly takes care of itself.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19361426 Wed, 24 Jun 2026 05:00:00 +1000 1595 414 full false Q&A: Inheritance windfalls, home upgrades, and capital efficiency Q&A: Inheritance windfalls, home upgrades, and capital efficiency Pre-order Wealth by Design Here

This episode brings together four listener scenarios united by a common theme: significant financial capacity, but genuine uncertainty about which move to make next and in what order.

The first comes from a Sydney couple earning $540k who feel house-poor despite their income carrying a $1.9m mortgage on a home bought partly for its duplex potential, with a medium landslide risk and an $800k–$1m overseas inheritance on the way. The questions span inheritance allocation, debt recycling, cash flow management through private school fees, and how to restructure once the husband's income shifts to lumpy partner distributions.

The second involves a Brisbane couple with a $7.8m property portfolio, strong equity, and a clear land-value-focused investment philosophy, now weighing whether to knock down and rebuild their current home, sell and buy in a premium riverside suburb, or hold a vacant subdivided lot for future development ahead of the Olympics.

The third scenario is a Bondi couple renting in Sydney's Eastern Suburbs, earning up to $440k in a good year, with $630k in combined assets and a first child on the horizon, deciding whether to stretch for a $2–3m home now or continue building an investment portfolio through rentvesting.

The fourth comes from a 49-year-old with a $12m property portfolio, $6.3m in equity, and a 15-year horizon to reach $25–30m in net worth, asking whether to stay the course with leveraged property, recycle equity into ETFs and super, or begin deleveraging for higher passive income.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Pre-order Wealth by Design Here

This episode brings together four listener scenarios united by a common theme: significant financial capacity, but genuine uncertainty about which move to make next and in what order.

The first comes from a Sydney couple earning $540k who feel house-poor despite their income carrying a $1.9m mortgage on a home bought partly for its duplex potential, with a medium landslide risk and an $800k–$1m overseas inheritance on the way. The questions span inheritance allocation, debt recycling, cash flow management through private school fees, and how to restructure once the husband's income shifts to lumpy partner distributions.

The second involves a Brisbane couple with a $7.8m property portfolio, strong equity, and a clear land-value-focused investment philosophy, now weighing whether to knock down and rebuild their current home, sell and buy in a premium riverside suburb, or hold a vacant subdivided lot for future development ahead of the Olympics.

The third scenario is a Bondi couple renting in Sydney's Eastern Suburbs, earning up to $440k in a good year, with $630k in combined assets and a first child on the horizon, deciding whether to stretch for a $2–3m home now or continue building an investment portfolio through rentvesting.

The fourth comes from a 49-year-old with a $12m property portfolio, $6.3m in equity, and a 15-year horizon to reach $25–30m in net worth, asking whether to stay the course with leveraged property, recycle equity into ETFs and super, or begin deleveraging for higher passive income.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19359286 Tue, 23 Jun 2026 05:00:00 +1000 2083 full false Eight Rules Revisited #1 - The risk nobody warns you about  Eight Rules Revisited #1 - The risk nobody warns you about  Pre-order Wealth by Design Here

This episode is the first in Eight Rules Revisited, a Thursday series running alongside the regular podcast. Each week, I take one of the eight golden rules from my 2018 book Investopoly and compare it with the version in my new book, Wealth by Design, out on 28 July. Some rules have changed, some have tightened, and some have simply been confirmed by eight more years of evidence and client experience. I'll tell you which is which, plainly, each week. 

We start with Rule 1: think in decades, not days. The rule itself hasn't moved. What has changed is how I think about risk and volatility. In 2018, I told readers to ignore short-term market movements. That was true, but incomplete. I now define risk as the probability of failing to reach your goals, not the chance of watching prices fall. Seen that way, holding too much cash is risky, and refusing to invest in growth assets because they wobble is risky too. Volatility is simply the price of admission for long-term returns, and I put some numbers on how bumpy you should expect the ride to be. 

I also share the four-question filter I now apply to every major financial decision, and a short exercise you can do this week on your next three big decisions. 

If you find this useful, the full frameworks and worked examples are in chapter one of Wealth by Design. Pre-order before 28 July and you'll also receive the Investopoly Research Assistant, an AI tool trained on a decade of my writing. 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Pre-order Wealth by Design Here

This episode is the first in Eight Rules Revisited, a Thursday series running alongside the regular podcast. Each week, I take one of the eight golden rules from my 2018 book Investopoly and compare it with the version in my new book, Wealth by Design, out on 28 July. Some rules have changed, some have tightened, and some have simply been confirmed by eight more years of evidence and client experience. I'll tell you which is which, plainly, each week. 

We start with Rule 1: think in decades, not days. The rule itself hasn't moved. What has changed is how I think about risk and volatility. In 2018, I told readers to ignore short-term market movements. That was true, but incomplete. I now define risk as the probability of failing to reach your goals, not the chance of watching prices fall. Seen that way, holding too much cash is risky, and refusing to invest in growth assets because they wobble is risky too. Volatility is simply the price of admission for long-term returns, and I put some numbers on how bumpy you should expect the ride to be. 

I also share the four-question filter I now apply to every major financial decision, and a short exercise you can do this week on your next three big decisions. 

If you find this useful, the full frameworks and worked examples are in chapter one of Wealth by Design. Pre-order before 28 July and you'll also receive the Investopoly Research Assistant, an AI tool trained on a decade of my writing. 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19334232 Thu, 18 Jun 2026 05:00:00 +1000 1049 full false Ep 413 : What financial advisers really do with their own money Ep 413 : What financial advisers really do with their own money Read Full Blog Here

Pre-order Wealth by Design Here

Financial advisers often manage their own money quite differently from the clients they advise. After more than two decades of observing both groups up close, those differences have become a reliable indicator of what genuinely good financial decision-making looks like in practice.

In this episode, Stuart shares nine observations drawn from that experience. Most financial advisers hold their superannuation entirely in growth assets, understanding that short-term volatility inside super is largely irrelevant when the money cannot be accessed for decades. They welcome falling markets rather than fear them. They use debt deliberately, neither avoiding it entirely nor using it recklessly, and they invest consistently from surplus cash flow rather than waiting for the right moment that rarely arrives.

Their household finances follow a clear structural discipline: invest first, then spend what remains. They track their net worth regularly and understand what the numbers actually mean. They treat superannuation as a serious wealth-building vehicle from early in their careers, often choosing wrap platforms or SMSFs for the control and transparency they provide. And they largely ignore the daily noise of market movements, checking their own portfolios far less frequently than most people would expect.

Some of these patterns sit at odds with conventional industry practice. That tension is worth examining, both for investors choosing how to manage their own money and for those deciding whether their adviser truly practises what they preach.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

Pre-order Wealth by Design Here

Financial advisers often manage their own money quite differently from the clients they advise. After more than two decades of observing both groups up close, those differences have become a reliable indicator of what genuinely good financial decision-making looks like in practice.

In this episode, Stuart shares nine observations drawn from that experience. Most financial advisers hold their superannuation entirely in growth assets, understanding that short-term volatility inside super is largely irrelevant when the money cannot be accessed for decades. They welcome falling markets rather than fear them. They use debt deliberately, neither avoiding it entirely nor using it recklessly, and they invest consistently from surplus cash flow rather than waiting for the right moment that rarely arrives.

Their household finances follow a clear structural discipline: invest first, then spend what remains. They track their net worth regularly and understand what the numbers actually mean. They treat superannuation as a serious wealth-building vehicle from early in their careers, often choosing wrap platforms or SMSFs for the control and transparency they provide. And they largely ignore the daily noise of market movements, checking their own portfolios far less frequently than most people would expect.

Some of these patterns sit at odds with conventional industry practice. That tension is worth examining, both for investors choosing how to manage their own money and for those deciding whether their adviser truly practises what they preach.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19333901 Wed, 17 Jun 2026 05:00:00 +1000 1862 413 full false Q&A - Housing wealth in retirement, super timing, and the 20-year plan Q&A - Housing wealth in retirement, super timing, and the 20-year plan Pre-order Wealth by Design Here

This episode brings together four listener questions united by a common challenge: knowing which lever to pull next when the financial position is solid but the path forward feels unclear.

The first comes from a retiree who connected with a recent episode on underspending in retirement, but raises a dimension that wasn't covered how to factor substantial debt-free property wealth, including a principal residence and a beach house, into retirement income planning. The question is whether to sell, rent, or consider a reverse mortgage to unlock equity before those assets simply pass to the next generation.

The second involves a 60-year-old about to access a $2.1 million superannuation pension, with a part-time working wife five years from her own preservation age. The question is whether additional contributions to her fund over the next two years represent the highest-value use of surplus cash flow.

The third is a detailed scenario from a 43-year-old with a $2.65 million home, a Geelong investment property, $200k in shares, and two children in private school asking how to prioritise debt reduction, renovations, asset allocation, and ownership structure across a 20-year runway to retirement at 60.

The fourth involves an SMSF holding a Townsville investment property with a $375k LRBA loan, and the strategic tension between building liquidity inside the fund versus aggressively paying down debt alongside a broader question about whether downsizing the family home should factor into the plan.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Pre-order Wealth by Design Here

This episode brings together four listener questions united by a common challenge: knowing which lever to pull next when the financial position is solid but the path forward feels unclear.

The first comes from a retiree who connected with a recent episode on underspending in retirement, but raises a dimension that wasn't covered how to factor substantial debt-free property wealth, including a principal residence and a beach house, into retirement income planning. The question is whether to sell, rent, or consider a reverse mortgage to unlock equity before those assets simply pass to the next generation.

The second involves a 60-year-old about to access a $2.1 million superannuation pension, with a part-time working wife five years from her own preservation age. The question is whether additional contributions to her fund over the next two years represent the highest-value use of surplus cash flow.

The third is a detailed scenario from a 43-year-old with a $2.65 million home, a Geelong investment property, $200k in shares, and two children in private school asking how to prioritise debt reduction, renovations, asset allocation, and ownership structure across a 20-year runway to retirement at 60.

The fourth involves an SMSF holding a Townsville investment property with a $375k LRBA loan, and the strategic tension between building liquidity inside the fund versus aggressively paying down debt alongside a broader question about whether downsizing the family home should factor into the plan.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19328867 Tue, 16 Jun 2026 05:00:00 +1000 2006 full false Ep 412: Beware: Commercial property values look stretched Ep 412: Beware: Commercial property values look stretched Read Full Blog Here

Pre- Order Wealth By Design Here

Commercial property is being actively promoted as a compelling alternative to residential investment, particularly as higher interest rates reduce borrowing capacity and tighter tenancy laws make residential property less attractive. On the surface, the pitch is appealing: higher rental yields, tenants paying most outgoings, and the potential for capital growth. But in Stuart's assessment, current valuations make the risk hard to justify.

This episode examines commercial property through a valuation lens, explaining how cap rates work, why current pricing looks stretched relative to historical norms, and how the spread between commercial yields and the 10-year government bond rate has compressed to levels last seen before the GFC. At recent auction prices, some properties are selling on cap rates below the risk-free rate, meaning investors are accepting less income than a government bond while taking on substantially more risk.

The analysis models what happens to investor equity if cap rates revert toward their long-term average of 3.5% to 4.5% above the bond rate. The results are stark: at 70% leverage, a reversion to historical norms could wipe out most or all of an investor's equity.

Stuart also explores why cap rates have stayed compressed despite rising bond yields, and why the structural forces holding valuations up may not last. Commercial property can be an excellent investment, but only at the right price.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

Pre- Order Wealth By Design Here

Commercial property is being actively promoted as a compelling alternative to residential investment, particularly as higher interest rates reduce borrowing capacity and tighter tenancy laws make residential property less attractive. On the surface, the pitch is appealing: higher rental yields, tenants paying most outgoings, and the potential for capital growth. But in Stuart's assessment, current valuations make the risk hard to justify.

This episode examines commercial property through a valuation lens, explaining how cap rates work, why current pricing looks stretched relative to historical norms, and how the spread between commercial yields and the 10-year government bond rate has compressed to levels last seen before the GFC. At recent auction prices, some properties are selling on cap rates below the risk-free rate, meaning investors are accepting less income than a government bond while taking on substantially more risk.

The analysis models what happens to investor equity if cap rates revert toward their long-term average of 3.5% to 4.5% above the bond rate. The results are stark: at 70% leverage, a reversion to historical norms could wipe out most or all of an investor's equity.

Stuart also explores why cap rates have stayed compressed despite rising bond yields, and why the structural forces holding valuations up may not last. Commercial property can be an excellent investment, but only at the right price.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19306940 Wed, 10 Jun 2026 05:00:00 +1000 1990 412 full false Q&A - Listener scenarios unpacked: Perth timing, seven properties and no shares, and a retirement direction check Q&A - Listener scenarios unpacked: Perth timing, seven properties and no shares, and a retirement direction check Pre-Order Wealth by Design Here

This episode brings together three listener scenarios that each involve genuinely complex financial positions, multiple moving parts, significant income, and decisions where getting the sequencing right matters enormously.

The first comes from a 34-year-old specialist trainee doctor in Sydney, engaged, planning a family, and facing a highly unusual income trajectory, moving from $250k now to as low as $130k during a London fellowship, before returning to Perth as a consultant earning potentially $600k or more. The central question is whether to buy a stepping-stone property in Perth's middle-ring suburbs before income rises, renovate it during an 18-month stay, then rent it out while overseas, or wait, save, and buy a better asset closer to his forever suburbs once borrowing capacity is fully established.

The second involves a 49-year-old earning $475k with seven Melbourne investment properties worth $6.77 million, net debt of just $330k, and $920k in super, but almost no share exposure. She is three years from being able to retire on rental income, but is questioning whether her heavily concentrated, all-property strategy leaves too much on the table in terms of tax efficiency, liquidity, and long-term portfolio resilience.

The third comes from a couple in their early fifties with a nearly paid-off home, a modest investment property in a good school zone, $1.2 million in combined super, and $100k in underperforming shares, asking for honest clarity on whether early retirement is realistic and what the best path forward looks like across property, shares, and super contributions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Pre-Order Wealth by Design Here

This episode brings together three listener scenarios that each involve genuinely complex financial positions, multiple moving parts, significant income, and decisions where getting the sequencing right matters enormously.

The first comes from a 34-year-old specialist trainee doctor in Sydney, engaged, planning a family, and facing a highly unusual income trajectory, moving from $250k now to as low as $130k during a London fellowship, before returning to Perth as a consultant earning potentially $600k or more. The central question is whether to buy a stepping-stone property in Perth's middle-ring suburbs before income rises, renovate it during an 18-month stay, then rent it out while overseas, or wait, save, and buy a better asset closer to his forever suburbs once borrowing capacity is fully established.

The second involves a 49-year-old earning $475k with seven Melbourne investment properties worth $6.77 million, net debt of just $330k, and $920k in super, but almost no share exposure. She is three years from being able to retire on rental income, but is questioning whether her heavily concentrated, all-property strategy leaves too much on the table in terms of tax efficiency, liquidity, and long-term portfolio resilience.

The third comes from a couple in their early fifties with a nearly paid-off home, a modest investment property in a good school zone, $1.2 million in combined super, and $100k in underperforming shares, asking for honest clarity on whether early retirement is realistic and what the best path forward looks like across property, shares, and super contributions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19310229 Tue, 09 Jun 2026 05:00:00 +1000 1957 full false Ep 411: Should you invest all your super into an internally geared ETF Ep 411: Should you invest all your super into an internally geared ETF Pre-order Wealth by Design Here

Read Full Blog Here

Superannuation's enforced long investment horizon is one of the most underused structural advantages available to Australian investors. This blog examines whether internally geared ETFs have a role to play within super, and backs the analysis with detailed financial modelling rather than theory alone.

The numbers are compelling. A 30-year-old with $200,000 in super, contributing $20,000 per year and investing in a geared diversified ETF via an SMSF, is projected to retire with a balance of approximately $4.3 million, more than 26% higher than an equivalent ungeared strategy in a low-cost industry fund. The benefit is most pronounced for younger investors with larger balances, longer timeframes, and higher contribution rates. As retirement approaches, the case for gearing weakens materially.

But the strategy carries real risks that deserve equal attention. Volatility is amplified; a 50% market fall in a 35% geared ETF produces a balance decline of around 77%. Sequence-of-returns risk can turn a strong strategy into a poor one, depending on when a major correction occurs. And the cost and compliance obligations of running an SMSF add a layer of responsibility that should not be taken lightly.

The blog also surveys the available geared ETF options in Australia, covering diversified and single-market products across a range of gearing levels. The conclusion is clear: gearing inside super can be genuinely attractive, but is best treated as a complement to ungeared strategies rather than an all-or-nothing decision.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Pre-order Wealth by Design Here

Read Full Blog Here

Superannuation's enforced long investment horizon is one of the most underused structural advantages available to Australian investors. This blog examines whether internally geared ETFs have a role to play within super, and backs the analysis with detailed financial modelling rather than theory alone.

The numbers are compelling. A 30-year-old with $200,000 in super, contributing $20,000 per year and investing in a geared diversified ETF via an SMSF, is projected to retire with a balance of approximately $4.3 million, more than 26% higher than an equivalent ungeared strategy in a low-cost industry fund. The benefit is most pronounced for younger investors with larger balances, longer timeframes, and higher contribution rates. As retirement approaches, the case for gearing weakens materially.

But the strategy carries real risks that deserve equal attention. Volatility is amplified; a 50% market fall in a 35% geared ETF produces a balance decline of around 77%. Sequence-of-returns risk can turn a strong strategy into a poor one, depending on when a major correction occurs. And the cost and compliance obligations of running an SMSF add a layer of responsibility that should not be taken lightly.

The blog also surveys the available geared ETF options in Australia, covering diversified and single-market products across a range of gearing levels. The conclusion is clear: gearing inside super can be genuinely attractive, but is best treated as a complement to ungeared strategies rather than an all-or-nothing decision.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19251945 Wed, 03 Jun 2026 05:00:00 +1000 1917 411 full false Q&A - Property vs Shares: retirement sequencing, and the cash-waiting strategy Q&A - Property vs Shares: retirement sequencing, and the cash-waiting strategy Pre-Order Wealth by Design Here

This episode brings together four listener questions that each wrestle with a different dimension of long-term wealth building, from the early decisions that set the trajectory to the late-stage sequencing that determines how comfortably retirement unfolds.

The first comes from a 28-year-old physiotherapist two years into his career, carrying $1.1 million in mortgage debt and a $98k HECS liability, asking whether surplus savings should flow into ETFs or the offset account, and whether his wife's extra super contributions are optimally placed.

The second involves a couple aged 63 and 53 with three beachside properties, $780k in PPOR debt, and a combined income of $150k, working through four possible exit strategies to generate $150k per year in retirement income while preserving as much capital growth as possible for as long as practical.

The third is a thoughtful counter-perspective on Australia's proposed CGT changes, arguing that redirecting capital from residential property into shares could strengthen the nation's productive capacity and reduce its dependence on housing and mining wealth.

The fourth comes from a 44-year-old with three Brisbane investment properties, no shares, and 50% of his super sitting in cash since the GFC, waiting for the next major dip. He asks whether to buy a fourth property or begin tilting toward shares, and whether his cash-timing strategy inside super is sound.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Pre-Order Wealth by Design Here

This episode brings together four listener questions that each wrestle with a different dimension of long-term wealth building, from the early decisions that set the trajectory to the late-stage sequencing that determines how comfortably retirement unfolds.

The first comes from a 28-year-old physiotherapist two years into his career, carrying $1.1 million in mortgage debt and a $98k HECS liability, asking whether surplus savings should flow into ETFs or the offset account, and whether his wife's extra super contributions are optimally placed.

The second involves a couple aged 63 and 53 with three beachside properties, $780k in PPOR debt, and a combined income of $150k, working through four possible exit strategies to generate $150k per year in retirement income while preserving as much capital growth as possible for as long as practical.

The third is a thoughtful counter-perspective on Australia's proposed CGT changes, arguing that redirecting capital from residential property into shares could strengthen the nation's productive capacity and reduce its dependence on housing and mining wealth.

The fourth comes from a 44-year-old with three Brisbane investment properties, no shares, and 50% of his super sitting in cash since the GFC, waiting for the next major dip. He asks whether to buy a fourth property or begin tilting toward shares, and whether his cash-timing strategy inside super is sound.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19253335 Tue, 02 Jun 2026 05:00:00 +1000 2072 full false Ep 410: What Charlie Munger's investing checklist means for Australian investors Ep 410: What Charlie Munger's investing checklist means for Australian investors Pre-Order Wealth by Design Here

Read Full Blog Here

Charlie Munger left investors with ten principles that are deceptively simple and take a lifetime to apply well. This blog translates each one into practical, grounded guidance for Australian investors, moving beyond abstract philosophy to the specific decisions, mistakes, and behaviours that shape long-term outcomes in local property and share markets.

The ten principles cover starting every evaluation with downside risk before upside potential; building genuine independence from the conflicted advice that is common in Australian investment markets; preparation as the only real edge available to most investors; intellectual humility as a competitive advantage rather than a weakness; and analytical rigour that insists on evidence over compelling narratives.

The blog also explores capital allocation as the investor's single most important decision, patience as a structural advantage in a media environment designed to provoke action, decisiveness when the setup is genuinely clear, adaptability in the face of unremovable complexity like tax changes and interest rate cycles, and simplicity as the ultimate discipline.

Underlying all ten rules are four behaviours: preparation, discipline, patience, and decisiveness. These are not just investing virtues, they are the foundation of any long-term wealth-building strategy that actually works.

The hard part is never the knowledge. It is doing it consistently while the world tries very hard to distract you.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Pre-Order Wealth by Design Here

Read Full Blog Here

Charlie Munger left investors with ten principles that are deceptively simple and take a lifetime to apply well. This blog translates each one into practical, grounded guidance for Australian investors, moving beyond abstract philosophy to the specific decisions, mistakes, and behaviours that shape long-term outcomes in local property and share markets.

The ten principles cover starting every evaluation with downside risk before upside potential; building genuine independence from the conflicted advice that is common in Australian investment markets; preparation as the only real edge available to most investors; intellectual humility as a competitive advantage rather than a weakness; and analytical rigour that insists on evidence over compelling narratives.

The blog also explores capital allocation as the investor's single most important decision, patience as a structural advantage in a media environment designed to provoke action, decisiveness when the setup is genuinely clear, adaptability in the face of unremovable complexity like tax changes and interest rate cycles, and simplicity as the ultimate discipline.

Underlying all ten rules are four behaviours: preparation, discipline, patience, and decisiveness. These are not just investing virtues, they are the foundation of any long-term wealth-building strategy that actually works.

The hard part is never the knowledge. It is doing it consistently while the world tries very hard to distract you.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19215437 Wed, 27 May 2026 05:00:00 +1000 2008 410 full false Q&A - Starting out, scaling up, and knowing when to sell Q&A - Starting out, scaling up, and knowing when to sell Pre-Order Wealth by Design Here

This episode brings together five listener scenarios that span the full arc of wealth building, from a 24-year-old taking his first steps to couples approaching retirement with complex, multi-property portfolios and competing priorities.

The first question comes from a 24-year-old earning $80k with $75k across shares and savings, limited borrowing capacity, and a genuine desire to start building wealth deliberately. The question is simple but important: shares or property first?

The second involves a Perth couple in their late forties, accidental investors who now hold four investment properties across Perth, regional NSW, and WA, asking whether their current asset base is enough to deliver $100k in passive income by age 60 and what strategy adjustments might be needed to get there.

The third scenario involves a high-income Sydney couple with a $3.5 million family home and two investment properties, weighing whether to sell a Box Hill property they no longer consider investment-grade to fund a $750k renovation, or hold it and carry a larger debt into their early fifties.

The fourth comes from a couple planning to retire at 55 and live in Asia on $110k per year, with a plan to sell two investment properties and shift proceeds into index funds while renting out their home.

The fifth involves a rural GP with three properties, strong income growth ahead, and a clear plan to purchase in Brisbane, looking for a sense check on sequencing, asset selection, and whether the strategy holds up as family life approaches.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Pre-Order Wealth by Design Here

This episode brings together five listener scenarios that span the full arc of wealth building, from a 24-year-old taking his first steps to couples approaching retirement with complex, multi-property portfolios and competing priorities.

The first question comes from a 24-year-old earning $80k with $75k across shares and savings, limited borrowing capacity, and a genuine desire to start building wealth deliberately. The question is simple but important: shares or property first?

The second involves a Perth couple in their late forties, accidental investors who now hold four investment properties across Perth, regional NSW, and WA, asking whether their current asset base is enough to deliver $100k in passive income by age 60 and what strategy adjustments might be needed to get there.

The third scenario involves a high-income Sydney couple with a $3.5 million family home and two investment properties, weighing whether to sell a Box Hill property they no longer consider investment-grade to fund a $750k renovation, or hold it and carry a larger debt into their early fifties.

The fourth comes from a couple planning to retire at 55 and live in Asia on $110k per year, with a plan to sell two investment properties and shift proceeds into index funds while renting out their home.

The fifth involves a rural GP with three properties, strong income growth ahead, and a clear plan to purchase in Brisbane, looking for a sense check on sequencing, asset selection, and whether the strategy holds up as family life approaches.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-19215418 Tue, 26 May 2026 05:00:00 +1000 2064 full false Ep 409: Super contribution strategies to consider before 30 June 2026 Ep 409: Super contribution strategies to consider before 30 June 2026 Read Full Blog Here

With 30 June approaching, now is the time to review your superannuation contribution options before the annual window closes. Most of the levers available inside super operate within a tight 12-month period, and several are use-it-or-lose-it; miss the deadline, and the opportunity is gone.

This blog walks through 10 strategies worth considering before the end of the financial year. Concessional contributions remain the most tax-effective way to grow super for most Australians, with the tax saving sharpening significantly at higher income levels. Catch-up contributions deserve particular attention this year: 2025/26 is the final opportunity to use any unused cap from 2020/21, and once that year's unused amount expires, it cannot be carried forward.

Other strategies covered include contribution splitting to equalise balances between spouses, increasingly important in the context of Division 296, non-concessional contributions and the bring-forward rule, government co-contributions for lower-income earners, downsizer contributions for those aged 55 and over, spousal contributions, small business CGT cap contributions, the First Home Super Saver Scheme, and transfer balance cap planning for those approaching or already in retirement.

The blog also covers contribution reserving for SMSF members and includes a practical checklist of steps to complete before 30 June. Contributions must be received and allocated by your fund before the deadline, not simply sent. Acting by 20 June is strongly recommended.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

With 30 June approaching, now is the time to review your superannuation contribution options before the annual window closes. Most of the levers available inside super operate within a tight 12-month period, and several are use-it-or-lose-it; miss the deadline, and the opportunity is gone.

This blog walks through 10 strategies worth considering before the end of the financial year. Concessional contributions remain the most tax-effective way to grow super for most Australians, with the tax saving sharpening significantly at higher income levels. Catch-up contributions deserve particular attention this year: 2025/26 is the final opportunity to use any unused cap from 2020/21, and once that year's unused amount expires, it cannot be carried forward.

Other strategies covered include contribution splitting to equalise balances between spouses, increasingly important in the context of Division 296, non-concessional contributions and the bring-forward rule, government co-contributions for lower-income earners, downsizer contributions for those aged 55 and over, spousal contributions, small business CGT cap contributions, the First Home Super Saver Scheme, and transfer balance cap planning for those approaching or already in retirement.

The blog also covers contribution reserving for SMSF members and includes a practical checklist of steps to complete before 30 June. Contributions must be received and allocated by your fund before the deadline, not simply sent. Acting by 20 June is strongly recommended.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19170620 Wed, 20 May 2026 05:00:00 +1000 2063 409 full false Q&A - Income goals, property trade-offs, and the Division 296 unpacked Q&A - Income goals, property trade-offs, and the Division 296 unpacked This episode brings together five listener scenarios united by a common thread: making sound financial decisions under competing pressures: income goals, asset quality, tax reform, and the desire for more time and freedom.

The first comes from a couple, both aged 40, with three investment properties and a growing ETF portfolio, asking what it will take to reach $200k in net annual income and reduce their working days as early as possible.

The second raises a technical but important question: under Division 296, are franking credits effectively taxed twice for those whose super balances exceed $3 million before they can access them?

The third involves a 50-year-old with an underperforming St Kilda East apartment that has delivered modest capital growth, ongoing negative cash flow, and rising body corporate costs, and whether selling and redirecting proceeds into super or a diversified ETF portfolio makes more sense than holding on.

The fourth scenario comes from a high-income couple in their mid-fifties with four investment properties and a fully offset home loan, questioning whether selling their northern Melbourne property could eliminate the need for ongoing contributions and create space to reduce working hours.

The fifth is one of the most complex scenarios the show has received — a self-funded retiree with a $4 million SMSF, a $2.8 million margin loan, and a carefully constructed strategy to reduce super below the Division 296 threshold before the tax takes effect.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> This episode brings together five listener scenarios united by a common thread: making sound financial decisions under competing pressures: income goals, asset quality, tax reform, and the desire for more time and freedom.

The first comes from a couple, both aged 40, with three investment properties and a growing ETF portfolio, asking what it will take to reach $200k in net annual income and reduce their working days as early as possible.

The second raises a technical but important question: under Division 296, are franking credits effectively taxed twice for those whose super balances exceed $3 million before they can access them?

The third involves a 50-year-old with an underperforming St Kilda East apartment that has delivered modest capital growth, ongoing negative cash flow, and rising body corporate costs, and whether selling and redirecting proceeds into super or a diversified ETF portfolio makes more sense than holding on.

The fourth scenario comes from a high-income couple in their mid-fifties with four investment properties and a fully offset home loan, questioning whether selling their northern Melbourne property could eliminate the need for ongoing contributions and create space to reduce working hours.

The fifth is one of the most complex scenarios the show has received — a self-funded retiree with a $4 million SMSF, a $2.8 million margin loan, and a carefully constructed strategy to reduce super below the Division 296 threshold before the tax takes effect.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19168568 Tue, 19 May 2026 05:00:00 +1000 2135 full false Special: From 11% to 8.4% - What the 2026 Budget does to property investment returns Special: From 11% to 8.4% - What the 2026 Budget does to property investment returns This special episode is a replay of a YouTube presentation which is a calm, numbers-led walkthrough of the 2026 Federal Budget - recorded roughly 40 hours after budget night - focused on the three proposals most likely to affect investors: negative gearing, capital gains tax, and family trusts. The deliberate frame throughout is that nothing is law yet, the political debate is far from settled, and listeners should resist making 20-year decisions on 40-hour-old announcements.

On negative gearing, you and Mena explain that existing properties are grandfathered, with a transitionary window to 1 July 2027 and carve-outs for new builds, commercial property and shares. The modelling is sobering: combining the proposed loss of negative gearing with the higher CGT cuts the after-tax internal rate of return on a typical investment-grade property from around 11% to 8.4% - a 24% drop - raising the question of whether direct residential property still compensates for its risks compared with superannuation.

On CGT, a minimum 30% rate (or an indexation method) applies across all asset classes from 1 July 2027, with cost-base resets, pre-1985 assets and the maths of indexation versus the old 50% discount worked through in detail.

On family trusts, the proposed flat 30% rate on distributions, combined with the loss of franking credit flow-through via corporate beneficiaries, could push effective tax on retained business earnings as high as 60% - the change you both flag as most likely to be wound back.

Other angles include why new house-and-land packages remain a poor investment despite their tax appeal, the likely (modest) aggregate impact on prices and rents, the 15–20% hit to borrowing capacity, bank credit-policy uncertainty, and why the family home and super become even more central wealth vehicles.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> This special episode is a replay of a YouTube presentation which is a calm, numbers-led walkthrough of the 2026 Federal Budget - recorded roughly 40 hours after budget night - focused on the three proposals most likely to affect investors: negative gearing, capital gains tax, and family trusts. The deliberate frame throughout is that nothing is law yet, the political debate is far from settled, and listeners should resist making 20-year decisions on 40-hour-old announcements.

On negative gearing, you and Mena explain that existing properties are grandfathered, with a transitionary window to 1 July 2027 and carve-outs for new builds, commercial property and shares. The modelling is sobering: combining the proposed loss of negative gearing with the higher CGT cuts the after-tax internal rate of return on a typical investment-grade property from around 11% to 8.4% - a 24% drop - raising the question of whether direct residential property still compensates for its risks compared with superannuation.

On CGT, a minimum 30% rate (or an indexation method) applies across all asset classes from 1 July 2027, with cost-base resets, pre-1985 assets and the maths of indexation versus the old 50% discount worked through in detail.

On family trusts, the proposed flat 30% rate on distributions, combined with the loss of franking credit flow-through via corporate beneficiaries, could push effective tax on retained business earnings as high as 60% - the change you both flag as most likely to be wound back.

Other angles include why new house-and-land packages remain a poor investment despite their tax appeal, the likely (modest) aggregate impact on prices and rents, the 15–20% hit to borrowing capacity, bank credit-policy uncertainty, and why the family home and super become even more central wealth vehicles.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19179502 Fri, 15 May 2026 08:00:00 +1000 3231 full false Ep. 408: 2026 Federal Budget: Big tax changes, but do not panic yet Ep. 408: 2026 Federal Budget: Big tax changes, but do not panic yet Register for Thursday's live event 

Read Full Blog Here

The 2026-27 Federal Budget included some of the most significant proposed tax changes we have seen in many years.

In this episode, I unpack the key announcements affecting investors, property owners, business owners, and families, including proposed changes to capital gains tax, negative gearing, and the taxation of discretionary trusts. I also cover the permanent extension of the $20,000 instant asset write-off, proposed personal tax changes, the return of company loss carry-back rules, start-up loss refundability, and the wind-back of the electric vehicle FBT exemption.

The biggest proposed changes are substantial. The Government has announced a new capital gains tax framework, changes that would limit negative gearing on established residential property, and a 30% minimum tax on discretionary trusts. If legislated in their current form, these measures could materially affect long-term investment decisions, business structures, and family wealth strategies.

But the most important point is this: none of the major reforms has been legislated yet.

Tax announcements often change before they become law, and some never become law at all. So, whilst these proposals deserve close attention, they should not trigger rushed decisions. The prudent approach is to understand the potential implications, monitor the legislation closely, and only act once the final rules are known.

Good financial decisions are rarely made in panic. The aim is to remain calm, informed and strategic.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Register for Thursday's live event 

Read Full Blog Here

The 2026-27 Federal Budget included some of the most significant proposed tax changes we have seen in many years.

In this episode, I unpack the key announcements affecting investors, property owners, business owners, and families, including proposed changes to capital gains tax, negative gearing, and the taxation of discretionary trusts. I also cover the permanent extension of the $20,000 instant asset write-off, proposed personal tax changes, the return of company loss carry-back rules, start-up loss refundability, and the wind-back of the electric vehicle FBT exemption.

The biggest proposed changes are substantial. The Government has announced a new capital gains tax framework, changes that would limit negative gearing on established residential property, and a 30% minimum tax on discretionary trusts. If legislated in their current form, these measures could materially affect long-term investment decisions, business structures, and family wealth strategies.

But the most important point is this: none of the major reforms has been legislated yet.

Tax announcements often change before they become law, and some never become law at all. So, whilst these proposals deserve close attention, they should not trigger rushed decisions. The prudent approach is to understand the potential implications, monitor the legislation closely, and only act once the final rules are known.

Good financial decisions are rarely made in panic. The aim is to remain calm, informed and strategic.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19163880 Wed, 13 May 2026 05:00:00 +1000 1924 408 full false Q&A - First homes, equity deployment, and SMSF unpacked Q&A - First homes, equity deployment, and SMSF unpacked Register For Live Here

This episode brings together four listener questions that each wrestle with some of the most practical and consequential decisions in personal finance: how hard to push for a first home, where to deploy idle equity, when an SMSF makes sense, and how to identify genuinely investment-grade property in a market where houses are out of reach.

A couple in their early thirties transitioning out of academia, with $500k in ETFs and a clear desire to buy a home in Brisbane before starting a family. The question is how much to stretch and whether selling down shares to secure a larger land component in a blue-chip suburb is worth the reduction in leverage and long-term return.

The second involves a high-income investor in the top tax bracket with $250k of usable equity sitting idle in an investment property. With blue-chip Brisbane houses beyond comfortable reach and a preference for liquidity and flexibility, he questions whether a leveraged ETF path is a rational default over further property exposure.

The third question examines whether an SMSF makes sense for a couple with $420k in combined super who plan to invest exclusively in ETFs, weighing the tax drag, administrative burden, and complexity against the simplicity of a choice investment option.

The final scenario tackles how to evaluate land value in investment-grade apartments, using a specific Melbourne listing as a practical case study for a couple priced out of houses but committed to a smart first purchase.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Register For Live Here

This episode brings together four listener questions that each wrestle with some of the most practical and consequential decisions in personal finance: how hard to push for a first home, where to deploy idle equity, when an SMSF makes sense, and how to identify genuinely investment-grade property in a market where houses are out of reach.

A couple in their early thirties transitioning out of academia, with $500k in ETFs and a clear desire to buy a home in Brisbane before starting a family. The question is how much to stretch and whether selling down shares to secure a larger land component in a blue-chip suburb is worth the reduction in leverage and long-term return.

The second involves a high-income investor in the top tax bracket with $250k of usable equity sitting idle in an investment property. With blue-chip Brisbane houses beyond comfortable reach and a preference for liquidity and flexibility, he questions whether a leveraged ETF path is a rational default over further property exposure.

The third question examines whether an SMSF makes sense for a couple with $420k in combined super who plan to invest exclusively in ETFs, weighing the tax drag, administrative burden, and complexity against the simplicity of a choice investment option.

The final scenario tackles how to evaluate land value in investment-grade apartments, using a specific Melbourne listing as a practical case study for a couple priced out of houses but committed to a smart first purchase.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19133919 Tue, 12 May 2026 05:00:00 +1000 2021 full false Ep 407: The investors who obsess over tax often miss what matters more Ep 407: The investors who obsess over tax often miss what matters more Read Full Blog Here

Register For Live Event Here

Tax is psychologically painful, but for investors, over-fixating on it is a genuine risk. The drive to minimise tax can lead to decisions far more costly than the tax itself, and this blog makes the case for keeping it in its proper place.

Using financial modelling across both property and shares, Stuart examines the real impact of capital gains tax on internal rates of return over 30 years. The findings are instructive: CGT changes have a surprisingly modest effect on outcomes. What actually drives returns is gearing and the asset's underlying performance. In fact, modelling a scenario where tax is eliminated produces a lower return, because the negative gearing deductions lost along the way are worth more than the CGT saved at the end.

The blog then works through the decisions that genuinely matter: ownership structure, funding structure, and asset selection. Whether to hold investments personally, through a family trust, or in a company, whether and how much to gear, and how proactively investments are managed, these variables shape the bulk of long-term outcomes before tax planning even enters the picture.

The closing hierarchy is clear: asset quality first, gearing second, structure third, tax optimisation last. By the time investors reach item four, most of the outcome is already determined.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

Register For Live Event Here

Tax is psychologically painful, but for investors, over-fixating on it is a genuine risk. The drive to minimise tax can lead to decisions far more costly than the tax itself, and this blog makes the case for keeping it in its proper place.

Using financial modelling across both property and shares, Stuart examines the real impact of capital gains tax on internal rates of return over 30 years. The findings are instructive: CGT changes have a surprisingly modest effect on outcomes. What actually drives returns is gearing and the asset's underlying performance. In fact, modelling a scenario where tax is eliminated produces a lower return, because the negative gearing deductions lost along the way are worth more than the CGT saved at the end.

The blog then works through the decisions that genuinely matter: ownership structure, funding structure, and asset selection. Whether to hold investments personally, through a family trust, or in a company, whether and how much to gear, and how proactively investments are managed, these variables shape the bulk of long-term outcomes before tax planning even enters the picture.

The closing hierarchy is clear: asset quality first, gearing second, structure third, tax optimisation last. By the time investors reach item four, most of the outcome is already determined.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19126803 Wed, 06 May 2026 05:00:00 +1000 1737 407 full false Q&A - Simplicity vs Optimisation: leverage, liquidity, and super strategy Q&A - Simplicity vs Optimisation: leverage, liquidity, and super strategy This episode brings together three listener questions that each wrestle, in different ways, with the tension between financial optimisation and practical simplicity, and whether the most technically efficient strategy is always the right one for a given stage of life.

The first scenario involves a couple in their mid-thirties with a solid net worth of $2.5 million, a newborn, and a clear long-term goal of achieving financial independence by 55. With their forever home complete, the question is whether to retain their investment property and continue debt recycling, or sell, simplify the structure, and redeploy proceeds into a leveraged ETF portfolio trading some long-term upside for meaningfully reduced complexity and stress.

The second scenario involves a Melbourne real estate agent with commission-only income, a young family, and a fully offset investment loan sitting idle. He is weighing three options: do nothing, deploy the loan into a diversified ETF, or use it as a deposit on an investment property, all while preserving flexibility for a planned home upgrade within five to ten years.

The third question shifts to the superannuation structure, exploring platform super vehicles like Netwealth, how they differ from industry funds, what protections investors should understand, and whether a split strategy across fund types can make sense depending on balance and investment goals.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> This episode brings together three listener questions that each wrestle, in different ways, with the tension between financial optimisation and practical simplicity, and whether the most technically efficient strategy is always the right one for a given stage of life.

The first scenario involves a couple in their mid-thirties with a solid net worth of $2.5 million, a newborn, and a clear long-term goal of achieving financial independence by 55. With their forever home complete, the question is whether to retain their investment property and continue debt recycling, or sell, simplify the structure, and redeploy proceeds into a leveraged ETF portfolio trading some long-term upside for meaningfully reduced complexity and stress.

The second scenario involves a Melbourne real estate agent with commission-only income, a young family, and a fully offset investment loan sitting idle. He is weighing three options: do nothing, deploy the loan into a diversified ETF, or use it as a deposit on an investment property, all while preserving flexibility for a planned home upgrade within five to ten years.

The third question shifts to the superannuation structure, exploring platform super vehicles like Netwealth, how they differ from industry funds, what protections investors should understand, and whether a split strategy across fund types can make sense depending on balance and investment goals.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19119235 Tue, 05 May 2026 05:00:00 +1000 1872 full false Ep 406: The policy risk most property investors are ignoring Ep 406: The policy risk most property investors are ignoring Read Full Blog Here

Australian property investment is facing a structural shift, and regulatory change is at the centre of it. This blog examines how rising holding costs, taxation, and tenancy reform are altering long-term return dynamics for investors, using Melbourne as a detailed case study.

The analysis explores the interaction between subdued capital growth, weakening investor sentiment, and tightening rental supply, alongside broader national trends reshaping the investment landscape. Melbourne's experience is particularly instructive, a market where headline data can mask significant variation at the individual asset level, and where regulatory headwinds have added meaningful complexity to investment decisions that once appeared straightforward.

For many investors, the traditional set-and-forget approach of buying a quality property, holding it long term, and letting time do the work is no longer sufficient on its own. Rising holding costs and shifting tenancy regulations are compressing net returns, while tighter rental supply is creating both risk and opportunity depending on asset quality and location.

The blog makes a compelling case for why value-add approaches, geographic diversification, and higher return thresholds are becoming essential tools for serious property investors. In a more complex regulatory environment, strategy and adaptability matter more than ever.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

Australian property investment is facing a structural shift, and regulatory change is at the centre of it. This blog examines how rising holding costs, taxation, and tenancy reform are altering long-term return dynamics for investors, using Melbourne as a detailed case study.

The analysis explores the interaction between subdued capital growth, weakening investor sentiment, and tightening rental supply, alongside broader national trends reshaping the investment landscape. Melbourne's experience is particularly instructive, a market where headline data can mask significant variation at the individual asset level, and where regulatory headwinds have added meaningful complexity to investment decisions that once appeared straightforward.

For many investors, the traditional set-and-forget approach of buying a quality property, holding it long term, and letting time do the work is no longer sufficient on its own. Rising holding costs and shifting tenancy regulations are compressing net returns, while tighter rental supply is creating both risk and opportunity depending on asset quality and location.

The blog makes a compelling case for why value-add approaches, geographic diversification, and higher return thresholds are becoming essential tools for serious property investors. In a more complex regulatory environment, strategy and adaptability matter more than ever.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19084868 Wed, 29 Apr 2026 05:00:00 +1000 1733 406 full false Q&A - The hidden cost of concentration: real scenarios, real trade-offs Q&A - The hidden cost of concentration: real scenarios, real trade-offs Through a series of real investor scenarios, this blog examines the structural challenges that emerge when wealth is heavily concentrated in property, particularly as retirement approaches. Common issues explored include liquidity constraints, CGT timing, superannuation optimisation, and the risks of relying on rental income to fund long-term retirement needs.

The discussion unpacks how strategies such as asset reallocation, well-timed disposals, and portfolio diversification can improve financial flexibility and resilience. Each scenario reveals a recurring theme: property-heavy portfolios often look strong on paper but can significantly limit options when circumstances change, or major financial decisions need to be made.

Timing matters enormously in these situations. Selling too early can trigger unnecessary tax; holding too long can lock investors into illiquid positions at precisely the moment flexibility is most valuable. Superannuation, often underutilised in property-focused strategies, emerges as a powerful tool for improving tax efficiency and long-term portfolio balance.

The broader insight is that structure and sequencing are just as important as the assets themselves. For investors approaching retirement or managing multiple competing financial goals, getting these decisions right and early enough can make a material difference to long-term outcomes.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Through a series of real investor scenarios, this blog examines the structural challenges that emerge when wealth is heavily concentrated in property, particularly as retirement approaches. Common issues explored include liquidity constraints, CGT timing, superannuation optimisation, and the risks of relying on rental income to fund long-term retirement needs.

The discussion unpacks how strategies such as asset reallocation, well-timed disposals, and portfolio diversification can improve financial flexibility and resilience. Each scenario reveals a recurring theme: property-heavy portfolios often look strong on paper but can significantly limit options when circumstances change, or major financial decisions need to be made.

Timing matters enormously in these situations. Selling too early can trigger unnecessary tax; holding too long can lock investors into illiquid positions at precisely the moment flexibility is most valuable. Superannuation, often underutilised in property-focused strategies, emerges as a powerful tool for improving tax efficiency and long-term portfolio balance.

The broader insight is that structure and sequencing are just as important as the assets themselves. For investors approaching retirement or managing multiple competing financial goals, getting these decisions right and early enough can make a material difference to long-term outcomes.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19083959 Tue, 28 Apr 2026 05:00:00 +1000 1958 full false Ep 405: How to construct an ETF portfolio Ep 405: How to construct an ETF portfolio Read Full Blog Here

There are two sensible ways to invest in ETFs: use a diversified, all-in-one fund, or build your own portfolio. Both can work. The difference comes down to control, scale, and behaviour.

In this episode, Stuart explains why simple diversified ETFs are often the right starting point, particularly for smaller balances or investors who value simplicity and discipline. But as portfolios grow, constructing your own ETF portfolio can offer meaningful advantages, particularly around valuation, diversification, and tax efficiency.

The core principle is straightforward: quality first, then price.

Stuart introduces the “Forever Test," a simple filter to identify index exposures you would be comfortable holding for decades, not just for the next cycle. From there, the focus shifts to valuation, and why the price you pay remains one of the most important drivers of long-term returns.

The episode also breaks down where returns actually come from income, earnings growth, and repricing, and how a value-aware approach to ETF selection can improve outcomes across all three.

You’ll also learn the four key ways to tilt a portfolio: geography, index methodology, company size, and emerging markets, and how these levers can be used to build a more considered and flexible portfolio without abandoning diversification.

At its core, this is not about complexity. It is about improving the odds. Because the real edge is not just what you invest in but how you structure it, and whether you can hold it long enough for compounding to do its work.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

There are two sensible ways to invest in ETFs: use a diversified, all-in-one fund, or build your own portfolio. Both can work. The difference comes down to control, scale, and behaviour.

In this episode, Stuart explains why simple diversified ETFs are often the right starting point, particularly for smaller balances or investors who value simplicity and discipline. But as portfolios grow, constructing your own ETF portfolio can offer meaningful advantages, particularly around valuation, diversification, and tax efficiency.

The core principle is straightforward: quality first, then price.

Stuart introduces the “Forever Test," a simple filter to identify index exposures you would be comfortable holding for decades, not just for the next cycle. From there, the focus shifts to valuation, and why the price you pay remains one of the most important drivers of long-term returns.

The episode also breaks down where returns actually come from income, earnings growth, and repricing, and how a value-aware approach to ETF selection can improve outcomes across all three.

You’ll also learn the four key ways to tilt a portfolio: geography, index methodology, company size, and emerging markets, and how these levers can be used to build a more considered and flexible portfolio without abandoning diversification.

At its core, this is not about complexity. It is about improving the odds. Because the real edge is not just what you invest in but how you structure it, and whether you can hold it long enough for compounding to do its work.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19024953 Wed, 22 Apr 2026 05:00:00 +1000 1848 405 full false Q&A - Real investor dilemmas: what complex portfolios reveal about strategy and risk Q&A - Real investor dilemmas: what complex portfolios reveal about strategy and risk Real investors rarely face clean, textbook decisions. Portfolios are messy, life changes, and the right move in one context can be the wrong move in another. In this episode, Stuart examines a series of real-world case studies that bring to life the strategic tensions shaping financial outcomes, from navigating leverage and asset concentration to managing liquidity through critical life-stage transitions.

Spanning scenarios across property development, retirement planning, and portfolio structuring, these case studies reveal how disciplined frameworks hold up against the complexity of actual portfolios. The decisions investors face are rarely driven by a single factor. Instead, they emerge from the interplay of competing priorities: growth versus risk, flexibility versus long-term compounding, capital preservation versus opportunity.

When should you redeploy capital? How do you strike the right balance between concentration and diversification? What are the real trade-offs between staying liquid and staying invested? And how do your answers to these questions shift as your financial life evolves?

Campbell works through each scenario with the rigour and clarity that turns complicated, real-world decisions into confident, well-reasoned strategies. If you've ever wondered how sophisticated investors actually think through complexity, this episode offers a rare and practical window into that process.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Real investors rarely face clean, textbook decisions. Portfolios are messy, life changes, and the right move in one context can be the wrong move in another. In this episode, Stuart examines a series of real-world case studies that bring to life the strategic tensions shaping financial outcomes, from navigating leverage and asset concentration to managing liquidity through critical life-stage transitions.

Spanning scenarios across property development, retirement planning, and portfolio structuring, these case studies reveal how disciplined frameworks hold up against the complexity of actual portfolios. The decisions investors face are rarely driven by a single factor. Instead, they emerge from the interplay of competing priorities: growth versus risk, flexibility versus long-term compounding, capital preservation versus opportunity.

When should you redeploy capital? How do you strike the right balance between concentration and diversification? What are the real trade-offs between staying liquid and staying invested? And how do your answers to these questions shift as your financial life evolves?

Campbell works through each scenario with the rigour and clarity that turns complicated, real-world decisions into confident, well-reasoned strategies. If you've ever wondered how sophisticated investors actually think through complexity, this episode offers a rare and practical window into that process.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-19046671 Tue, 21 Apr 2026 05:00:00 +1000 2000 full false Ep 404: How to deal with investment concentration risk Ep 404: How to deal with investment concentration risk In this episode, Stuart breaks down what concentration risk really means and why it is not just about returns, but dependence. From large shareholdings to property and business exposure, he explains how having too much tied to a single asset can increase risk unless it is properly understood in the context of your broader strategy.

Stuart introduces a practical three-step framework to assess concentration risk: evaluating future returns and opportunity cost, testing how dependent your financial plan is on the asset, and comparing the cost of selling versus staying exposed. He also challenges the common tendency to let tax considerations drive decisions, often at the expense of better long-term outcomes.

The episode explores when concentration risk is acceptable, when it should be reduced, and the different ways to do it, from immediate divestment to gradual or opportunistic trimming.

A clear, strategic discussion on how to balance risk, return, and flexibility so your portfolio works for you, not against you.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this episode, Stuart breaks down what concentration risk really means and why it is not just about returns, but dependence. From large shareholdings to property and business exposure, he explains how having too much tied to a single asset can increase risk unless it is properly understood in the context of your broader strategy.

Stuart introduces a practical three-step framework to assess concentration risk: evaluating future returns and opportunity cost, testing how dependent your financial plan is on the asset, and comparing the cost of selling versus staying exposed. He also challenges the common tendency to let tax considerations drive decisions, often at the expense of better long-term outcomes.

The episode explores when concentration risk is acceptable, when it should be reduced, and the different ways to do it, from immediate divestment to gradual or opportunistic trimming.

A clear, strategic discussion on how to balance risk, return, and flexibility so your portfolio works for you, not against you.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-18959121 Wed, 15 Apr 2026 05:00:00 +1000 1800 404 full false Q&A - Stock research, SMSF rebalancing & the debt recycling vs investment property Q&A - Stock research, SMSF rebalancing & the debt recycling vs investment property In this Q&A episode, Stuart tackles four listener questions spanning stock selection, portfolio restructuring, debt strategy, and retirement income planning.

Kyle wants to know how Stuart actually researches stocks, which tools and resources he uses, and what metrics he looks for across different investment types, from growth and defensive plays to income-focused holdings.

Jack is sitting on a mixed SMSF portfolio of around $138K and is about to contribute a further $360K. He's weighing whether to top up his existing holdings or sell everything and start fresh with a cleaner four-ETF structure. With retirement five years away, the balance between growth and income is at the front of mind.

Dave has done his own modelling comparing debt recycling into shares against buying an $800K investment property, and was surprised to find the gap smaller than expected. Stuart works through Dave's assumptions, addresses the flexibility argument, and answers his practical questions about how to correctly structure a mortgage split for debt recycling purposes.

Peter is 59, retiring this year, and holds $2M in super alongside a home, two investment properties, and a part-working spouse. His question: can they sustainably draw $120K a year while preserving the $2.4M super balance as an intergenerational wealth transfer to their sons?

A technically rich episode covering the full spectrum from picking stocks to structuring retirement.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart tackles four listener questions spanning stock selection, portfolio restructuring, debt strategy, and retirement income planning.

Kyle wants to know how Stuart actually researches stocks, which tools and resources he uses, and what metrics he looks for across different investment types, from growth and defensive plays to income-focused holdings.

Jack is sitting on a mixed SMSF portfolio of around $138K and is about to contribute a further $360K. He's weighing whether to top up his existing holdings or sell everything and start fresh with a cleaner four-ETF structure. With retirement five years away, the balance between growth and income is at the front of mind.

Dave has done his own modelling comparing debt recycling into shares against buying an $800K investment property, and was surprised to find the gap smaller than expected. Stuart works through Dave's assumptions, addresses the flexibility argument, and answers his practical questions about how to correctly structure a mortgage split for debt recycling purposes.

Peter is 59, retiring this year, and holds $2M in super alongside a home, two investment properties, and a part-working spouse. His question: can they sustainably draw $120K a year while preserving the $2.4M super balance as an intergenerational wealth transfer to their sons?

A technically rich episode covering the full spectrum from picking stocks to structuring retirement.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-18956185 Tue, 14 Apr 2026 05:00:00 +1000 1835 full false Ep 403: Lump sum share market investing: risky or rational Ep 403: Lump sum share market investing: risky or rational Read Full Blog Here

Investing a large lump sum into the share market can feel risky, but is spreading it out actually safer, or just more comfortable?

In this episode, Stuart revisits his own evolving view on lump sum investing versus dollar cost averaging. Drawing on decades of market research, he explains why lump sum investing has historically outperformed staged investing around two-thirds of the time, and why the real cost of caution is often missed opportunity, not reduced risk.

But this is not just about timing. Stuart explores how the decision should also depend on what you’re investing in, from expensive markets like the Nasdaq to more attractively valued regions globally. He also unpacks the role of cash sitting in offset accounts, and how that changes the equation when comparing guaranteed returns versus market exposure.

The episode dives into the psychology behind staged investing, including loss aversion and the fear of regret, and introduces a practical middle ground: enhanced dollar cost averaging.

Stuart also breaks down common misconceptions around debt recycling, explaining why it does not automatically accelerate home loan repayment—and when it can still make sense.

A clear, evidence-based discussion on balancing logic, emotion, and strategy when investing significant capital.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

Investing a large lump sum into the share market can feel risky, but is spreading it out actually safer, or just more comfortable?

In this episode, Stuart revisits his own evolving view on lump sum investing versus dollar cost averaging. Drawing on decades of market research, he explains why lump sum investing has historically outperformed staged investing around two-thirds of the time, and why the real cost of caution is often missed opportunity, not reduced risk.

But this is not just about timing. Stuart explores how the decision should also depend on what you’re investing in, from expensive markets like the Nasdaq to more attractively valued regions globally. He also unpacks the role of cash sitting in offset accounts, and how that changes the equation when comparing guaranteed returns versus market exposure.

The episode dives into the psychology behind staged investing, including loss aversion and the fear of regret, and introduces a practical middle ground: enhanced dollar cost averaging.

Stuart also breaks down common misconceptions around debt recycling, explaining why it does not automatically accelerate home loan repayment—and when it can still make sense.

A clear, evidence-based discussion on balancing logic, emotion, and strategy when investing significant capital.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-18951456 Wed, 08 Apr 2026 05:00:00 +1000 1489 403 full false Q&A - When good options compete: property, super & the art of the trade-off Q&A - When good options compete: property, super & the art of the trade-off In this week's Q&A episode, Stuart works through real-life scenarios where the challenge isn't finding a good option; it's choosing between several.

A Canberra couple planning a move to Queensland face a layered dilemma: how to fund a $3M home while managing a defined benefit pension, a potential inheritance, and a preference to hold quality assets. Stuart weighs selling, renting, and carrying debt into retirement, and why flexibility may matter more than certainty at this stage.

The episode also covers structuring investments for children (informal versus discretionary trusts), cash flow and loan strategies for business owners and high-income earners, and how to decide whether an underperforming property is worth holding or cutting loose.

Across every case study, the same tension surfaces: flexibility, tax efficiency, and long-term growth rarely all point in the same direction.

A practical, honest episode for anyone navigating big financial decisions where no single path is obviously right.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this week's Q&A episode, Stuart works through real-life scenarios where the challenge isn't finding a good option; it's choosing between several.

A Canberra couple planning a move to Queensland face a layered dilemma: how to fund a $3M home while managing a defined benefit pension, a potential inheritance, and a preference to hold quality assets. Stuart weighs selling, renting, and carrying debt into retirement, and why flexibility may matter more than certainty at this stage.

The episode also covers structuring investments for children (informal versus discretionary trusts), cash flow and loan strategies for business owners and high-income earners, and how to decide whether an underperforming property is worth holding or cutting loose.

Across every case study, the same tension surfaces: flexibility, tax efficiency, and long-term growth rarely all point in the same direction.

A practical, honest episode for anyone navigating big financial decisions where no single path is obviously right.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-18949770 Tue, 07 Apr 2026 05:00:00 +1000 2012 full false Ep 402: The real risk in retirement: working too long and spending too little Ep 402: The real risk in retirement: working too long and spending too little Read Full Blog Here

In this episode, Stuart explores a lesser-discussed but increasingly important risk in financial planning: not running out of money, but failing to use it when it matters most.

While much of the conversation around retirement focuses on avoiding financial shortfall, this episode flips the script. For those in a strong financial position, the greater danger may be underspending during the early, high-health years of retirement when time, energy, and freedom are at their peak.

Stuart introduces a practical framework for thinking about retirement in two phases: the active “high-health” years and the later, lower-spending phase. He explains why a successful plan often involves intentional drawdown of capital, not just preserving it, and how shifting from accumulation to decumulation is as much psychological as it is financial.

The episode also outlines how to build confidence in spending through simple guardrails dividing wealth into core, contingency, and discretionary capital—and why liquidity and asset structure play a critical role in enabling flexibility.

This is a thoughtful discussion about aligning money with life, permitting yourself to spend, and ensuring that financial success actually translates into a richer, more fulfilling retirement.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

In this episode, Stuart explores a lesser-discussed but increasingly important risk in financial planning: not running out of money, but failing to use it when it matters most.

While much of the conversation around retirement focuses on avoiding financial shortfall, this episode flips the script. For those in a strong financial position, the greater danger may be underspending during the early, high-health years of retirement when time, energy, and freedom are at their peak.

Stuart introduces a practical framework for thinking about retirement in two phases: the active “high-health” years and the later, lower-spending phase. He explains why a successful plan often involves intentional drawdown of capital, not just preserving it, and how shifting from accumulation to decumulation is as much psychological as it is financial.

The episode also outlines how to build confidence in spending through simple guardrails dividing wealth into core, contingency, and discretionary capital—and why liquidity and asset structure play a critical role in enabling flexibility.

This is a thoughtful discussion about aligning money with life, permitting yourself to spend, and ensuring that financial success actually translates into a richer, more fulfilling retirement.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-18917140 Wed, 01 Apr 2026 05:00:00 +1100 1641 402 full false Q&A - Can you retire early without taking big risks? Q&A - Can you retire early without taking big risks? In this episode, Stuart explores a powerful theme across multiple listener scenarios: is it possible to achieve early retirement without aggressive risk-taking, and what trade-offs does that require?

A couple in their late 40s shares a disciplined, “late starter” journey and a clear downsizing strategy to fund retirement within five years. Stuart unpacks whether their plan to bridge the gap to super using shares and cash flow is realistic, and the key risks that could derail it.

The conversation then broadens to include several compelling case studies: how to allocate proceeds from a property sale when nearing retirement, whether to prioritise super versus accessible investments, and how to structure a portfolio to fund the critical pre-super gap.

Stuart also tackles the psychology of risk: Should wealthier investors take on more growth exposure, or reduce risk as they approach retirement? And for those pursuing early retirement primarily through shares, what are the key considerations when navigating volatility, sequencing risk, and income needs?

This episode is a deep dive into retirement strategy, highlighting that while simple plans can be effective, success ultimately comes down to managing timing risk, maintaining flexibility, and aligning your portfolio with your real-world lifestyle goals.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this episode, Stuart explores a powerful theme across multiple listener scenarios: is it possible to achieve early retirement without aggressive risk-taking, and what trade-offs does that require?

A couple in their late 40s shares a disciplined, “late starter” journey and a clear downsizing strategy to fund retirement within five years. Stuart unpacks whether their plan to bridge the gap to super using shares and cash flow is realistic, and the key risks that could derail it.

The conversation then broadens to include several compelling case studies: how to allocate proceeds from a property sale when nearing retirement, whether to prioritise super versus accessible investments, and how to structure a portfolio to fund the critical pre-super gap.

Stuart also tackles the psychology of risk: Should wealthier investors take on more growth exposure, or reduce risk as they approach retirement? And for those pursuing early retirement primarily through shares, what are the key considerations when navigating volatility, sequencing risk, and income needs?

This episode is a deep dive into retirement strategy, highlighting that while simple plans can be effective, success ultimately comes down to managing timing risk, maintaining flexibility, and aligning your portfolio with your real-world lifestyle goals.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-18910589 Tue, 31 Mar 2026 05:00:00 +1100 2307 full false EP 401: Beyond the median: What actually drives property outperformance in Melbourne EP 401: Beyond the median: What actually drives property outperformance in Melbourne Read Full Blog Here

In this episode, Stuart challenges the idea that Melbourne property has been a poor performer by digging beneath the median data and uncovering what actually drives outperformance.

While headline figures suggest modest growth since 2010, a deeper look reveals many individual properties have significantly exceeded the average. Stuart walks through 10 real case studies across investment-grade Melbourne suburbs, highlighting the common characteristics that contributed to stronger long-term results even during relatively flat market conditions.

The discussion focuses on key drivers of outperformance, including structural scarcity, walkable lifestyle appeal, strong local demographics, and positioning within tightly held pockets. He also explains why factors like land size and heritage overlays may matter less than investors assume, and how well-executed renovations can enhance both value and buyer demand.

Importantly, Stuart emphasises that property investing is both art and science data can guide decisions, but nuance and local expertise often make the difference.

The episode reinforces a critical message: you don’t need a booming market to achieve strong results. By focusing on high-quality assets with enduring fundamentals, investors can outperform the median and harness the real power of long-term compounding.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

In this episode, Stuart challenges the idea that Melbourne property has been a poor performer by digging beneath the median data and uncovering what actually drives outperformance.

While headline figures suggest modest growth since 2010, a deeper look reveals many individual properties have significantly exceeded the average. Stuart walks through 10 real case studies across investment-grade Melbourne suburbs, highlighting the common characteristics that contributed to stronger long-term results even during relatively flat market conditions.

The discussion focuses on key drivers of outperformance, including structural scarcity, walkable lifestyle appeal, strong local demographics, and positioning within tightly held pockets. He also explains why factors like land size and heritage overlays may matter less than investors assume, and how well-executed renovations can enhance both value and buyer demand.

Importantly, Stuart emphasises that property investing is both art and science data can guide decisions, but nuance and local expertise often make the difference.

The episode reinforces a critical message: you don’t need a booming market to achieve strong results. By focusing on high-quality assets with enduring fundamentals, investors can outperform the median and harness the real power of long-term compounding.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18889442 Wed, 25 Mar 2026 05:00:00 +1100 1879 401 full false Q&A - When your dream home conflicts with your wealth plan Q&A - When your dream home conflicts with your wealth plan In this episode, Stuart unpacks a complex and relatable dilemma: what happens when your long-term wealth strategy collides with a major lifestyle goal.

A Sydney-based investor with a substantial property portfolio is aiming to retire at 60 with a high passive income. Still, a recent PPOR upgrade and plans for an $800k–$1M knockdown rebuild have put that goal under pressure. With borrowing capacity already stretched and income likely to fall, the question becomes clear: is it possible to fund the build without selling assets, or is compromise unavoidable?

Stuart explores the trade-offs between holding investment-grade property for long-term compounding versus freeing up capital to fund lifestyle decisions today. He also discusses the realities of serviceability constraints, the risks of overextending, and why sometimes even strong portfolios require strategic simplification.

The episode also touches on broader themes, including how to optimise concessional super contributions in retirement, how risk tolerance should evolve as wealth grows, and a fascinating case study involving a farmer weighing up a $11M lump sum versus long-term income from a solar lease.

A thoughtful discussion on balancing ambition, lifestyle, and financial reality when not everything can be optimised at once.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this episode, Stuart unpacks a complex and relatable dilemma: what happens when your long-term wealth strategy collides with a major lifestyle goal.

A Sydney-based investor with a substantial property portfolio is aiming to retire at 60 with a high passive income. Still, a recent PPOR upgrade and plans for an $800k–$1M knockdown rebuild have put that goal under pressure. With borrowing capacity already stretched and income likely to fall, the question becomes clear: is it possible to fund the build without selling assets, or is compromise unavoidable?

Stuart explores the trade-offs between holding investment-grade property for long-term compounding versus freeing up capital to fund lifestyle decisions today. He also discusses the realities of serviceability constraints, the risks of overextending, and why sometimes even strong portfolios require strategic simplification.

The episode also touches on broader themes, including how to optimise concessional super contributions in retirement, how risk tolerance should evolve as wealth grows, and a fascinating case study involving a farmer weighing up a $11M lump sum versus long-term income from a solar lease.

A thoughtful discussion on balancing ambition, lifestyle, and financial reality when not everything can be optimised at once.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18889429 Tue, 24 Mar 2026 05:00:00 +1100 1917 full false Ep 400: CGT discount changes: what property investors should do now Ep 400: CGT discount changes: what property investors should do now Read Full Blog Here

Register Here

In this episode, Stuart breaks down the growing political debate around capital gains tax (CGT) and what potential changes could mean for Australian property investors.

Following a Senate committee review, policymakers are now discussing the possibility of reducing the CGT discount and even limiting negative gearing to a small number of properties. Stuart examines the claims behind these proposals, including whether investor tax incentives are really responsible for rising house prices, and why housing supply remains the dominant driver of affordability.

He then walks through modelling that compares three potential CGT systems: the current 50% discount, a reduced 33% discount, and the original inflation indexation model used when CGT was first introduced. Using a 30-year property investment example, Stuart shows how reducing the discount would affect after-tax returns, internal rate of return (IRR), and the overall profit investors might expect from a leveraged property strategy.

The episode also explores how these tax changes could alter the investment landscape. If property tax advantages are reduced, borrowing to invest in shares, particularly tax-efficient global equity portfolios, may become comparatively more attractive.

Finally, Stuart discusses lessons from the UK, where investor-focused tax reforms reduced landlord participation and tightened rental supply, contributing to rising rents.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

Register Here

In this episode, Stuart breaks down the growing political debate around capital gains tax (CGT) and what potential changes could mean for Australian property investors.

Following a Senate committee review, policymakers are now discussing the possibility of reducing the CGT discount and even limiting negative gearing to a small number of properties. Stuart examines the claims behind these proposals, including whether investor tax incentives are really responsible for rising house prices, and why housing supply remains the dominant driver of affordability.

He then walks through modelling that compares three potential CGT systems: the current 50% discount, a reduced 33% discount, and the original inflation indexation model used when CGT was first introduced. Using a 30-year property investment example, Stuart shows how reducing the discount would affect after-tax returns, internal rate of return (IRR), and the overall profit investors might expect from a leveraged property strategy.

The episode also explores how these tax changes could alter the investment landscape. If property tax advantages are reduced, borrowing to invest in shares, particularly tax-efficient global equity portfolios, may become comparatively more attractive.

Finally, Stuart discusses lessons from the UK, where investor-focused tax reforms reduced landlord participation and tightened rental supply, contributing to rising rents.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18822225 Wed, 18 Mar 2026 05:00:00 +1100 2095 400 full false Q&A - Preparing for retirement: prioritising debt reduction, super contributions, and liquidity Q&A - Preparing for retirement: prioritising debt reduction, super contributions, and liquidity Register Here

In this Q&A episode, Stuart tackles three complex retirement planning scenarios involving superannuation strategy, debt reduction, and financial independence.

First, a Melbourne couple in their 50s asks whether surplus cash should be prioritised toward their large PPOR mortgage offset or contributed to their SMSF. With significant property exposure and relatively low super balances, Stuart explores how to think about the trade-off between liquidity, tax efficiency, and retirement readiness.

Next, a Sydney couple in their late 40s wonder if it’s still possible to pay off their home loan and retire within 15 years. Stuart examines whether buying an investment property for growth ahead of the Brisbane Olympics is a sensible strategy, or whether a more conservative path, boosting concessional super contributions while paying down their mortgage, may provide a stronger outcome.

Finally, a FIRE-oriented listener asks how to bridge the gap between early retirement and super preservation age when most wealth already sits inside super. Stuart discusses withdrawal rates, sequence-of-returns risk, and how to determine the appropriate level of investments required outside super.

A thoughtful episode on balancing flexibility, tax efficiency, and risk when planning for retirement across different life stages.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Register Here

In this Q&A episode, Stuart tackles three complex retirement planning scenarios involving superannuation strategy, debt reduction, and financial independence.

First, a Melbourne couple in their 50s asks whether surplus cash should be prioritised toward their large PPOR mortgage offset or contributed to their SMSF. With significant property exposure and relatively low super balances, Stuart explores how to think about the trade-off between liquidity, tax efficiency, and retirement readiness.

Next, a Sydney couple in their late 40s wonder if it’s still possible to pay off their home loan and retire within 15 years. Stuart examines whether buying an investment property for growth ahead of the Brisbane Olympics is a sensible strategy, or whether a more conservative path, boosting concessional super contributions while paying down their mortgage, may provide a stronger outcome.

Finally, a FIRE-oriented listener asks how to bridge the gap between early retirement and super preservation age when most wealth already sits inside super. Stuart discusses withdrawal rates, sequence-of-returns risk, and how to determine the appropriate level of investments required outside super.

A thoughtful episode on balancing flexibility, tax efficiency, and risk when planning for retirement across different life stages.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-18821097 Tue, 17 Mar 2026 05:00:00 +1100 2147 full false Ep 399: The Forever Test: Probably the most important concept investors must understand Ep 399: The Forever Test: Probably the most important concept investors must understand Read Full Blog Here

Register Here

In this episode, Stuart explores what he believes is the single most important principle in long-term investing: choosing assets that are most likely to deliver the highest average return over the next 20–30+ years, and ideally much longer.

He explains why successful investors focus on lifetime compounding rather than short-term market noise, and how the real power of compounding only becomes obvious after decades of patience. Stuart walks through why investment decisions should always be framed around the question: Would I be comfortable owning this asset forever?

The discussion also covers the practical levers investors can control to maximise long-term outcomes. That includes minimising fees and tax drag so more returns can compound, selecting assets where growth is driven largely by unrealised capital appreciation, and structuring ownership correctly from the beginning.

Stuart also highlights the often-overlooked behavioural side of investing. The best investments are not just those with strong fundamentals; they are the ones that require minimal time, emotional energy, and decision-making so investors can stick with them through market cycles.

Finally, he explains how this principle applies across asset classes from ETFs built around durable indexes to investment-grade property in supply-constrained locations, and why resisting short-term “shiny object” strategies is essential for building meaningful wealth over time.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

Register Here

In this episode, Stuart explores what he believes is the single most important principle in long-term investing: choosing assets that are most likely to deliver the highest average return over the next 20–30+ years, and ideally much longer.

He explains why successful investors focus on lifetime compounding rather than short-term market noise, and how the real power of compounding only becomes obvious after decades of patience. Stuart walks through why investment decisions should always be framed around the question: Would I be comfortable owning this asset forever?

The discussion also covers the practical levers investors can control to maximise long-term outcomes. That includes minimising fees and tax drag so more returns can compound, selecting assets where growth is driven largely by unrealised capital appreciation, and structuring ownership correctly from the beginning.

Stuart also highlights the often-overlooked behavioural side of investing. The best investments are not just those with strong fundamentals; they are the ones that require minimal time, emotional energy, and decision-making so investors can stick with them through market cycles.

Finally, he explains how this principle applies across asset classes from ETFs built around durable indexes to investment-grade property in supply-constrained locations, and why resisting short-term “shiny object” strategies is essential for building meaningful wealth over time.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss & Campbell Wallace Buzzsprout-18796748 Wed, 11 Mar 2026 05:00:00 +1100 2211 399 full false Q&A - Bitcoin, debt recycling & the 6-year rule: smart structuring for financial independence Q&A - Bitcoin, debt recycling & the 6-year rule: smart structuring for financial independence Register Here

In this wide-ranging Q&A episode, Stuart tackles advanced strategy questions across crypto, capital gains tax, debt recycling, super structuring, and long-term portfolio design.

First, he unpacks the tax realities of holding Bitcoin via an ETF versus direct ownership, including whether using Bitcoin as a future currency actually avoids CGT (spoiler: the tax system doesn’t work that way). He also explores custody risk and what “safest” really means when holding digital assets directly.

The episode then shifts to a couple crystallising a large capital gain and weighing up debt recycling, super contributions, and leveraging through NAB Equity Builder. Stuart breaks down the maths of deductible versus non-deductible debt, Div 293 considerations, and how to balance tax efficiency with flexibility and early financial independence.

He also revisits the six-year rule for CGT on former principal residences, clarifying eligibility, deductibility during exemption periods, valuation strategies, and whether banks need to be notified when occupancy changes.

Finally, for a defined benefit member building wealth outside super, Stuart explores portfolio diversification beyond property and how defined benefit interests interact with the $2 million transfer balance cap.

A technical but practical episode focused on sequencing, structure, and preserving optionality on the path to financial freedom.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Register Here

In this wide-ranging Q&A episode, Stuart tackles advanced strategy questions across crypto, capital gains tax, debt recycling, super structuring, and long-term portfolio design.

First, he unpacks the tax realities of holding Bitcoin via an ETF versus direct ownership, including whether using Bitcoin as a future currency actually avoids CGT (spoiler: the tax system doesn’t work that way). He also explores custody risk and what “safest” really means when holding digital assets directly.

The episode then shifts to a couple crystallising a large capital gain and weighing up debt recycling, super contributions, and leveraging through NAB Equity Builder. Stuart breaks down the maths of deductible versus non-deductible debt, Div 293 considerations, and how to balance tax efficiency with flexibility and early financial independence.

He also revisits the six-year rule for CGT on former principal residences, clarifying eligibility, deductibility during exemption periods, valuation strategies, and whether banks need to be notified when occupancy changes.

Finally, for a defined benefit member building wealth outside super, Stuart explores portfolio diversification beyond property and how defined benefit interests interact with the $2 million transfer balance cap.

A technical but practical episode focused on sequencing, structure, and preserving optionality on the path to financial freedom.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-18783711 Tue, 10 Mar 2026 05:00:00 +1100 1931 full false Ep 398: Why non-bank lenders can significantly extend your investment capacity Ep 398: Why non-bank lenders can significantly extend your investment capacity Read Full Blog Here

Register Here

The lending landscape has changed dramatically over the past two decades, and the gap between traditional banks and non-bank lenders has never been wider. In this episode, Stuart breaks down the key differences between authorised deposit-taking institutions (ADIs) regulated by the Australian Prudential Regulation Authority (APRA) and non-bank lenders regulated primarily by the Australian Securities and Investments Commission (ASIC) under the NCCP framework.

You’ll learn how banks fund loans using customer deposits protected by the Financial Claims Scheme, while non-banks typically rely on securitisation and bond markets. Stuart explains why non-banks aren’t subject to APRA’s macroprudential limits, including serviceability buffers and debt-to-income caps, and how this can translate into materially higher borrowing capacity.

He also unpacks the important nuances around offset account structures with non-banks, potential risks in a lender failure scenario, and why funding costs can shift independently of the RBA cash rate.

Most importantly, Stuart explores how using a non-bank lender strategically can accelerate wealth creation, particularly in property investing, where access to finance often matters more than marginal differences in interest rates.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

Register Here

The lending landscape has changed dramatically over the past two decades, and the gap between traditional banks and non-bank lenders has never been wider. In this episode, Stuart breaks down the key differences between authorised deposit-taking institutions (ADIs) regulated by the Australian Prudential Regulation Authority (APRA) and non-bank lenders regulated primarily by the Australian Securities and Investments Commission (ASIC) under the NCCP framework.

You’ll learn how banks fund loans using customer deposits protected by the Financial Claims Scheme, while non-banks typically rely on securitisation and bond markets. Stuart explains why non-banks aren’t subject to APRA’s macroprudential limits, including serviceability buffers and debt-to-income caps, and how this can translate into materially higher borrowing capacity.

He also unpacks the important nuances around offset account structures with non-banks, potential risks in a lender failure scenario, and why funding costs can shift independently of the RBA cash rate.

Most importantly, Stuart explores how using a non-bank lender strategically can accelerate wealth creation, particularly in property investing, where access to finance often matters more than marginal differences in interest rates.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-18771357 Wed, 04 Mar 2026 05:00:00 +1100 2095 398 full false Q&A - Buy the dream home or optimise the structure? Leveraging smartly in your late 30s and 40s Q&A - Buy the dream home or optimise the structure? Leveraging smartly in your late 30s and 40s In this strategic Q&A episode, Stuart explores two thoughtful listener scenarios centred on structure, leverage, and long-term optionality.

First, a high-earning couple in their late 30s with significant cash, shares, super, and a lowly geared investment property wrestle with how much to spend on a future family home. Should they stay underleveraged and preserve their income-producing assets, or sell shares and property to secure a higher-quality principal residence? Stuart unpacks how to think about asset quality, sequencing, tax efficiency, and the hidden opportunity cost of “putting all your eggs” into the family home.

Then, a financially literate PAYG professional navigating redundancy, career reset, and decision fatigue asks the big structural questions: When does a family trust actually make sense? Is there a trigger point for setting up an SMSF? And how do you assess whether financial advice is worth the cost? Stuart walks through the practical thresholds, behavioural considerations, and regulatory realities that should inform those decisions, particularly for single professionals rebuilding momentum.

This episode is about clarity over complexity, understanding when to introduce new structures, when to simplify, and how to align wealth-building decisions with lifestyle, risk tolerance, and long-term independence.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this strategic Q&A episode, Stuart explores two thoughtful listener scenarios centred on structure, leverage, and long-term optionality.

First, a high-earning couple in their late 30s with significant cash, shares, super, and a lowly geared investment property wrestle with how much to spend on a future family home. Should they stay underleveraged and preserve their income-producing assets, or sell shares and property to secure a higher-quality principal residence? Stuart unpacks how to think about asset quality, sequencing, tax efficiency, and the hidden opportunity cost of “putting all your eggs” into the family home.

Then, a financially literate PAYG professional navigating redundancy, career reset, and decision fatigue asks the big structural questions: When does a family trust actually make sense? Is there a trigger point for setting up an SMSF? And how do you assess whether financial advice is worth the cost? Stuart walks through the practical thresholds, behavioural considerations, and regulatory realities that should inform those decisions, particularly for single professionals rebuilding momentum.

This episode is about clarity over complexity, understanding when to introduce new structures, when to simplify, and how to align wealth-building decisions with lifestyle, risk tolerance, and long-term independence.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-18771343 Tue, 03 Mar 2026 05:00:00 +1100 2100 full false Ep 397: Australian vs International Shares: Why the 45:55 split does not add up Ep 397: Australian vs International Shares: Why the 45:55 split does not add up Read Full Blog Here

Why do most diversified Australian portfolios still allocate nearly half of their equity exposure to Australian shares, when Australia represents only around 2% of the global share market?

In this episode, we challenge the traditional 45/55 split between Australian and international equities and examine whether it truly makes sense in today’s global economy.

Campbell breaks down the most common arguments for maintaining a heavy domestic allocation, franking credits, reduced currency risk, higher dividend yields, lower volatility, and familiarity, and tests whether they justify such a significant home bias. While franking credits provide a real and measurable benefit, he explores why that benefit may be meaningful but not transformational. He also unpacks the realities of currency hedging, sector concentration, tax efficiency, and long-term compounding.

Australia’s share market is highly concentrated in banks and miners, with limited exposure to fast-growing sectors like technology. Over the past decade, global markets have outperformed, largely due to stronger earnings growth and broader diversification. Yet over 30 years, returns have been surprisingly similar, which raises a more important question: what does the future likely reward?

Campbell also discusses how the investor stage matters. Retirees seeking income may prefer higher domestic exposure. Accumulators focused on long-term after-tax compounding may benefit from greater global diversification and capital growth orientation.

This episode isn’t about abandoning Australian shares. It’s about thinking more critically about where new investment dollars should go and whether the default allocation most Australians inherit is grounded in evidence, or simply habit.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

Why do most diversified Australian portfolios still allocate nearly half of their equity exposure to Australian shares, when Australia represents only around 2% of the global share market?

In this episode, we challenge the traditional 45/55 split between Australian and international equities and examine whether it truly makes sense in today’s global economy.

Campbell breaks down the most common arguments for maintaining a heavy domestic allocation, franking credits, reduced currency risk, higher dividend yields, lower volatility, and familiarity, and tests whether they justify such a significant home bias. While franking credits provide a real and measurable benefit, he explores why that benefit may be meaningful but not transformational. He also unpacks the realities of currency hedging, sector concentration, tax efficiency, and long-term compounding.

Australia’s share market is highly concentrated in banks and miners, with limited exposure to fast-growing sectors like technology. Over the past decade, global markets have outperformed, largely due to stronger earnings growth and broader diversification. Yet over 30 years, returns have been surprisingly similar, which raises a more important question: what does the future likely reward?

Campbell also discusses how the investor stage matters. Retirees seeking income may prefer higher domestic exposure. Accumulators focused on long-term after-tax compounding may benefit from greater global diversification and capital growth orientation.

This episode isn’t about abandoning Australian shares. It’s about thinking more critically about where new investment dollars should go and whether the default allocation most Australians inherit is grounded in evidence, or simply habit.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-18714304 Wed, 25 Feb 2026 05:00:00 +1100 1637 397 full false Q&A - Structuring for smarter retirement: capital losses, property fatigue & the upgrade dilemma Q&A - Structuring for smarter retirement: capital losses, property fatigue & the upgrade dilemma In this strategy-heavy Q&A episode, Stuart tackles sophisticated portfolio questions from high-income earners and mid-life investors recalibrating their next move. A key theme is structure when (and whether) to introduce a family trust, how to think about carried-forward capital losses, and whether tax optimisation today outweighs flexibility tomorrow.

For one couple with substantial capital loss carry-forwards, the discussion explores whether to deliberately realise gains to “use them up” or stay focused on optimal long-term asset allocation. Stuart also weighs in on when advice and trust structures meaningfully add value versus when they add cost and complexity.

Another listener considers transitioning from a property-heavy portfolio into ETFs over the next decade. Stuart unpacks how to diversify intelligently, manage risk sequencing in the final accumulation years, and avoid trying to time the market with lump-sum investments.

The episode also revisits the ever-present PPOR upgrade dilemma: is taking on new debt in your mid-40s worth it if early retirement is within reach? And for younger, debt-free families, does reintroducing leverage via investment property make sense, or is simplicity underrated?

A thoughtful episode on tax, temperament, and structuring wealth for optionality, not just returns.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this strategy-heavy Q&A episode, Stuart tackles sophisticated portfolio questions from high-income earners and mid-life investors recalibrating their next move. A key theme is structure when (and whether) to introduce a family trust, how to think about carried-forward capital losses, and whether tax optimisation today outweighs flexibility tomorrow.

For one couple with substantial capital loss carry-forwards, the discussion explores whether to deliberately realise gains to “use them up” or stay focused on optimal long-term asset allocation. Stuart also weighs in on when advice and trust structures meaningfully add value versus when they add cost and complexity.

Another listener considers transitioning from a property-heavy portfolio into ETFs over the next decade. Stuart unpacks how to diversify intelligently, manage risk sequencing in the final accumulation years, and avoid trying to time the market with lump-sum investments.

The episode also revisits the ever-present PPOR upgrade dilemma: is taking on new debt in your mid-40s worth it if early retirement is within reach? And for younger, debt-free families, does reintroducing leverage via investment property make sense, or is simplicity underrated?

A thoughtful episode on tax, temperament, and structuring wealth for optionality, not just returns.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-18712050 Tue, 24 Feb 2026 05:00:00 +1100 2237 full false Ep 396: The AI trade – what can we learn from the dot-com bubble? Ep 396: The AI trade – what can we learn from the dot-com bubble? Read Full Blog Here

AI has moved from buzzword to investment obsession almost overnight. From semiconductors and data centres to software platforms and critical minerals, “the AI trade” has become shorthand for backing the companies expected to benefit most from this technological shift.

But before assuming today’s obvious winners will still look obvious in a decade, it’s worth revisiting the last time a world-changing technology captivated markets.

In this episode, Stuart unpacks what really happened during the dot-com bubble and where investors went wrong. The internet thesis was correct. The valuations were not. Many of the most celebrated companies of 2000 ultimately destroyed long-term shareholder value, despite the technology itself reshaping the world; only a handful adapted and endured.

He explores the parallels with AI today: sky-high expectations, capital flooding into perceived winners, and the growing belief that “this time is different.” We also examine why many of the true long-term winners may not yet exist, and why broad market exposure may already capture much of AI’s eventual impact.

Most importantly, Stuart explains why you don’t need to predict the winners to benefit. History suggests that trying to identify and then time the next dominant technology companies is far harder than it looks. Instead, a rules-based, diversified approach allows markets to sort winners from losers over time.

AI may well be the most significant technological advancement of our generation. But that doesn’t mean your investment strategy needs to change.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

AI has moved from buzzword to investment obsession almost overnight. From semiconductors and data centres to software platforms and critical minerals, “the AI trade” has become shorthand for backing the companies expected to benefit most from this technological shift.

But before assuming today’s obvious winners will still look obvious in a decade, it’s worth revisiting the last time a world-changing technology captivated markets.

In this episode, Stuart unpacks what really happened during the dot-com bubble and where investors went wrong. The internet thesis was correct. The valuations were not. Many of the most celebrated companies of 2000 ultimately destroyed long-term shareholder value, despite the technology itself reshaping the world; only a handful adapted and endured.

He explores the parallels with AI today: sky-high expectations, capital flooding into perceived winners, and the growing belief that “this time is different.” We also examine why many of the true long-term winners may not yet exist, and why broad market exposure may already capture much of AI’s eventual impact.

Most importantly, Stuart explains why you don’t need to predict the winners to benefit. History suggests that trying to identify and then time the next dominant technology companies is far harder than it looks. Instead, a rules-based, diversified approach allows markets to sort winners from losers over time.

AI may well be the most significant technological advancement of our generation. But that doesn’t mean your investment strategy needs to change.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-18670970 Wed, 18 Feb 2026 05:00:00 +1100 1652 396 full false Q&A - Dream Homes, big incomes & borrowing power: When to upgrade, wait, simplify Q&A - Dream Homes, big incomes & borrowing power: When to upgrade, wait, simplify In this Q&A episode, Stuart unpacks a series of high-stakes property and borrowing decisions from listeners at very different life stages, from a 24-year-old with rising income and growing capacity, to high-earning families juggling multiple investment properties and eyeing $3–4 million dream homes.

A central theme emerges: just because you can borrow more, doesn’t always mean you should. Stuart explores how to think about deploying large cash reserves, whether selling investment assets to fund a principal residence makes sense, and how to avoid eroding long-term optionality when upgrading lifestyle. He also tackles the “forever home” dilemma: buy now and risk stretching too far, or wait and risk being priced out?

For younger investors, the discussion turns to optimising borrowing capacity early, debt recycling, and the trade-offs between renovating, investing, and preserving flexibility. For established professionals approaching their 50s, Stuart examines timing decisions around relocating, selling the family home, and managing tax efficiency across structures like trusts and SMSFs.

This episode is a deep dive into strategic sequencing, how to align property decisions, leverage, and lifestyle goals without compromising long-term financial independence.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart unpacks a series of high-stakes property and borrowing decisions from listeners at very different life stages, from a 24-year-old with rising income and growing capacity, to high-earning families juggling multiple investment properties and eyeing $3–4 million dream homes.

A central theme emerges: just because you can borrow more, doesn’t always mean you should. Stuart explores how to think about deploying large cash reserves, whether selling investment assets to fund a principal residence makes sense, and how to avoid eroding long-term optionality when upgrading lifestyle. He also tackles the “forever home” dilemma: buy now and risk stretching too far, or wait and risk being priced out?

For younger investors, the discussion turns to optimising borrowing capacity early, debt recycling, and the trade-offs between renovating, investing, and preserving flexibility. For established professionals approaching their 50s, Stuart examines timing decisions around relocating, selling the family home, and managing tax efficiency across structures like trusts and SMSFs.

This episode is a deep dive into strategic sequencing, how to align property decisions, leverage, and lifestyle goals without compromising long-term financial independence.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-18670940 Tue, 17 Feb 2026 05:00:00 +1100 1862 full false Ep 395: Financial modelling for wealth: advice or sales pitch? Ep 395: Financial modelling for wealth: advice or sales pitch? Read Full Blog Here

Financial modelling has become a powerful sales tool across the wealth industry, especially in property investing. In this episode, Stuart unpacks why slick projections and long-term forecasts can look compelling, yet still lead investors in the wrong direction.

He explains a simple but critical truth: models don’t reveal the future, they reflect assumptions. And when the person building the model also benefits if you transact, those assumptions deserve serious scrutiny. He explores how optimistic growth rates, understated costs, and smooth “straight-line” returns can quietly transform modelling from a decision tool into a persuasion tool.

You’ll learn why sequence risk matters more than most projections admit, how rental and cash-flow assumptions are often overstated, and why strategies that rely on early growth are inherently fragile. Stuart also breaks down execution risk, borrowing capacity, credit policy changes, interest-only rollovers, and why many strategies fail not on paper, but in practice.

Finally, he explains how high-quality modelling should really be used: stress-tested, conservative, evidence-based, and compared against credible alternatives. If you’re presented with a model that promises certainty, this episode will help you ask the right questions and avoid buying an outcome that only works in a spreadsheet.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

Financial modelling has become a powerful sales tool across the wealth industry, especially in property investing. In this episode, Stuart unpacks why slick projections and long-term forecasts can look compelling, yet still lead investors in the wrong direction.

He explains a simple but critical truth: models don’t reveal the future, they reflect assumptions. And when the person building the model also benefits if you transact, those assumptions deserve serious scrutiny. He explores how optimistic growth rates, understated costs, and smooth “straight-line” returns can quietly transform modelling from a decision tool into a persuasion tool.

You’ll learn why sequence risk matters more than most projections admit, how rental and cash-flow assumptions are often overstated, and why strategies that rely on early growth are inherently fragile. Stuart also breaks down execution risk, borrowing capacity, credit policy changes, interest-only rollovers, and why many strategies fail not on paper, but in practice.

Finally, he explains how high-quality modelling should really be used: stress-tested, conservative, evidence-based, and compared against credible alternatives. If you’re presented with a model that promises certainty, this episode will help you ask the right questions and avoid buying an outcome that only works in a spreadsheet.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18606904 Wed, 11 Feb 2026 05:00:00 +1100 1880 395 full false Q&A - Too Late or One More Move? Navigating investing, regret, and retirement decisions in your 40s and 50s Q&A - Too Late or One More Move? Navigating investing, regret, and retirement decisions in your 40s and 50s In this in-depth Q&A episode, Stuart works through a series of listener questions that all circle the same tension: how to make confident investment decisions when time feels limited and past mistakes still loom large. The discussion spans mid- to late-career investors grappling with whether to buy “one last” investment property, double down on super, or simply focus on debt reduction and lifestyle flexibility.

Stuart unpacks the risks of short investment timeframes, especially when borrowing heavily later in life, and explains why asset quality, structure, and optionality matter far more than chasing growth to make up for lost time. Several listeners reflect on missed opportunities and underperforming assets, prompting a broader conversation about opportunity cost, regret, and how to avoid repeating the same mistakes emotionally rather than strategically.

The episode also explores realistic retirement planning for couples approaching their 50s, including whether investment property still has a role, how to weigh certainty versus upside, and when paying off the family home may be the most underrated investment of all. Across shares, property, and super, Stuart reinforces the importance of aligning strategy with temperament, cash flow resilience, and life goals, not just spreadsheets.

It’s a candid, grounding episode for anyone wondering whether they should take one more swing or finally simplify and consolidate.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this in-depth Q&A episode, Stuart works through a series of listener questions that all circle the same tension: how to make confident investment decisions when time feels limited and past mistakes still loom large. The discussion spans mid- to late-career investors grappling with whether to buy “one last” investment property, double down on super, or simply focus on debt reduction and lifestyle flexibility.

Stuart unpacks the risks of short investment timeframes, especially when borrowing heavily later in life, and explains why asset quality, structure, and optionality matter far more than chasing growth to make up for lost time. Several listeners reflect on missed opportunities and underperforming assets, prompting a broader conversation about opportunity cost, regret, and how to avoid repeating the same mistakes emotionally rather than strategically.

The episode also explores realistic retirement planning for couples approaching their 50s, including whether investment property still has a role, how to weigh certainty versus upside, and when paying off the family home may be the most underrated investment of all. Across shares, property, and super, Stuart reinforces the importance of aligning strategy with temperament, cash flow resilience, and life goals, not just spreadsheets.

It’s a candid, grounding episode for anyone wondering whether they should take one more swing or finally simplify and consolidate.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18603680 Tue, 10 Feb 2026 05:00:00 +1100 1866 full false Ep 394: Property vs Shares: The hidden incentives behind the advice Ep 394: Property vs Shares: The hidden incentives behind the advice Read Full Blog Here

Conflicts of interest are everywhere in financial services, but the most influential ones are often the least visible. In this episode, Stuart unpacks the hidden incentives that can quietly shape whether investors are steered toward property, shares, or a particular strategy, even when advice is well-intentioned.

He explains why conflicts don’t require dishonesty to matter, how incentives can shape beliefs over time, and why familiarity bias plays a much bigger role in advice than most people realise. Stuart also explores the structural differences between property and share investing, and why those differences can influence whether an adviser benefits from ongoing involvement or not.

You’ll learn how confirmation bias, personal success stories, and business models can all colour recommendations, and why certainty is not always a sign of quality advice. Most importantly, he outlines practical ways investors can recognise potential conflicts, ask better questions, and assess whether advice is genuinely balanced and fit for purpose.

If you’ve ever wondered why different advisers can look at the same situation and recommend completely different paths, this episode will help you understand what’s really going on beneath the surface.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

Conflicts of interest are everywhere in financial services, but the most influential ones are often the least visible. In this episode, Stuart unpacks the hidden incentives that can quietly shape whether investors are steered toward property, shares, or a particular strategy, even when advice is well-intentioned.

He explains why conflicts don’t require dishonesty to matter, how incentives can shape beliefs over time, and why familiarity bias plays a much bigger role in advice than most people realise. Stuart also explores the structural differences between property and share investing, and why those differences can influence whether an adviser benefits from ongoing involvement or not.

You’ll learn how confirmation bias, personal success stories, and business models can all colour recommendations, and why certainty is not always a sign of quality advice. Most importantly, he outlines practical ways investors can recognise potential conflicts, ask better questions, and assess whether advice is genuinely balanced and fit for purpose.

If you’ve ever wondered why different advisers can look at the same situation and recommend completely different paths, this episode will help you understand what’s really going on beneath the surface.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18582804 Wed, 04 Feb 2026 05:00:00 +1100 1800 394 full false Q&A - How much debt is too much? net worth, upgrading homes, late starts, and navigating big financial trade-offs Q&A - How much debt is too much? net worth, upgrading homes, late starts, and navigating big financial trade-offs In this wide-ranging Q&A episode, Stuart tackles some of the most common and confronting questions listeners face as their wealth grows and decisions become less forgiving. A central theme is how to balance aspiration with financial resilience, particularly when large debts, lifestyle upgrades, and long time horizons collide. Stuart explores how to think about net worth in a practical sense, including whether unrealised tax liabilities and transaction costs should be considered, and how to treat the family home in overall wealth calculations.

The episode also dives into the challenge of upgrading to a better home in expensive markets, unpacking when stretching for a higher-quality asset can make sense, and when it risks undermining long-term flexibility. For listeners worried they may have started too late, Stuart addresses whether meaningful progress can still be made in the final decade before retirement, and how to prioritise between paying down debt, investing, and supporting children.

Throughout the episode, Stuart emphasises clear thinking over rules of thumb, encouraging listeners to focus on asset quality, borrowing capacity as a finite resource, and the trade-offs between comfort, growth, and risk. The result is a grounded discussion aimed at helping households make confident, well-structured decisions in the face of uncertainty.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this wide-ranging Q&A episode, Stuart tackles some of the most common and confronting questions listeners face as their wealth grows and decisions become less forgiving. A central theme is how to balance aspiration with financial resilience, particularly when large debts, lifestyle upgrades, and long time horizons collide. Stuart explores how to think about net worth in a practical sense, including whether unrealised tax liabilities and transaction costs should be considered, and how to treat the family home in overall wealth calculations.

The episode also dives into the challenge of upgrading to a better home in expensive markets, unpacking when stretching for a higher-quality asset can make sense, and when it risks undermining long-term flexibility. For listeners worried they may have started too late, Stuart addresses whether meaningful progress can still be made in the final decade before retirement, and how to prioritise between paying down debt, investing, and supporting children.

Throughout the episode, Stuart emphasises clear thinking over rules of thumb, encouraging listeners to focus on asset quality, borrowing capacity as a finite resource, and the trade-offs between comfort, growth, and risk. The result is a grounded discussion aimed at helping households make confident, well-structured decisions in the face of uncertainty.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18582818 Tue, 03 Feb 2026 05:00:00 +1100 2003 full false Ep 393: Does ethical investing generate better or worse returns? Ep 393: Does ethical investing generate better or worse returns? Read Full Blog Here

In this episode, Stuart takes an evidence-based look at ethical, ESG, and sustainable investing, cutting through the marketing to focus on what really matters: risk, diversification, and expected returns. We explain the critical differences between ethical exclusions, ESG frameworks, and sustainability themes and why confusion between them often leads to poor portfolio decisions.

Stuart also explores why there’s no universal definition of “ethical”, how that affects fund construction, and why two funds with similar labels can behave very differently. You’ll hear why staying close to the parent index matters, how ethical overlays can unintentionally increase concentration risk, and where ethical investing can clash with factor, value, and geographic tilts.

Finally, he examines the real-world performance data, discusses whether ethical companies may attract more capital over time, and outlines a practical way to invest ethically without abandoning disciplined, evidence-based portfolio construction.

If you want to invest responsibly and intelligently without sacrificing long-term returns, this episode will help you think more clearly about the trade-offs involved.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

In this episode, Stuart takes an evidence-based look at ethical, ESG, and sustainable investing, cutting through the marketing to focus on what really matters: risk, diversification, and expected returns. We explain the critical differences between ethical exclusions, ESG frameworks, and sustainability themes and why confusion between them often leads to poor portfolio decisions.

Stuart also explores why there’s no universal definition of “ethical”, how that affects fund construction, and why two funds with similar labels can behave very differently. You’ll hear why staying close to the parent index matters, how ethical overlays can unintentionally increase concentration risk, and where ethical investing can clash with factor, value, and geographic tilts.

Finally, he examines the real-world performance data, discusses whether ethical companies may attract more capital over time, and outlines a practical way to invest ethically without abandoning disciplined, evidence-based portfolio construction.

If you want to invest responsibly and intelligently without sacrificing long-term returns, this episode will help you think more clearly about the trade-offs involved.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18545930 Wed, 28 Jan 2026 05:00:00 +1100 2054 393 full false Q&A - Early retirement goals, messy portfolios, and real-world trade-offs: bonds, redraws, SMSFs, and lifestyle shifts Q&A - Early retirement goals, messy portfolios, and real-world trade-offs: bonds, redraws, SMSFs, and lifestyle shifts This Q&A episode steps away from headline strategies and focuses on the decisions real households wrestle with once life, family, and fatigue start to matter as much as optimisation.

We begin with a high-income couple in their 30s trying to balance ambitious early-retirement goals with a mixed portfolio of property, an investment bond, and limited super. Stuart unpacks whether tax-deferred structures like investment bonds genuinely earn their place, how to think about adding more property when cash flow is already tight, and when selling an asset is a strategic reset rather than a failure.

From there, the episode shifts to a listener who describes themselves as the “average punter” asset-rich, tired of maximum leverage, and ready to prioritise cash flow, flexibility, and family time. Stuart walks through the risks of late-cycle property decisions, the trade-offs inside SMSFs, and how to consciously transition from accumulation to balance without sabotaging long-term outcomes.

We also tackle a technical but common mistake around redraw and refinancing. Stuart explains how the ATO’s purpose test really works, why refinancing does not magically cleanse debt, and where investors often assume they’ve fixed a tax problem when they haven’t.

Finally, the episode looks at a couple in their early 50s with a substantial property portfolio, asking the right question: not how to maximise wealth, but how to stop working. Stuart discusses sequencing asset sales, funding a future retirement home, and why buying “the next home” too early can quietly derail an otherwise strong plan.

Across all questions, the theme is consistent: good strategy is rarely about clever tricks. It’s about aligning structure, cash flow, and behaviour with the life you actually want and knowing when enough really is enough.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> This Q&A episode steps away from headline strategies and focuses on the decisions real households wrestle with once life, family, and fatigue start to matter as much as optimisation.

We begin with a high-income couple in their 30s trying to balance ambitious early-retirement goals with a mixed portfolio of property, an investment bond, and limited super. Stuart unpacks whether tax-deferred structures like investment bonds genuinely earn their place, how to think about adding more property when cash flow is already tight, and when selling an asset is a strategic reset rather than a failure.

From there, the episode shifts to a listener who describes themselves as the “average punter” asset-rich, tired of maximum leverage, and ready to prioritise cash flow, flexibility, and family time. Stuart walks through the risks of late-cycle property decisions, the trade-offs inside SMSFs, and how to consciously transition from accumulation to balance without sabotaging long-term outcomes.

We also tackle a technical but common mistake around redraw and refinancing. Stuart explains how the ATO’s purpose test really works, why refinancing does not magically cleanse debt, and where investors often assume they’ve fixed a tax problem when they haven’t.

Finally, the episode looks at a couple in their early 50s with a substantial property portfolio, asking the right question: not how to maximise wealth, but how to stop working. Stuart discusses sequencing asset sales, funding a future retirement home, and why buying “the next home” too early can quietly derail an otherwise strong plan.

Across all questions, the theme is consistent: good strategy is rarely about clever tricks. It’s about aligning structure, cash flow, and behaviour with the life you actually want and knowing when enough really is enough.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-18545907 Tue, 27 Jan 2026 05:00:00 +1100 1891 full false Ep 392 : A two-speed property market in 2026: where prices rise (and where they won’t) Ep 392 : A two-speed property market in 2026: where prices rise (and where they won’t) Read Full Blog Here

If you’re planning to buy, sell, upgrade, or invest in property in 2026, this episode cuts through the noise and focuses on what actually drives prices. Rather than forecasts or headlines, Stuart unpacks the evidence-based factors that matter most, including lending volumes, borrowing capacity, interest rate expectations, interstate migration, and where each capital city sits in its property cycle.

A clear picture is emerging of a two-speed market. More affordable properties are seeing stronger demand and faster growth, while higher-priced and premium stock is struggling to keep pace. He explores why this split is happening, how serviceability ceilings and years of ultra-low interest rates have reshaped buyer behaviour, and why sentiment is playing such a powerful role right now.

You’ll also hear how relative value and mean reversion help explain why some cities are late in their growth cycle, while others may still have years ahead of them. Stuart discusses which markets appear well-positioned for 2026, where caution is warranted, and why patience may be rewarded in areas that have underperformed for a long time.

Whether you’re an owner-occupier, first home buyer, or investor, this episode provides a clear, data-led framework to help you think more clearly about property decisions in 2026, and beyond.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

If you’re planning to buy, sell, upgrade, or invest in property in 2026, this episode cuts through the noise and focuses on what actually drives prices. Rather than forecasts or headlines, Stuart unpacks the evidence-based factors that matter most, including lending volumes, borrowing capacity, interest rate expectations, interstate migration, and where each capital city sits in its property cycle.

A clear picture is emerging of a two-speed market. More affordable properties are seeing stronger demand and faster growth, while higher-priced and premium stock is struggling to keep pace. He explores why this split is happening, how serviceability ceilings and years of ultra-low interest rates have reshaped buyer behaviour, and why sentiment is playing such a powerful role right now.

You’ll also hear how relative value and mean reversion help explain why some cities are late in their growth cycle, while others may still have years ahead of them. Stuart discusses which markets appear well-positioned for 2026, where caution is warranted, and why patience may be rewarded in areas that have underperformed for a long time.

Whether you’re an owner-occupier, first home buyer, or investor, this episode provides a clear, data-led framework to help you think more clearly about property decisions in 2026, and beyond.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18516780 Wed, 21 Jan 2026 05:00:00 +1100 1782 392 full false Q&A - Lifestyle upgrades versus financial independence, late-stage property decisions, family trust tax risks, and more Q&A - Lifestyle upgrades versus financial independence, late-stage property decisions, family trust tax risks, and more In this episode, Stuart works through a series of real-world questions that sit right at the intersection of money, lifestyle, and long-term strategy. From couples in their early 50s weighing up a beachside lifestyle purchase versus preserving liquidity for early retirement, to younger families juggling income shocks, property portfolios, and big upcoming capital events, this episode is about decision-making when the stakes are high, and the margin for error is small.

He also unpacks a major trust tax court case currently unfolding and explains, in plain English, why it matters for anyone using family trusts and bucket companies. If you’ve ever wondered whether structures you rely on could change under your feet, this discussion will help clarify the risks and what to watch next.

Along the way, he explores redundancy and retirement uncertainty, how to think about super when balances are uneven between partners, when property becomes a concentration risk, and why borrowing capacity can be both an opportunity and a trap later in life.

This episode isn’t about perfect answers. It’s about frameworks, how to balance logic versus emotion, growth versus safety, and flexibility versus commitment, so you can make decisions that still work when markets, rates, or personal circumstances change.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this episode, Stuart works through a series of real-world questions that sit right at the intersection of money, lifestyle, and long-term strategy. From couples in their early 50s weighing up a beachside lifestyle purchase versus preserving liquidity for early retirement, to younger families juggling income shocks, property portfolios, and big upcoming capital events, this episode is about decision-making when the stakes are high, and the margin for error is small.

He also unpacks a major trust tax court case currently unfolding and explains, in plain English, why it matters for anyone using family trusts and bucket companies. If you’ve ever wondered whether structures you rely on could change under your feet, this discussion will help clarify the risks and what to watch next.

Along the way, he explores redundancy and retirement uncertainty, how to think about super when balances are uneven between partners, when property becomes a concentration risk, and why borrowing capacity can be both an opportunity and a trap later in life.

This episode isn’t about perfect answers. It’s about frameworks, how to balance logic versus emotion, growth versus safety, and flexibility versus commitment, so you can make decisions that still work when markets, rates, or personal circumstances change.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18516750 Tue, 20 Jan 2026 05:00:00 +1100 2054 full false Ep 391: Wealth First Principles # 4: The hidden engine of wealth Ep 391: Wealth First Principles # 4: The hidden engine of wealth Read Full Blog Here

Most people chase investment tips; few build the engine that powers every strategy: cash flow and debt discipline. In this final Wealth First Principles instalment, we show why your savings rate beats your stock picks in the early years and how small, repeatable improvements compound into big results. You’ll learn a practical two-account banking setup that makes good behaviour automatic, how to measure spending without micromanaging, and why buffers and automation keep plans on track when life gets lumpy.

Stuart unpacks the difference between deductible and non-deductible debt, how to structure loans for flexibility, and a plain-English walkthrough of debt recycling, turning home-loan debt into productive, tax-effective investment debt over time. We also flag the behavioural traps that quietly erase progress (lifestyle creep, anchoring, false security, underestimating irregular costs) and give you a simple operating system: set a target savings rate, automate transfers and investing, preserve liquidity in offsets, review annually, and adjust as life changes.

Investments are the vehicle; cash flow is the fuel. Build a strong surplus, manage debt intentionally, and let time do the heavy lifting. Do this consistently, and you’ll outperform most investors not through luck or timing, but through process.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

Most people chase investment tips; few build the engine that powers every strategy: cash flow and debt discipline. In this final Wealth First Principles instalment, we show why your savings rate beats your stock picks in the early years and how small, repeatable improvements compound into big results. You’ll learn a practical two-account banking setup that makes good behaviour automatic, how to measure spending without micromanaging, and why buffers and automation keep plans on track when life gets lumpy.

Stuart unpacks the difference between deductible and non-deductible debt, how to structure loans for flexibility, and a plain-English walkthrough of debt recycling, turning home-loan debt into productive, tax-effective investment debt over time. We also flag the behavioural traps that quietly erase progress (lifestyle creep, anchoring, false security, underestimating irregular costs) and give you a simple operating system: set a target savings rate, automate transfers and investing, preserve liquidity in offsets, review annually, and adjust as life changes.

Investments are the vehicle; cash flow is the fuel. Build a strong surplus, manage debt intentionally, and let time do the heavy lifting. Do this consistently, and you’ll outperform most investors not through luck or timing, but through process.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18384221 Wed, 14 Jan 2026 05:00:00 +1100 1617 391 full false Q&A - Kids’ inheritance, ETF vs property, & smarter super Q&A - Kids’ inheritance, ETF vs property, & smarter super In this power-packed Q&A, Campbell dives into real scenarios many Aussies face, from managing a $50k inheritance for teens inside a trust (ETF compounding vs pooling for a property deposit) to designing a clear 10-year retirement runway for middle-income couples. 

He unpacks whether to prioritise paying off the home, maxing super, or debt recycling into ETFs; how to balance simplicity with diversification in ETF mixes; and when leverage into property actually helps rather than hurts future borrowing capacity.

You’ll also hear a plain-English guide to drawing income from super and ETFs in retirement (and tax treatment), whether to consolidate or split super funds, and what to check before rolling over to an ETF-led option. Practical frameworks, evidence over noise, and step-by-step structure so you can act with confidence.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this power-packed Q&A, Campbell dives into real scenarios many Aussies face, from managing a $50k inheritance for teens inside a trust (ETF compounding vs pooling for a property deposit) to designing a clear 10-year retirement runway for middle-income couples. 

He unpacks whether to prioritise paying off the home, maxing super, or debt recycling into ETFs; how to balance simplicity with diversification in ETF mixes; and when leverage into property actually helps rather than hurts future borrowing capacity.

You’ll also hear a plain-English guide to drawing income from super and ETFs in retirement (and tax treatment), whether to consolidate or split super funds, and what to check before rolling over to an ETF-led option. Practical frameworks, evidence over noise, and step-by-step structure so you can act with confidence.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-18493033 Tue, 13 Jan 2026 05:00:00 +1100 2030 full false Ep 390: Wealth First Principles #3: How to build a share portfolio that works Ep 390: Wealth First Principles #3: How to build a share portfolio that works Read Full Blog Here

Shares play a different role than property, and that’s their superpower. In this third Wealth First Principles instalment, we outline a simple, rules-based framework to build a resilient share portfolio that complements property: liquid, globally diversified, tax-aware, and low-cost. The evidence is clear: most active managers and stock-pickers underperform over time. Instead, capture the market return with index funds or diversified ETFs, then let discipline, not prediction, do the heavy lifting.

We unpack what truly drives returns (the Equity Risk Premium), why volatility is the “price of admission,” and how dividends and franking credits fit into a broader, global allocation. Avoid the big four mistakes: over-trading, timing, performance-chasing, and abandoning strategy in downturns. For investors seeking extra robustness, we discuss rules-based alternatives to plain market-cap indexing (equal-weight, value, quality, factor tilts), useful now given concentration risks.

Because Australia is ~1.7% of developed markets and concentrated in banks/resources, we make the case for meaningful global exposure to technology, healthcare, and leading consumer brands. Finally, a practical blueprint: set goals and allocation, pick low-cost structures (e.g., DHHF, VDAL, or factor-tilted ETFs), rebalance to a written policy, and stay the course. Do this consistently, and shares become a dependable engine alongside property for decades.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

Shares play a different role than property, and that’s their superpower. In this third Wealth First Principles instalment, we outline a simple, rules-based framework to build a resilient share portfolio that complements property: liquid, globally diversified, tax-aware, and low-cost. The evidence is clear: most active managers and stock-pickers underperform over time. Instead, capture the market return with index funds or diversified ETFs, then let discipline, not prediction, do the heavy lifting.

We unpack what truly drives returns (the Equity Risk Premium), why volatility is the “price of admission,” and how dividends and franking credits fit into a broader, global allocation. Avoid the big four mistakes: over-trading, timing, performance-chasing, and abandoning strategy in downturns. For investors seeking extra robustness, we discuss rules-based alternatives to plain market-cap indexing (equal-weight, value, quality, factor tilts), useful now given concentration risks.

Because Australia is ~1.7% of developed markets and concentrated in banks/resources, we make the case for meaningful global exposure to technology, healthcare, and leading consumer brands. Finally, a practical blueprint: set goals and allocation, pick low-cost structures (e.g., DHHF, VDAL, or factor-tilted ETFs), rebalance to a written policy, and stay the course. Do this consistently, and shares become a dependable engine alongside property for decades.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-18384151 Wed, 07 Jan 2026 05:00:00 +1100 1666 390 full false Q&A - Structure First: Using Equity, super tactics & smarter portfolio moves Q&A - Structure First: Using Equity, super tactics & smarter portfolio moves In this Q&A, Campbell tackles four big themes that trip up otherwise savvy investors: structure, borrowing capacity, super strategies, and sequencing. We start with a couple weighing up whether to extract equity from two Newcastle homes to fund an ~$800k investment purchase before kids. Campbell maps the trade-offs: why structure beats rate-shopping, the role of offsets and interest-only, how to protect borrowing capacity for a future PPOR upgrade, and when a buyer’s agent adds real value versus waiting and dollar-cost averaging into ETFs.

Next, we zoom out to a simple roadmap for late starters: build surplus first, automate investing, prioritise asset quality over activity, and use structures (trusts, only when justified) to solve clear tax or estate problems, not to manufacture returns.

On super, he explains capital-loss “harvesting” before starting pension phase, when realising gains to absorb losses makes sense, and what changes once tax on earnings drops to 0% in retirement phase. Finally, he clarifies the two-fund super tactic: separating concessional inflows from future non-concessional contributions to make recontribution strategies cleaner later, plus the frictions and admin worth considering.

The through-line: get the foundations right (cash flow, buffers, structure), buy only investment-grade assets, and sequence decisions so flexibility and optionality stay on your side.



Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A, Campbell tackles four big themes that trip up otherwise savvy investors: structure, borrowing capacity, super strategies, and sequencing. We start with a couple weighing up whether to extract equity from two Newcastle homes to fund an ~$800k investment purchase before kids. Campbell maps the trade-offs: why structure beats rate-shopping, the role of offsets and interest-only, how to protect borrowing capacity for a future PPOR upgrade, and when a buyer’s agent adds real value versus waiting and dollar-cost averaging into ETFs.

Next, we zoom out to a simple roadmap for late starters: build surplus first, automate investing, prioritise asset quality over activity, and use structures (trusts, only when justified) to solve clear tax or estate problems, not to manufacture returns.

On super, he explains capital-loss “harvesting” before starting pension phase, when realising gains to absorb losses makes sense, and what changes once tax on earnings drops to 0% in retirement phase. Finally, he clarifies the two-fund super tactic: separating concessional inflows from future non-concessional contributions to make recontribution strategies cleaner later, plus the frictions and admin worth considering.

The through-line: get the foundations right (cash flow, buffers, structure), buy only investment-grade assets, and sequence decisions so flexibility and optionality stay on your side.



Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-18453506 Tue, 06 Jan 2026 05:00:00 +1100 1900 full false Ep 389: Wealth First Principles #2: A step-by-step strategy for property investing Ep 389: Wealth First Principles #2: A step-by-step strategy for property investing Read Full Blog Here

Most investors rush into property with tactics, not strategy, and pay for it in mistakes that are costly to buy, hold, and unwind. This guide lays out a clear, repeatable framework so you can make property decisions that compound for decades. Start by defining a single objective: long-term growth drives wealth; yield only supports holding costs. Next, build the finance structure first, smart loan splits, offsets, IO vs P&I, no cross-collateralisation, so your cash flow and future capacity are protected. Then buy only investment-grade assets: scarce, land-heavy homes in established, supply-constrained suburbs with deep owner-occupier demand and long growth histories.

Model cash flow conservatively (30% expense allowance, 6.5% rates +1% stress) to avoid both over- and under-investing. Choose the city with the best 10-year prospects, then narrow to the top suburbs. Don’t trade quality for a cheaper price point. Manage risk on purpose: maintain buffers, insure properly, avoid excess leverage, preserve capacity, and diversify gradually. Review every 3–5 years for equity, borrowing power, cash-flow optimisations (including value-add), and asset quality, then scale only when foundations are strong.

Follow this process, and the property becomes a disciplined wealth engine. Ignore it, and you’ll battle avoidable costs, fragile cash flow, and disappointing results.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

Most investors rush into property with tactics, not strategy, and pay for it in mistakes that are costly to buy, hold, and unwind. This guide lays out a clear, repeatable framework so you can make property decisions that compound for decades. Start by defining a single objective: long-term growth drives wealth; yield only supports holding costs. Next, build the finance structure first, smart loan splits, offsets, IO vs P&I, no cross-collateralisation, so your cash flow and future capacity are protected. Then buy only investment-grade assets: scarce, land-heavy homes in established, supply-constrained suburbs with deep owner-occupier demand and long growth histories.

Model cash flow conservatively (30% expense allowance, 6.5% rates +1% stress) to avoid both over- and under-investing. Choose the city with the best 10-year prospects, then narrow to the top suburbs. Don’t trade quality for a cheaper price point. Manage risk on purpose: maintain buffers, insure properly, avoid excess leverage, preserve capacity, and diversify gradually. Review every 3–5 years for equity, borrowing power, cash-flow optimisations (including value-add), and asset quality, then scale only when foundations are strong.

Follow this process, and the property becomes a disciplined wealth engine. Ignore it, and you’ll battle avoidable costs, fragile cash flow, and disappointing results.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-18381503 Wed, 31 Dec 2025 05:00:00 +1100 1932 389 full false Q&A - Develop, rentvest or debt-recycle? Structures, tax & capacity Q&A - Develop, rentvest or debt-recycle? Structures, tax & capacity Stuart runs a strategy clinic on three big crossroads for investors: small-scale development, rent-vesting vs. holding the home, and using debt-recycling into shares when an investment-grade property is out of reach. He breaks down subdivision options (sell land now, build-and-sell, or build-and-hold), explains why GST applies to an “enterprise,” when the 50% CGT discount disappears, and which ownership structures (discretionary trust with bucket company vs. company) suit repeat projects. He also covers feasibility rules of thumb (contingency, funding, pre-sales risk), and whether you can pay yourself for project management.

Next, he tackles rent-investing trade-offs: freeing borrowing capacity, concentration risk, and how to preserve deductible debt with splits and offsets. For households that can’t afford an investment-grade IP today, he maps a debt-recycling pathway P&I on the home, a clean, interest-only investment split, disciplined DCA into broad ETFs, and guardrails (buffers, LVR caps, rebalancing, no margin loans).

Finally, a Sydney case study stress-tests a high-debt, high-income family: IO vs P&I sequencing, daycare-era cash-flow management, super vs. taxable investing, and planning an eventual PPOR upgrade without painting yourself into a DTI corner. Core takeaways: buy only unequivocally investment-grade assets, separate security to avoid cross-collateralisation, keep buffers, and choose the structure and debt settings that protect flexibility while compounding for 10+ years.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart runs a strategy clinic on three big crossroads for investors: small-scale development, rent-vesting vs. holding the home, and using debt-recycling into shares when an investment-grade property is out of reach. He breaks down subdivision options (sell land now, build-and-sell, or build-and-hold), explains why GST applies to an “enterprise,” when the 50% CGT discount disappears, and which ownership structures (discretionary trust with bucket company vs. company) suit repeat projects. He also covers feasibility rules of thumb (contingency, funding, pre-sales risk), and whether you can pay yourself for project management.

Next, he tackles rent-investing trade-offs: freeing borrowing capacity, concentration risk, and how to preserve deductible debt with splits and offsets. For households that can’t afford an investment-grade IP today, he maps a debt-recycling pathway P&I on the home, a clean, interest-only investment split, disciplined DCA into broad ETFs, and guardrails (buffers, LVR caps, rebalancing, no margin loans).

Finally, a Sydney case study stress-tests a high-debt, high-income family: IO vs P&I sequencing, daycare-era cash-flow management, super vs. taxable investing, and planning an eventual PPOR upgrade without painting yourself into a DTI corner. Core takeaways: buy only unequivocally investment-grade assets, separate security to avoid cross-collateralisation, keep buffers, and choose the structure and debt settings that protect flexibility while compounding for 10+ years.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-18383138 Tue, 30 Dec 2025 05:00:00 +1100 1798 full false Ep 388: Wealth First Principles #1: How wealth is actually built – The Wealth Equation Ep 388: Wealth First Principles #1: How wealth is actually built – The Wealth Equation Read Full Blog Here

Stuart opens with Wealth First Principles, explaining how real fortunes are built through three key inputs: a durable cash-flow surplus, investment efficiency (quality assets, low costs, smart tax structures, and few behavioral errors), and time (the compounding decade that does most of the work). He separates process from prediction, shows why speculation usually fails, and explains where leverage helps (sensible gearing on high-quality property with buffers) versus where it can harm (aggressive equity leverage). The mindset shift: ignore stories, automate saving, and let compounding do the heavy lifting.

Then he applies the framework to a detailed 10–15-year property plan: upgrading into an Adelaide family home later while renting it first, managing an existing regional PPOR, and deciding whether to sell or hold an inner-metro investment. Stuart stress-tests IO vs P&I for a decade, preserving deductible debt with offsets, optimal ownership splits for tax, and DTI/borrowing-capacity risks. He covers sequencing (buy vs renovate vs super), cash-flow resilience, buffers, and the realities of market timing in Adelaide. Practical guardrails include de-linking securities (avoiding cross-collateralization), structuring loans to maintain flexibility, and using evidence-based criteria to ensure each new asset is unequivocally investment-grade. The takeaway: anchor decisions to surplus, efficiency, and time, and design the debt so your future choices stay open.



Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

Stuart opens with Wealth First Principles, explaining how real fortunes are built through three key inputs: a durable cash-flow surplus, investment efficiency (quality assets, low costs, smart tax structures, and few behavioral errors), and time (the compounding decade that does most of the work). He separates process from prediction, shows why speculation usually fails, and explains where leverage helps (sensible gearing on high-quality property with buffers) versus where it can harm (aggressive equity leverage). The mindset shift: ignore stories, automate saving, and let compounding do the heavy lifting.

Then he applies the framework to a detailed 10–15-year property plan: upgrading into an Adelaide family home later while renting it first, managing an existing regional PPOR, and deciding whether to sell or hold an inner-metro investment. Stuart stress-tests IO vs P&I for a decade, preserving deductible debt with offsets, optimal ownership splits for tax, and DTI/borrowing-capacity risks. He covers sequencing (buy vs renovate vs super), cash-flow resilience, buffers, and the realities of market timing in Adelaide. Practical guardrails include de-linking securities (avoiding cross-collateralization), structuring loans to maintain flexibility, and using evidence-based criteria to ensure each new asset is unequivocally investment-grade. The takeaway: anchor decisions to surplus, efficiency, and time, and design the debt so your future choices stay open.



Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-18382479 Wed, 24 Dec 2025 05:00:00 +1100 2067 388 full false Q&A – Structure First: Super vs flexibility, smart Gearing & reno timing Q&A – Structure First: Super vs flexibility, smart Gearing & reno timing In this Q&A, Stuart unpacks two meaty, real-world dilemmas that many high-earning families face. First: should you prioritise concessional super contributions (carry-forward caps, Div 293 awareness, and long-term compounding) or keep capital outside super for flexibility and early semi-retirement? We explore building a liquid “bridge” portfolio, how to structure debt so renovation and investment loans stay deductible, and why borrowing to fund improvements paired with offset cash preserves future options.

Next, we stress-test a fast-growing portfolio: a dream PPOR on acreage, a premium Geelong West IP, and an impending second purchase in inner-west Melbourne. Stuart tackles sequencing (buy vs renovate vs super), risk concentration at 80% LVR, cash-flow resilience through cycles, and the hidden traps of cross-collateralisation. We also cover trust distributions to a high-income household, return-on-payroll for a construction business, and the checklist for green-lighting IP #2 without jeopardising the 4–5 year, $1–1.5m renovation.

The through-line: optimise for flexibility and durability, use super where it clearly wins on tax and compounding, keep enough liquidity to sleep at night, and make each new asset unquestionably investment-grade.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A, Stuart unpacks two meaty, real-world dilemmas that many high-earning families face. First: should you prioritise concessional super contributions (carry-forward caps, Div 293 awareness, and long-term compounding) or keep capital outside super for flexibility and early semi-retirement? We explore building a liquid “bridge” portfolio, how to structure debt so renovation and investment loans stay deductible, and why borrowing to fund improvements paired with offset cash preserves future options.

Next, we stress-test a fast-growing portfolio: a dream PPOR on acreage, a premium Geelong West IP, and an impending second purchase in inner-west Melbourne. Stuart tackles sequencing (buy vs renovate vs super), risk concentration at 80% LVR, cash-flow resilience through cycles, and the hidden traps of cross-collateralisation. We also cover trust distributions to a high-income household, return-on-payroll for a construction business, and the checklist for green-lighting IP #2 without jeopardising the 4–5 year, $1–1.5m renovation.

The through-line: optimise for flexibility and durability, use super where it clearly wins on tax and compounding, keep enough liquidity to sleep at night, and make each new asset unquestionably investment-grade.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-18380359 Tue, 23 Dec 2025 05:00:00 +1100 1674 full false Ep 387: Should you be an active property investor if your budget is under $1m Ep 387: Should you be an active property investor if your budget is under $1m Read Full Blog Here

In this episode, Stuart makes the case for becoming a value-add property investor when budgets are tight. Rather than stretching for a bigger dwelling in a weaker location, he argues for prioritising high land value in an A-grade area and accepting a tired home you can improve. He outlines the highest-ROI upgrades (kitchens, bathrooms, paint, flooring, efficient heating/cooling; and, where sensible, adding a third bedroom), how these boost rent and reduce vacancy, and the smart way to fund works by borrowing the renovation cost and park cash in an offset to preserve flexibility and deductions. He clarifies the distinction between repairs and improvements (immediate deduction vs. depreciation), why a depreciation schedule is important, and the role of a seasoned local buyer’s agent in avoiding costly missteps.

In the Q&A, Stuart tackles two big listener themes. First: simplifying a messy mix of assets to maximise retirement income, define required spending, prioritise tax-free super income streams, rebalance from low-yield positions to diversified income, and set a clear drawdown plan with adequate cash buffers. Second: navigating a rezoning/subdivision opportunity on a large primary residence, how main-residence CGT rules interact with a prior rental period, when profits can be taxed on revenue account, GST considerations, timing if purchasing another home, and choosing between an outright sale to a developer or a JV. He also lists the advisory bench needed: property accountant, tax lawyer, town planner, valuer, and development project manager.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

In this episode, Stuart makes the case for becoming a value-add property investor when budgets are tight. Rather than stretching for a bigger dwelling in a weaker location, he argues for prioritising high land value in an A-grade area and accepting a tired home you can improve. He outlines the highest-ROI upgrades (kitchens, bathrooms, paint, flooring, efficient heating/cooling; and, where sensible, adding a third bedroom), how these boost rent and reduce vacancy, and the smart way to fund works by borrowing the renovation cost and park cash in an offset to preserve flexibility and deductions. He clarifies the distinction between repairs and improvements (immediate deduction vs. depreciation), why a depreciation schedule is important, and the role of a seasoned local buyer’s agent in avoiding costly missteps.

In the Q&A, Stuart tackles two big listener themes. First: simplifying a messy mix of assets to maximise retirement income, define required spending, prioritise tax-free super income streams, rebalance from low-yield positions to diversified income, and set a clear drawdown plan with adequate cash buffers. Second: navigating a rezoning/subdivision opportunity on a large primary residence, how main-residence CGT rules interact with a prior rental period, when profits can be taxed on revenue account, GST considerations, timing if purchasing another home, and choosing between an outright sale to a developer or a JV. He also lists the advisory bench needed: property accountant, tax lawyer, town planner, valuer, and development project manager.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18360476 Wed, 17 Dec 2025 05:00:00 +1100 2280 387 full false Q&A – Family property moves, insurance costs & long-term cash strategy Q&A – Family property moves, insurance costs & long-term cash strategy In this Q&A episode, Stuart works through a series of nuanced listener questions that all sit at the intersection of tax, structure, and long-term decision making. While the scenarios vary, the common thread is the cost of getting the structure wrong early, and the difficulty of undoing it later.

We begin with a Melbourne couple in their 30s navigating a generous but complex proposal from ageing parents: the potential transfer of an investment property that may become a future family home. Stuart unpacks the trade-offs between gifting now versus inheriting later, the often-overlooked capital gains and stamp duty consequences, and why emotional intent does not override tax law. The discussion highlights how building, ownership, and funding decisions interact over decades, not just at the point of transfer.

Next, Stuart addresses a listener holding a legacy agreed-value income protection policy. With premiums rising sharply, the focus turns to how to think about policy add-ons, what actually protects long-term earning capacity, and why some features feel comforting but deliver little real value relative to their cost.

The episode then shifts to a detailed portfolio question from a high-income family weighing multiple competing uses of surplus cash flow: renovating the family home, upgrading, buying more property, investing in shares, or accelerating super contributions. Stuart reframes the decision away from “which option is best” and towards understanding opportunity cost, borrowing constraints, and the difference between emotional returns and financial ones. Inflation, real versus nominal returns, and the illusion of certainty in long-term projections are all addressed.

We also explore whether recycling equity from investment properties to pay down a principal place of residence actually works in practice. Stuart explains the tax mechanics, where investors commonly trip up, and why some popular strategies sound elegant in theory but are messy or counterproductive in reality.

As always, the episode is less about definitive answers and more about building a framework for making better decisions when the stakes are high, the numbers are large, and the consequences are long-lasting.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart works through a series of nuanced listener questions that all sit at the intersection of tax, structure, and long-term decision making. While the scenarios vary, the common thread is the cost of getting the structure wrong early, and the difficulty of undoing it later.

We begin with a Melbourne couple in their 30s navigating a generous but complex proposal from ageing parents: the potential transfer of an investment property that may become a future family home. Stuart unpacks the trade-offs between gifting now versus inheriting later, the often-overlooked capital gains and stamp duty consequences, and why emotional intent does not override tax law. The discussion highlights how building, ownership, and funding decisions interact over decades, not just at the point of transfer.

Next, Stuart addresses a listener holding a legacy agreed-value income protection policy. With premiums rising sharply, the focus turns to how to think about policy add-ons, what actually protects long-term earning capacity, and why some features feel comforting but deliver little real value relative to their cost.

The episode then shifts to a detailed portfolio question from a high-income family weighing multiple competing uses of surplus cash flow: renovating the family home, upgrading, buying more property, investing in shares, or accelerating super contributions. Stuart reframes the decision away from “which option is best” and towards understanding opportunity cost, borrowing constraints, and the difference between emotional returns and financial ones. Inflation, real versus nominal returns, and the illusion of certainty in long-term projections are all addressed.

We also explore whether recycling equity from investment properties to pay down a principal place of residence actually works in practice. Stuart explains the tax mechanics, where investors commonly trip up, and why some popular strategies sound elegant in theory but are messy or counterproductive in reality.

As always, the episode is less about definitive answers and more about building a framework for making better decisions when the stakes are high, the numbers are large, and the consequences are long-lasting.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-18356866 Tue, 16 Dec 2025 05:00:00 +1100 1923 full false Ep 386: Which is better: REIT or direct property? Ep 386: Which is better: REIT or direct property? Read Full Blog Here

In this episode, Stuart pulls apart the perennial “REITs vs direct property” debate and shows why they’re not substitutes but tools for different jobs. He explains how A-REITs work (structures, stapled securities, payout rules, typical 30–40% gearing) and why their liquidity and ~5% income appeal can be offset by equity-like volatility and index concentration (think one or two giants driving returns). He contrasts this with direct residential property: full control, the ability to gear up to 100%, negative-gearing benefits while working, lower observed volatility, and returns dominated by capital growth, making it a more potent long-term wealth builder when you buy true investment-grade assets. Stuart compares long-run numbers: REITs ~6–8% p.a. with higher year-to-year swings versus quality residential property targeting ~8%+ with smarter selection and sensible leverage. He then reframes their roles: REITs can be an income sleeve (especially when rates are low), while direct property is fundamentally a growth engine. In the listener Q&A, Stuart clarifies tax treatment for “informal trust” share portfolios for minors who are taxed on income, the pitfalls of penal child tax rates, and what actually triggers CGT when transferring to an adult at 18 cutting through conflicting internet guidance so parents don’t make costly ownership-structure mistakes.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

In this episode, Stuart pulls apart the perennial “REITs vs direct property” debate and shows why they’re not substitutes but tools for different jobs. He explains how A-REITs work (structures, stapled securities, payout rules, typical 30–40% gearing) and why their liquidity and ~5% income appeal can be offset by equity-like volatility and index concentration (think one or two giants driving returns). He contrasts this with direct residential property: full control, the ability to gear up to 100%, negative-gearing benefits while working, lower observed volatility, and returns dominated by capital growth, making it a more potent long-term wealth builder when you buy true investment-grade assets. Stuart compares long-run numbers: REITs ~6–8% p.a. with higher year-to-year swings versus quality residential property targeting ~8%+ with smarter selection and sensible leverage. He then reframes their roles: REITs can be an income sleeve (especially when rates are low), while direct property is fundamentally a growth engine. In the listener Q&A, Stuart clarifies tax treatment for “informal trust” share portfolios for minors who are taxed on income, the pitfalls of penal child tax rates, and what actually triggers CGT when transferring to an adult at 18 cutting through conflicting internet guidance so parents don’t make costly ownership-structure mistakes.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-18318944 Wed, 10 Dec 2025 05:00:00 +1100 2007 386 full false Q&A – Asset quality beats timing: apartments, upgrades & borrowing power Q&A – Asset quality beats timing: apartments, upgrades & borrowing power In this Q&A episode, Stuart tackles a wide mix of real-world scenarios that highlight a consistent theme: asset quality and long-term strategy matter far more than short-term market noise. We start with a listener holding an underperforming one-bedroom apartment and work through why some assets simply never recover, regardless of broader market conditions. From there, we explore whether trading two good properties for a single premium home makes sense, and why “levelling up” often outperforms spreading capital thinly. 

Stuart also digs into the trap of using precious borrowing capacity on mediocre assets (including a candid warning about Geelong’s Corio), the risks of delaying a future move to Melbourne or Sydney, and how to make high-stakes decisions when the path is unclear. Questions from younger investors round out the episode, including whether to buy early or wait for a better asset, plus a deeper discussion about gearing into shares versus property and super strategy for a couple approaching retirement. 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart tackles a wide mix of real-world scenarios that highlight a consistent theme: asset quality and long-term strategy matter far more than short-term market noise. We start with a listener holding an underperforming one-bedroom apartment and work through why some assets simply never recover, regardless of broader market conditions. From there, we explore whether trading two good properties for a single premium home makes sense, and why “levelling up” often outperforms spreading capital thinly. 

Stuart also digs into the trap of using precious borrowing capacity on mediocre assets (including a candid warning about Geelong’s Corio), the risks of delaying a future move to Melbourne or Sydney, and how to make high-stakes decisions when the path is unclear. Questions from younger investors round out the episode, including whether to buy early or wait for a better asset, plus a deeper discussion about gearing into shares versus property and super strategy for a couple approaching retirement. 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-18316536 Tue, 09 Dec 2025 05:00:00 +1100 2414 full false Ep 385: Should you fix your mortgage - If not now, when? Ep 385: Should you fix your mortgage - If not now, when? Read Full Blog Here

In this episode, Stuart tackles the perennial question: should you fix your mortgage rate—if not now, when? He reframes “normal” using the RBA’s neutral rate (roughly 3–3.5%) and shows why today’s home loan ranges of ~5–6% (P&I) and ~5.5–6.5% (IO) are sustainable. Drawing on three decades of data, he explains why fixing has left borrowers worse off about two-thirds of the time, and why flexibility (offsets, extra repayments, refinancing, equity access) usually beats chasing a small rate win. He outlines the two defensible reasons to fix when a deal is clearly in your favour (think 2021-style anomalies) and when cash-flow protection matters more than optimisation, and why “right now” doesn’t meet that bar. In the Q&A, Stuart helps “Sam” frame a conversation with his dad about super “inheritance tax” on benefits to non-dependants, covering death-benefit tax, nominations, liquidity, and practical ways to reduce the taxable component over time. He then maps a blueprint for Lauren, who’s inheriting $3 million: building a safety bucket, buying a live-in home near Melbourne, and deploying the remainder via low-cost, rules-based investing and smart ownership structures to target ~$100k p.a. income. A grounded, evidence-first guide to rates, risk, and real-world decisions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

In this episode, Stuart tackles the perennial question: should you fix your mortgage rate—if not now, when? He reframes “normal” using the RBA’s neutral rate (roughly 3–3.5%) and shows why today’s home loan ranges of ~5–6% (P&I) and ~5.5–6.5% (IO) are sustainable. Drawing on three decades of data, he explains why fixing has left borrowers worse off about two-thirds of the time, and why flexibility (offsets, extra repayments, refinancing, equity access) usually beats chasing a small rate win. He outlines the two defensible reasons to fix when a deal is clearly in your favour (think 2021-style anomalies) and when cash-flow protection matters more than optimisation, and why “right now” doesn’t meet that bar. In the Q&A, Stuart helps “Sam” frame a conversation with his dad about super “inheritance tax” on benefits to non-dependants, covering death-benefit tax, nominations, liquidity, and practical ways to reduce the taxable component over time. He then maps a blueprint for Lauren, who’s inheriting $3 million: building a safety bucket, buying a live-in home near Melbourne, and deploying the remainder via low-cost, rules-based investing and smart ownership structures to target ~$100k p.a. income. A grounded, evidence-first guide to rates, risk, and real-world decisions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18278356 Wed, 03 Dec 2025 05:00:00 +1100 2331 385 full false Q&A - Property-Heavy Portfolios, When to Stop Accumulating, and Choosing the Right Next Investment Move Q&A - Property-Heavy Portfolios, When to Stop Accumulating, and Choosing the Right Next Investment Move In this Q&A, Stuart tackles six real-world dilemmas listeners are wrestling with. He opens with superannuation, weighing Hostplus High Growth vs Indexed High Growth and why fees (0.80% vs 0.04%) and an evidence-based tilt often beat glossy promises. For a Brisbane surgeon in training, he maps a “maximum optionality” plan, prioritising cash buffers, offsets, and low-friction, rules-based ETFs while big life variables (city, role, renovation) settle. He then explores whether to buy an “investment” today that could double as a child’s first home tomorrow, and what happens when lifestyle aims conflict with investment-grade selection before unpacking Australia’s size-over-location bias, and if central townhouses may win as cities densify. On “how much is enough?”, Stuart builds a spending-led framework (run-rate needs, sequencing risk, liquidity, giving goals) for a high-spend, asset-rich couple navigating trust/super complexity. He closes with a playbook for 22-year-old beginners: first-home schemes vs waiting, when a broker helps, and simple starting moves, emergency fund, automated DCA, smart super contributions, and only adding property when the numbers and borrowing power say “go.” Clear principles, practical next steps.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A, Stuart tackles six real-world dilemmas listeners are wrestling with. He opens with superannuation, weighing Hostplus High Growth vs Indexed High Growth and why fees (0.80% vs 0.04%) and an evidence-based tilt often beat glossy promises. For a Brisbane surgeon in training, he maps a “maximum optionality” plan, prioritising cash buffers, offsets, and low-friction, rules-based ETFs while big life variables (city, role, renovation) settle. He then explores whether to buy an “investment” today that could double as a child’s first home tomorrow, and what happens when lifestyle aims conflict with investment-grade selection before unpacking Australia’s size-over-location bias, and if central townhouses may win as cities densify. On “how much is enough?”, Stuart builds a spending-led framework (run-rate needs, sequencing risk, liquidity, giving goals) for a high-spend, asset-rich couple navigating trust/super complexity. He closes with a playbook for 22-year-old beginners: first-home schemes vs waiting, when a broker helps, and simple starting moves, emergency fund, automated DCA, smart super contributions, and only adding property when the numbers and borrowing power say “go.” Clear principles, practical next steps.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18278258 Tue, 02 Dec 2025 05:00:00 +1100 2028 full false EP 384: Why relying on property sales data alone could be a big mistake! EP 384: Why relying on property sales data alone could be a big mistake! Read Full Blog Here

In this episode of Investopoly, Stuart unpacks why relying solely on property sales data, no matter how comprehensive, can lead investors astray. While compound annual growth rate (CAGR) calculations are useful, Stuart explains that interpreting them without context can result in serious misjudgements. He walks through the three core attributes of investment-grade property and focuses on why “runs on the board” must be considered alongside timing, capital improvements, zoning, and local knowledge. 

Using examples like one-off market shocks, changes to planning overlays, and shifts in buyer sentiment (e.g., towards unrenovated homes), Stuart demonstrates how seemingly strong sales data can be misleading. He also highlights how gentrification, new infrastructure, or school zoning can skew growth trends. Importantly, he emphasises that statistical reliability demands a large enough sample size, 30 to 50 sales minimum, to make meaningful conclusions. But even then, nuances like floorplan flaws or privacy issues can’t be captured in spreadsheets. Stuart’s key message: combine detailed historical data with a buyer’s agent who knows the area inside out. Without deep, local insight, investors risk overpaying or underperforming. If you’re buying, reviewing your portfolio, or relying on sales data to guide your decisions, this episode is essential listening.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

In this episode of Investopoly, Stuart unpacks why relying solely on property sales data, no matter how comprehensive, can lead investors astray. While compound annual growth rate (CAGR) calculations are useful, Stuart explains that interpreting them without context can result in serious misjudgements. He walks through the three core attributes of investment-grade property and focuses on why “runs on the board” must be considered alongside timing, capital improvements, zoning, and local knowledge. 

Using examples like one-off market shocks, changes to planning overlays, and shifts in buyer sentiment (e.g., towards unrenovated homes), Stuart demonstrates how seemingly strong sales data can be misleading. He also highlights how gentrification, new infrastructure, or school zoning can skew growth trends. Importantly, he emphasises that statistical reliability demands a large enough sample size, 30 to 50 sales minimum, to make meaningful conclusions. But even then, nuances like floorplan flaws or privacy issues can’t be captured in spreadsheets. Stuart’s key message: combine detailed historical data with a buyer’s agent who knows the area inside out. Without deep, local insight, investors risk overpaying or underperforming. If you’re buying, reviewing your portfolio, or relying on sales data to guide your decisions, this episode is essential listening.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18244434 Wed, 26 Nov 2025 05:00:00 +1100 2075 384 full false Q&A - From first-home buyers to $12m portfolios (& in between): Smart next moves at every stage of wealth Q&A - From first-home buyers to $12m portfolios (& in between): Smart next moves at every stage of wealth In this episode of Investopoly, Stuart dives into a diverse and thoughtful mix of listener questions, spanning early-stage investing to high-net-worth wealth structuring. He compares Hostplus High Growth vs Indexed High Growth super options, unpacking whether the significantly higher fees are worth it. Stuart also offers strategic guidance to a young couple earning modest incomes but saving aggressively, weighing up whether it’s the right time to jump into property via the First Home Buyer Scheme or stay the course with index fund investing. For a surgeon-in-training, Stuart breaks down whether to hold or sell two appreciating Queensland properties to position for a future $3–4M family home.

He also explores the emotional and strategic factors in choosing an investment property that might double as a home for adult children decades from now, and shares insights into Australia’s unique preference for space over proximity in housing. Finally, Stuart addresses a complex, high-asset retirement scenario—exploring "how much is enough" when spending $450K per year with significant assets in super, a family trust, and a Div 7A loan. Whether you’re just getting started or deep into retirement planning, this episode is packed with practical frameworks and nuanced perspectives for building wealth at every stage.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this episode of Investopoly, Stuart dives into a diverse and thoughtful mix of listener questions, spanning early-stage investing to high-net-worth wealth structuring. He compares Hostplus High Growth vs Indexed High Growth super options, unpacking whether the significantly higher fees are worth it. Stuart also offers strategic guidance to a young couple earning modest incomes but saving aggressively, weighing up whether it’s the right time to jump into property via the First Home Buyer Scheme or stay the course with index fund investing. For a surgeon-in-training, Stuart breaks down whether to hold or sell two appreciating Queensland properties to position for a future $3–4M family home.

He also explores the emotional and strategic factors in choosing an investment property that might double as a home for adult children decades from now, and shares insights into Australia’s unique preference for space over proximity in housing. Finally, Stuart addresses a complex, high-asset retirement scenario—exploring "how much is enough" when spending $450K per year with significant assets in super, a family trust, and a Div 7A loan. Whether you’re just getting started or deep into retirement planning, this episode is packed with practical frameworks and nuanced perspectives for building wealth at every stage.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-18244411 Tue, 25 Nov 2025 05:00:00 +1100 2022 full false Ep 383: The new and improved $3M super cap Ep 383: The new and improved $3M super cap Read Full Blog Here

In this week’s episode, Campbell tackles a variety of complex and timely superannuation and wealth-building questions, starting with the government’s revised $3 million super cap, also known as Division 296. He breaks down what’s changed, what’s stayed the same, and why the new rules are far more balanced than the initial proposal. Campbell also explores what high-balance super fund holders should consider, especially those with illiquid assets, such as property.

Listeners also asked about tough decisions around when to stretch for a principal place of residence, whether to sell shares or an investment property to fund a forever home, and how to balance flexibility with long-term security. On the topic of structures, Campbell clarifies the strategic differences between using a family trust vs a company for share investing, whether the same trust can be used for a business, and how corporate beneficiaries fit into the picture.

Whether you’re navigating changing super tax laws, planning a major home purchase, or managing wealth through trusts and structures, this episode is packed with clarity, insight, and practical advice to help you make smarter long-term decisions. Tune in to get the full breakdown and stay ahead of the curve.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

In this week’s episode, Campbell tackles a variety of complex and timely superannuation and wealth-building questions, starting with the government’s revised $3 million super cap, also known as Division 296. He breaks down what’s changed, what’s stayed the same, and why the new rules are far more balanced than the initial proposal. Campbell also explores what high-balance super fund holders should consider, especially those with illiquid assets, such as property.

Listeners also asked about tough decisions around when to stretch for a principal place of residence, whether to sell shares or an investment property to fund a forever home, and how to balance flexibility with long-term security. On the topic of structures, Campbell clarifies the strategic differences between using a family trust vs a company for share investing, whether the same trust can be used for a business, and how corporate beneficiaries fit into the picture.

Whether you’re navigating changing super tax laws, planning a major home purchase, or managing wealth through trusts and structures, this episode is packed with clarity, insight, and practical advice to help you make smarter long-term decisions. Tune in to get the full breakdown and stay ahead of the curve.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18200273 Wed, 19 Nov 2025 05:00:00 +1100 1991 383 full false Q&A - Sell, Subdivide, or Supercharge? Navigating Big Money Moves Q&A - Sell, Subdivide, or Supercharge? Navigating Big Money Moves In this week’s Q&A episode of Investopoly, Stuart tackles a wide range of insightful listener questions. Julianne kicks things off by asking for Stuart’s thoughts on the Canberra property market. Shelly seeks guidance on whether to subdivide and sell land to pay down debt or wait until retirement to reduce capital gains tax. Bay raises the question of when (or whether) it makes sense to shift from low-cost index investing to more actively managed super options, especially with international shares at record highs. Stuart shares his perspective on cost vs. value when managing larger balances in superannuation. Alex, a loyal listener, asks whether the priority should be upgrading to a forever home, investing in shares, or securing an investment property first, given income constraints and private school costs. Gavin, rebuilding after a divorce, seeks advice on how to prioritise debt reduction, property consolidation, and retirement goals. Kieran explores three creative options for upgrading his family home using equity and offset accounts. Finally, Andrew asks whether Stuart has recommendations for one-off financial advice, especially for those not ready for ongoing advice. This episode is packed with practical tips and long-term strategy thinking for listeners navigating real-life financial decisions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this week’s Q&A episode of Investopoly, Stuart tackles a wide range of insightful listener questions. Julianne kicks things off by asking for Stuart’s thoughts on the Canberra property market. Shelly seeks guidance on whether to subdivide and sell land to pay down debt or wait until retirement to reduce capital gains tax. Bay raises the question of when (or whether) it makes sense to shift from low-cost index investing to more actively managed super options, especially with international shares at record highs. Stuart shares his perspective on cost vs. value when managing larger balances in superannuation. Alex, a loyal listener, asks whether the priority should be upgrading to a forever home, investing in shares, or securing an investment property first, given income constraints and private school costs. Gavin, rebuilding after a divorce, seeks advice on how to prioritise debt reduction, property consolidation, and retirement goals. Kieran explores three creative options for upgrading his family home using equity and offset accounts. Finally, Andrew asks whether Stuart has recommendations for one-off financial advice, especially for those not ready for ongoing advice. This episode is packed with practical tips and long-term strategy thinking for listeners navigating real-life financial decisions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18199782 Tue, 18 Nov 2025 05:00:00 +1100 1963 full false Ep 382: Tax planning for PAYG employee – you need to think differently! Ep 382: Tax planning for PAYG employee – you need to think differently! Read Full Blog Here

In this episode, Stuart unpacks why PAYG employees need to approach tax planning differently and why the system is stacked against them. While company owners and investors enjoy structural advantages and deductions, employees often face limited options. Stuart explains why the two main ways for PAYG earners to reduce tax—super contributions and borrowing to invest should be used as part of a long-term wealth strategy, not short-term tax minimisation. He also explores more powerful opportunities: maximising the $2 million Transfer Balance Cap in super, using the main residence CGT exemption strategically, and investing via smart structures like family trusts. 

The second half of the episode is a Q&A where Stuart responds to listener questions about selling a high-growth property and reallocating to ETFs or super, when to use debt recycling, whether to invest surplus cash into shares or offset accounts, and how to plan for future renovations and cash flow. Whether you’re trying to make smarter tax decisions or wondering where to allocate your next $100K, Stuart’s advice focuses on managing tax across your lifetime, not just this year. If you’re a PAYG earner looking to build wealth more efficiently, this episode is packed with clarity and strategy.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

In this episode, Stuart unpacks why PAYG employees need to approach tax planning differently and why the system is stacked against them. While company owners and investors enjoy structural advantages and deductions, employees often face limited options. Stuart explains why the two main ways for PAYG earners to reduce tax—super contributions and borrowing to invest should be used as part of a long-term wealth strategy, not short-term tax minimisation. He also explores more powerful opportunities: maximising the $2 million Transfer Balance Cap in super, using the main residence CGT exemption strategically, and investing via smart structures like family trusts. 

The second half of the episode is a Q&A where Stuart responds to listener questions about selling a high-growth property and reallocating to ETFs or super, when to use debt recycling, whether to invest surplus cash into shares or offset accounts, and how to plan for future renovations and cash flow. Whether you’re trying to make smarter tax decisions or wondering where to allocate your next $100K, Stuart’s advice focuses on managing tax across your lifetime, not just this year. If you’re a PAYG earner looking to build wealth more efficiently, this episode is packed with clarity and strategy.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18159025 Wed, 12 Nov 2025 05:00:00 +1100 2159 382 full false Q&A - Securing Your Forever Home and Building Financial Freedom Q&A - Securing Your Forever Home and Building Financial Freedom >> Register here to join the session.  <<

In this Q&A episode, Stuart tackles a wide range of strategic questions from listeners navigating big financial decisions. Alex (pseudonym Ace) asks whether it’s smarter to upgrade to a forever home now, invest in shares and super, or pursue an investment property first. Stuart explains why securing your long-term home earlier often pays off. Gavin, recently divorced, wants to know how best to prioritise home upgrades, property consolidation, and super with limited income and family demands. Kieran outlines three ways to fund a new home using equity, cross-collateralisation, or selling. Stuart weighs in on the pros, risks, and tax implications of each option. An avid listener aiming to retire early asks whether managing $900K via a company structure is optimal or if there are better strategies given his and his wife’s high incomes. Across these cases, Stuart highlights the importance of ownership structure, long-term planning, and aligning financial moves with lifestyle goals, especially around super, family planning, and tax strategy. Whether you're early in your investing journey or already managing millions, this episode delivers practical, thoughtful advice on how to make smart, forward-thinking decisions across property, super, and investment strategy.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> >> Register here to join the session.  <<

In this Q&A episode, Stuart tackles a wide range of strategic questions from listeners navigating big financial decisions. Alex (pseudonym Ace) asks whether it’s smarter to upgrade to a forever home now, invest in shares and super, or pursue an investment property first. Stuart explains why securing your long-term home earlier often pays off. Gavin, recently divorced, wants to know how best to prioritise home upgrades, property consolidation, and super with limited income and family demands. Kieran outlines three ways to fund a new home using equity, cross-collateralisation, or selling. Stuart weighs in on the pros, risks, and tax implications of each option. An avid listener aiming to retire early asks whether managing $900K via a company structure is optimal or if there are better strategies given his and his wife’s high incomes. Across these cases, Stuart highlights the importance of ownership structure, long-term planning, and aligning financial moves with lifestyle goals, especially around super, family planning, and tax strategy. Whether you're early in your investing journey or already managing millions, this episode delivers practical, thoughtful advice on how to make smart, forward-thinking decisions across property, super, and investment strategy.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18159250 Tue, 11 Nov 2025 05:00:00 +1100 1839 full false Ep 381: Warning- Property investors should ignore the last 5 years of data Ep 381: Warning- Property investors should ignore the last 5 years of data Read Full Blog Here

In this episode, Stuart explains why property investors need to be cautious when relying on the last five years of price data. He outlines how this period has been shaped by a series of unique, disruptive events: surging construction costs, extreme interest rate movements, volatile migration patterns, and the rise of working from home. While these factors have significantly impacted prices, they don’t reflect long-term fundamentals and may not be repeated.

Stuart explores how elevated construction costs have distorted growth in certain markets, particularly where building value outweighs land value. He also explains how changing borrowing capacity and RBA interventions have shifted investor behaviour and redirected capital to more affordable regions, trends that may not be permanent. With overseas migration and remote work patterns still evolving, Stuart argues that recent market movements are not a reliable indicator of future performance.

He also warns against the explosion of data-driven buyers’ agents who lean heavily on short-term trends, questioning the quality and applicability of much of the property data being used. For investors looking to make smart, evidence-based decisions, Stuart makes the case for focusing on 20+ years of data and understanding the fundamentals that truly drive long-term growth. A timely, clear-eyed episode.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

In this episode, Stuart explains why property investors need to be cautious when relying on the last five years of price data. He outlines how this period has been shaped by a series of unique, disruptive events: surging construction costs, extreme interest rate movements, volatile migration patterns, and the rise of working from home. While these factors have significantly impacted prices, they don’t reflect long-term fundamentals and may not be repeated.

Stuart explores how elevated construction costs have distorted growth in certain markets, particularly where building value outweighs land value. He also explains how changing borrowing capacity and RBA interventions have shifted investor behaviour and redirected capital to more affordable regions, trends that may not be permanent. With overseas migration and remote work patterns still evolving, Stuart argues that recent market movements are not a reliable indicator of future performance.

He also warns against the explosion of data-driven buyers’ agents who lean heavily on short-term trends, questioning the quality and applicability of much of the property data being used. For investors looking to make smart, evidence-based decisions, Stuart makes the case for focusing on 20+ years of data and understanding the fundamentals that truly drive long-term growth. A timely, clear-eyed episode.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18106426 Wed, 05 Nov 2025 05:00:00 +1100 1814 381 full false Q&A - Rethinking retirement, property opportunities, and financial structures Q&A - Rethinking retirement, property opportunities, and financial structures In this episode, Campbell addresses a wide range of thoughtful listener questions covering retirement planning, property strategy, superannuation structuring, and the real cost of working with brokers. “Fred” runs through a detailed retirement plan with over $5M in super, trust, and cash assets and seeks a sanity check on his 3.25% spending rate and family gifting strategy. Campbell provides perspective on sequence risk, cash buffers, and longevity planning. Kayt asks whether using a financial advisor is worth the cost compared to a low-fee Vanguard income stream and raises concerns around fees and trust. Campbell explores the pros, cons, and value of advice.

Dan challenges whether mortgage brokers truly offer better value than DIY research, especially for borrowers with simple needs. Campbell explains when brokers add value and the industry incentives shaping their recommendations. Lyn asks how to execute the recontribution strategy across pension accounts, while Paul raises a practical question about simple family trust arrangements. Finally, Brad, a developer, wonders whether investor resales currently priced below replacement cost offer an opportunity or are a value trap.

Whether you're planning a long retirement, rethinking property strategy, or weighing adviser fees, this episode delivers clear, balanced answers to help you make more confident financial decisions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this episode, Campbell addresses a wide range of thoughtful listener questions covering retirement planning, property strategy, superannuation structuring, and the real cost of working with brokers. “Fred” runs through a detailed retirement plan with over $5M in super, trust, and cash assets and seeks a sanity check on his 3.25% spending rate and family gifting strategy. Campbell provides perspective on sequence risk, cash buffers, and longevity planning. Kayt asks whether using a financial advisor is worth the cost compared to a low-fee Vanguard income stream and raises concerns around fees and trust. Campbell explores the pros, cons, and value of advice.

Dan challenges whether mortgage brokers truly offer better value than DIY research, especially for borrowers with simple needs. Campbell explains when brokers add value and the industry incentives shaping their recommendations. Lyn asks how to execute the recontribution strategy across pension accounts, while Paul raises a practical question about simple family trust arrangements. Finally, Brad, a developer, wonders whether investor resales currently priced below replacement cost offer an opportunity or are a value trap.

Whether you're planning a long retirement, rethinking property strategy, or weighing adviser fees, this episode delivers clear, balanced answers to help you make more confident financial decisions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18106374 Tue, 04 Nov 2025 05:00:00 +1100 1964 full false Ep 380: An evidence-based approach to constructing an investment portfolio Ep 380: An evidence-based approach to constructing an investment portfolio Read Full Blog Here

In this episode, Stuart unpacks what it really means to construct an evidence-based investment portfolio and why portfolio construction is arguably the most important decision an investor can make. He explains how diversification across shares and property helps smooth returns, not because it eliminates volatility, but because it helps investors stay the course and adapt to life’s inevitable curveballs.

Stuart takes a deep dive into factor-based investing, highlighting the importance of selecting investment strategies grounded in fundamentals like Value and Quality, while being wary of overhyped strategies such as Momentum, which often falter when trading costs and taxes are factored in. He discusses how to build an "all-weather" share portfolio, the importance of starting valuations, and the role listed property and infrastructure can play in balancing growth and defensiveness.

He also explores the role of liquidity, why he remains cautious about unlisted investments, and how residential property, with its low correlation to shares, can enhance diversification. Finally, Stuart outlines his preferred approach to asset allocation, blending direct property and diversified shares using rules-based strategies, all while staying agnostic to asset class labels and focusing purely on what best serves long-term financial goals. A must-listen for serious investors looking to sharpen their portfolio strategy.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

In this episode, Stuart unpacks what it really means to construct an evidence-based investment portfolio and why portfolio construction is arguably the most important decision an investor can make. He explains how diversification across shares and property helps smooth returns, not because it eliminates volatility, but because it helps investors stay the course and adapt to life’s inevitable curveballs.

Stuart takes a deep dive into factor-based investing, highlighting the importance of selecting investment strategies grounded in fundamentals like Value and Quality, while being wary of overhyped strategies such as Momentum, which often falter when trading costs and taxes are factored in. He discusses how to build an "all-weather" share portfolio, the importance of starting valuations, and the role listed property and infrastructure can play in balancing growth and defensiveness.

He also explores the role of liquidity, why he remains cautious about unlisted investments, and how residential property, with its low correlation to shares, can enhance diversification. Finally, Stuart outlines his preferred approach to asset allocation, blending direct property and diversified shares using rules-based strategies, all while staying agnostic to asset class labels and focusing purely on what best serves long-term financial goals. A must-listen for serious investors looking to sharpen their portfolio strategy.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18060068 Wed, 29 Oct 2025 05:00:00 +1100 2021 380 full false Q&A - Navigating Property, Super, and Tax: Smart Moves for the Next Stage of Wealth Q&A - Navigating Property, Super, and Tax: Smart Moves for the Next Stage of Wealth In this episode, Stuart answers a wide range of listener questions on property strategy, superannuation, and capital gains tax, each offering a unique perspective on wealth management across different life stages. Jim and his wife are considering whether to upgrade their home now, invest in ETFs, or continue expanding their portfolio through a trust structure. Stuart weighs the options and long-term implications of each. Kayt asks whether a low-fee option like a Vanguard retirement product is a better choice than working with a financial adviser, prompting a discussion on the value (and cost) of advice in retirement.

Andrew raises questions about potential changes to the CGT discount and negative gearing rules, asking whether indexation or rising yields could offset these changes. Stuart also reviews Andrew’s calculations around CGT savings when selling assets with no other income. Penny considers moving investment properties out of her SMSF to a family trust to manage exposure to the proposed $3 million super tax and unrealised gains regime. Stuart unpacks the trade-offs, including CGT and stamp duty.

Whether you're starting to build wealth or managing a significant portfolio in retirement, this episode delivers clear, grounded insights to help you navigate policy changes and strategic decisions with confidence.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this episode, Stuart answers a wide range of listener questions on property strategy, superannuation, and capital gains tax, each offering a unique perspective on wealth management across different life stages. Jim and his wife are considering whether to upgrade their home now, invest in ETFs, or continue expanding their portfolio through a trust structure. Stuart weighs the options and long-term implications of each. Kayt asks whether a low-fee option like a Vanguard retirement product is a better choice than working with a financial adviser, prompting a discussion on the value (and cost) of advice in retirement.

Andrew raises questions about potential changes to the CGT discount and negative gearing rules, asking whether indexation or rising yields could offset these changes. Stuart also reviews Andrew’s calculations around CGT savings when selling assets with no other income. Penny considers moving investment properties out of her SMSF to a family trust to manage exposure to the proposed $3 million super tax and unrealised gains regime. Stuart unpacks the trade-offs, including CGT and stamp duty.

Whether you're starting to build wealth or managing a significant portfolio in retirement, this episode delivers clear, grounded insights to help you navigate policy changes and strategic decisions with confidence.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18060099 Tue, 28 Oct 2025 05:00:00 +1100 1928 full false Ep 379: Momentum investing- Useful when investing in property or shares Ep 379: Momentum investing- Useful when investing in property or shares Read Full Blog Here

In this episode, Stuart takes a deep dive into momentum investing, what it is, how it works in theory, and whether it holds up in practice when applied to shares and property. Momentum is a factor strategy that involves buying assets that have performed strongly over the past 6–12 months. While it sounds compelling, Stuart explains why real-world results often fall short due to high trading costs, tax drag, and dilution when trying to reduce turnover. He also shares why the most popular momentum ETFs have consistently underperformed broad market indexes over time, despite short-term outperformance.

Shifting to property, Stuart questions whether momentum has any place in property investing, especially when social media is filled with spruikers showcasing booming suburbs and recent wins. He explains why transaction costs, timing risks, and the long lead times in property make momentum strategies largely ineffective, and why long-term capital growth, underpinned by strong fundamentals, remains the key to building wealth through real estate.

Whether you're intrigued by share market factors or wondering when to jump into the property cycle, this episode unpacks the myths of momentum investing and reminds you that successful investing is about strategy, not chasing yesterday’s winners.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

In this episode, Stuart takes a deep dive into momentum investing, what it is, how it works in theory, and whether it holds up in practice when applied to shares and property. Momentum is a factor strategy that involves buying assets that have performed strongly over the past 6–12 months. While it sounds compelling, Stuart explains why real-world results often fall short due to high trading costs, tax drag, and dilution when trying to reduce turnover. He also shares why the most popular momentum ETFs have consistently underperformed broad market indexes over time, despite short-term outperformance.

Shifting to property, Stuart questions whether momentum has any place in property investing, especially when social media is filled with spruikers showcasing booming suburbs and recent wins. He explains why transaction costs, timing risks, and the long lead times in property make momentum strategies largely ineffective, and why long-term capital growth, underpinned by strong fundamentals, remains the key to building wealth through real estate.

Whether you're intrigued by share market factors or wondering when to jump into the property cycle, this episode unpacks the myths of momentum investing and reminds you that successful investing is about strategy, not chasing yesterday’s winners.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-18017267 Wed, 22 Oct 2025 05:00:00 +1100 1919 379 full false Q&A - Property vs shares, selling decisions, and smart retirement strategies Q&A - Property vs shares, selling decisions, and smart retirement strategies In this episode, Stuart tackles one of the most frequently asked investing questions: property vs. shares, but through a sharper lens: how leverage, gearing levels, and borrowing constraints impact the comparison. Sam asks at what point property stops outperforming shares if you can't borrow 100% of the purchase price. Stuart explains the inflection points and when ETFs might offer a better return for your capital. Bob, planning for retirement abroad, outlines a sophisticated strategy involving property sales, prepaying interest, super catch-up contributions, and CGT exemptions using the 6-year rule. Stuart dissects the layers of complexity and tax implications.

Vanessa considers selling a 1-bed unit that’s underperforming to boost super contributions and weighs the pros and cons of holding vs. exiting. Julia, with a substantial share portfolio and large cash reserves, is re-evaluating her DCA strategy due to potential burnout and health concerns. Stuart offers guidance on cash deployment and balancing liquidity with long-term planning.

Finally, Steve shares several options for managing two trust-held units and $170K in savings, including paying down debt, expanding the portfolio, or diversifying into ETFs. Stuart helps him weigh risk, return, and timing. This episode is packed with practical insights for anyone fine-tuning their next move.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this episode, Stuart tackles one of the most frequently asked investing questions: property vs. shares, but through a sharper lens: how leverage, gearing levels, and borrowing constraints impact the comparison. Sam asks at what point property stops outperforming shares if you can't borrow 100% of the purchase price. Stuart explains the inflection points and when ETFs might offer a better return for your capital. Bob, planning for retirement abroad, outlines a sophisticated strategy involving property sales, prepaying interest, super catch-up contributions, and CGT exemptions using the 6-year rule. Stuart dissects the layers of complexity and tax implications.

Vanessa considers selling a 1-bed unit that’s underperforming to boost super contributions and weighs the pros and cons of holding vs. exiting. Julia, with a substantial share portfolio and large cash reserves, is re-evaluating her DCA strategy due to potential burnout and health concerns. Stuart offers guidance on cash deployment and balancing liquidity with long-term planning.

Finally, Steve shares several options for managing two trust-held units and $170K in savings, including paying down debt, expanding the portfolio, or diversifying into ETFs. Stuart helps him weigh risk, return, and timing. This episode is packed with practical insights for anyone fine-tuning their next move.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17986132 Tue, 21 Oct 2025 05:00:00 +1100 1748 full false Ep 378: The one, evidence-based factor that predicts property price movements Ep 378: The one, evidence-based factor that predicts property price movements Read Full Blog Here

In this data-driven episode, Stuart explores what really predicts property price movements, beyond the headlines about population growth. Using lending volume data across major Australian cities, Stuart shows why borrowing activity is one of the most reliable indicators of short-term property price trends. He compares trends in Sydney, Melbourne, Brisbane, Adelaide, and Perth, highlighting how lending volumes often correlate far more strongly with price growth than population alone. Stuart also examines investor participation across the states, noting that Melbourne and Perth may offer compelling opportunities based on current lending patterns and market dynamics.

He then answers a listener's question from Steve, who is managing two investment properties in a trust for his daughters and is considering the best way to use $170K in savings. Should he pay down debt, buy a third property, or invest in ETFs for long-term diversification? Stuart discusses the pros and cons of each path, balancing risk tolerance, timing, and goals.

Whether you're watching the market closely or managing a multi-property portfolio, this episode unpacks how lending drives price cycles and offers practical frameworks to help you decide what to do next. A must-listen for property investors looking for clarity and a smarter edge.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

In this data-driven episode, Stuart explores what really predicts property price movements, beyond the headlines about population growth. Using lending volume data across major Australian cities, Stuart shows why borrowing activity is one of the most reliable indicators of short-term property price trends. He compares trends in Sydney, Melbourne, Brisbane, Adelaide, and Perth, highlighting how lending volumes often correlate far more strongly with price growth than population alone. Stuart also examines investor participation across the states, noting that Melbourne and Perth may offer compelling opportunities based on current lending patterns and market dynamics.

He then answers a listener's question from Steve, who is managing two investment properties in a trust for his daughters and is considering the best way to use $170K in savings. Should he pay down debt, buy a third property, or invest in ETFs for long-term diversification? Stuart discusses the pros and cons of each path, balancing risk tolerance, timing, and goals.

Whether you're watching the market closely or managing a multi-property portfolio, this episode unpacks how lending drives price cycles and offers practical frameworks to help you decide what to do next. A must-listen for property investors looking for clarity and a smarter edge.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17972915 Wed, 15 Oct 2025 05:00:00 +1100 2042 378 full false Q&A - Property swaps, school zones, early retirement plans, and when to let compounding do the work Q&A - Property swaps, school zones, early retirement plans, and when to let compounding do the work In this packed Q&A episode, Stuart answers listener questions from all stages of life and wealth, covering everything from young families building momentum to seasoned investors managing multi-million-dollar portfolios. Amit asks whether to sell a newly built property in Beveridge and reinvest closer to Melbourne, like Frankston, for long-term compounding, and weighs up whether to redevelop or sell his current home before buying into a better school zone. Ron from Brisbane wants to know if he and his wife can retire early by splitting time between Manila and Australia, and whether they should prioritise debt reduction, super contributions, or property investment. Zach, a new dad in his 30s, asks where to focus over the next decade: offset savings, shares, or prepping for property, especially with a trading trust in the mix.

Blair shares his proposed ETF allocation inside his SMSF and seeks Stuart’s thoughts on tilting toward value and emerging markets. Anthony, a high-end developer with a strong property portfolio, questions whether to prioritise super contributions now or allow compounding to work its magic with his standout A-grade asset. As always, Stuart offers grounded, evidence-based insights that help each listener weigh lifestyle, tax, and long-term goals. A must-listen for clarity at any stage of your financial journey.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this packed Q&A episode, Stuart answers listener questions from all stages of life and wealth, covering everything from young families building momentum to seasoned investors managing multi-million-dollar portfolios. Amit asks whether to sell a newly built property in Beveridge and reinvest closer to Melbourne, like Frankston, for long-term compounding, and weighs up whether to redevelop or sell his current home before buying into a better school zone. Ron from Brisbane wants to know if he and his wife can retire early by splitting time between Manila and Australia, and whether they should prioritise debt reduction, super contributions, or property investment. Zach, a new dad in his 30s, asks where to focus over the next decade: offset savings, shares, or prepping for property, especially with a trading trust in the mix.

Blair shares his proposed ETF allocation inside his SMSF and seeks Stuart’s thoughts on tilting toward value and emerging markets. Anthony, a high-end developer with a strong property portfolio, questions whether to prioritise super contributions now or allow compounding to work its magic with his standout A-grade asset. As always, Stuart offers grounded, evidence-based insights that help each listener weigh lifestyle, tax, and long-term goals. A must-listen for clarity at any stage of your financial journey.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17966820 Tue, 14 Oct 2025 05:00:00 +1100 1738 full false Ep 377: Are wholesale investors offered better investment options?  Ep 377: Are wholesale investors offered better investment options?  Read Full Blog Here

In this episode, Stuart examines whether being a wholesale investor truly unlocks better investment opportunities or is merely a more sophisticated marketing pitch. He explains what qualifies someone as a wholesale investor under Australian law, what protections are lost when switching from retail, and whether exclusive access to private equity, hedge funds, and unlisted property trusts is truly worth the trade-off. Stuart also breaks down the core risks of wholesale investments, like illiquidity, high fees, and lack of transparency. Why he believes these options should remain on the edges of a portfolio, not at the core.

Stuart also answers a follow-up question from Blair about ETF selection in an SMSF. Blair shares his proposed allocation of VAS, VGS, VGE, and VVLU, designed to balance value exposure, emerging markets, and reduced reliance on expensive US growth stocks. Stuart offers a perspective on how to think about ETF construction in a core-satellite portfolio and the role diversification plays over a 20-year investment horizon.

This episode is essential listening for anyone wondering if “exclusive” really means “better” in the investment world, and how to stay grounded in a disciplined, evidence-based approach that prioritises simplicity, cost-efficiency, and long-term compounding.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

In this episode, Stuart examines whether being a wholesale investor truly unlocks better investment opportunities or is merely a more sophisticated marketing pitch. He explains what qualifies someone as a wholesale investor under Australian law, what protections are lost when switching from retail, and whether exclusive access to private equity, hedge funds, and unlisted property trusts is truly worth the trade-off. Stuart also breaks down the core risks of wholesale investments, like illiquidity, high fees, and lack of transparency. Why he believes these options should remain on the edges of a portfolio, not at the core.

Stuart also answers a follow-up question from Blair about ETF selection in an SMSF. Blair shares his proposed allocation of VAS, VGS, VGE, and VVLU, designed to balance value exposure, emerging markets, and reduced reliance on expensive US growth stocks. Stuart offers a perspective on how to think about ETF construction in a core-satellite portfolio and the role diversification plays over a 20-year investment horizon.

This episode is essential listening for anyone wondering if “exclusive” really means “better” in the investment world, and how to stay grounded in a disciplined, evidence-based approach that prioritises simplicity, cost-efficiency, and long-term compounding.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17943766 Wed, 08 Oct 2025 05:00:00 +1100 1797 377 full false Q&A - Private banking, commercial property concerns, when to sell property Q&A - Private banking, commercial property concerns, when to sell property In this Q&A-packed episode, Stuart tackles a broad range of listener questions covering everything from starting in your 30s to optimising a $5 million property portfolio. Zach, a new parent with a $1M home and solid income, asks what to focus on over the next 5–10 years and whether topping up the offset or investing in shares makes more sense. Stuart also addresses whether Zach's discretionary trust setup is a smart long-term move. Rob asks about private banking services, what they offer, and when they’re worth it. Michael (pseudonym) walks through his detailed $5.3M property portfolio and plans to consolidate into commercial assets, asking if it’s the best way to maximise income while preserving lifestyle and flexibility.

Lucy wants guidance on timing the sale of investment properties to maximise superannuation and whether their family trust is the right vehicle for ETF investments. Blair revisits ETF portfolio structure and seeks feedback on a value-tilted SMSF strategy. Courtney and her partner, with kids on the horizon, ask where to direct their growing surplus. Finally, Stuart answers the timeless question: “If you had to start again at 18, what would you do?” This episode is packed with timeless insights for every life stage and wealth level.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A-packed episode, Stuart tackles a broad range of listener questions covering everything from starting in your 30s to optimising a $5 million property portfolio. Zach, a new parent with a $1M home and solid income, asks what to focus on over the next 5–10 years and whether topping up the offset or investing in shares makes more sense. Stuart also addresses whether Zach's discretionary trust setup is a smart long-term move. Rob asks about private banking services, what they offer, and when they’re worth it. Michael (pseudonym) walks through his detailed $5.3M property portfolio and plans to consolidate into commercial assets, asking if it’s the best way to maximise income while preserving lifestyle and flexibility.

Lucy wants guidance on timing the sale of investment properties to maximise superannuation and whether their family trust is the right vehicle for ETF investments. Blair revisits ETF portfolio structure and seeks feedback on a value-tilted SMSF strategy. Courtney and her partner, with kids on the horizon, ask where to direct their growing surplus. Finally, Stuart answers the timeless question: “If you had to start again at 18, what would you do?” This episode is packed with timeless insights for every life stage and wealth level.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17943781 Tue, 07 Oct 2025 05:00:00 +1100 2004 full false Ep 376: How to Avoid the 17% Super Death Tax Ep 376: How to Avoid the 17% Super Death Tax Read Full Blog Here

In this episode, Campbell Wallace tackles one of the most overlooked yet significant taxes in retirement planning: the 17% superannuation death benefit tax. While Australia doesn’t have a formal inheritance tax, this “sneaky tax” can quietly strip hundreds of thousands from your estate if left unmanaged, particularly when adult children inherit super balances with large taxable components. Campbell explains why this tax exists, who it applies to, and how to work around it using smarter strategies.

He breaks down the traditional recontribution approach and explains why it often falls short. More importantly, he introduces a smarter alternative, using two super accounts to isolate taxable and tax-free components. This technique can reduce, or even eliminate, the death benefit tax in under a decade, saving families significant sums. Campbell also covers real-life examples, contribution caps, expected returns, and the modest costs involved compared to the tax savings.

Listeners will also learn the importance of reversionary pensions, binding death benefit nominations, and integrating estate planning structures like testamentary trusts. If you’re nearing retirement or want to ensure your super passes to your family, not the ATO, this episode is a must-listen, packed with practical strategies and long-term benefits. A little planning now can go a very long way.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

In this episode, Campbell Wallace tackles one of the most overlooked yet significant taxes in retirement planning: the 17% superannuation death benefit tax. While Australia doesn’t have a formal inheritance tax, this “sneaky tax” can quietly strip hundreds of thousands from your estate if left unmanaged, particularly when adult children inherit super balances with large taxable components. Campbell explains why this tax exists, who it applies to, and how to work around it using smarter strategies.

He breaks down the traditional recontribution approach and explains why it often falls short. More importantly, he introduces a smarter alternative, using two super accounts to isolate taxable and tax-free components. This technique can reduce, or even eliminate, the death benefit tax in under a decade, saving families significant sums. Campbell also covers real-life examples, contribution caps, expected returns, and the modest costs involved compared to the tax savings.

Listeners will also learn the importance of reversionary pensions, binding death benefit nominations, and integrating estate planning structures like testamentary trusts. If you’re nearing retirement or want to ensure your super passes to your family, not the ATO, this episode is a must-listen, packed with practical strategies and long-term benefits. A little planning now can go a very long way.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17897361 Wed, 01 Oct 2025 05:00:00 +1000 1736 376 full false Q&A - ETF portfolio structuring, property versus ETFs, what Stuart would do differently and more Q&A - ETF portfolio structuring, property versus ETFs, what Stuart would do differently and more In this Q&A episode, Stuart answers a range of insightful listener questions on wealth-building strategies through property, ETFs, and superannuation. Burt asks if he’s on track to retire by age 60, despite limited borrowing capacity and tight cash flow. Stuart unpacks the numbers and suggests possible next steps to gain traction. Blair, seeking to build a well-structured ETF portfolio inside an SMSF, asks how to balance growth, value, and emerging market exposure, and whether holding 6 ETFs is too much. Stuart walks through how he would personally approach portfolio construction in that context.

Bryan writes in on behalf of his 18-year-old daughter, asking what Stuart would do differently if starting his investing journey again, from school leaver to retirement. Stuart offers timeless guidance, including tips on whether to pay off HECS early or focus on saving for a home. Lastly, Raj weighs up a $1.2M investment-grade property versus allocating the same monthly cash flow to a long-term ETF portfolio. Stuart breaks down the trade-offs, highlighting tax efficiency, flexibility, and psychological considerations that go beyond the spreadsheet. This episode is packed with practical, values-aligned advice for investors at every life stage looking to optimise their strategy.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart answers a range of insightful listener questions on wealth-building strategies through property, ETFs, and superannuation. Burt asks if he’s on track to retire by age 60, despite limited borrowing capacity and tight cash flow. Stuart unpacks the numbers and suggests possible next steps to gain traction. Blair, seeking to build a well-structured ETF portfolio inside an SMSF, asks how to balance growth, value, and emerging market exposure, and whether holding 6 ETFs is too much. Stuart walks through how he would personally approach portfolio construction in that context.

Bryan writes in on behalf of his 18-year-old daughter, asking what Stuart would do differently if starting his investing journey again, from school leaver to retirement. Stuart offers timeless guidance, including tips on whether to pay off HECS early or focus on saving for a home. Lastly, Raj weighs up a $1.2M investment-grade property versus allocating the same monthly cash flow to a long-term ETF portfolio. Stuart breaks down the trade-offs, highlighting tax efficiency, flexibility, and psychological considerations that go beyond the spreadsheet. This episode is packed with practical, values-aligned advice for investors at every life stage looking to optimise their strategy.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17897336 Tue, 30 Sep 2025 05:00:00 +1000 1883 full false Ep 375: What is your return on borrowing capacity (RoBC) Ep 375: What is your return on borrowing capacity (RoBC) Read Full Blog Here

In this episode, Stuart introduces a powerful framework for property investors: Return on Borrowing Capacity (RoBC). With borrowing capacity often being a limited and scarce resource, Stuart explains why it’s critical to allocate it where it delivers the greatest after-tax, long-term wealth outcomes. He unpacks the concept by comparing different investment properties with identical total returns but varying mixes of income and capital growth, demonstrating how the wrong choice can halve your wealth creation over 30 years.

Stuart discusses why investors should treat borrowing capacity like capital; it must be deployed strategically, not just conveniently. He explores the trade-offs between high-yield and high-growth assets, the real impact of rental income on borrowing limits, and why relying solely on positive cash flow can be a trap if it hinders your ability to grow wealth elsewhere.

The episode also covers scenarios where reallocating borrowing capacity by selling underperforming assets can unlock better long-term outcomes. Finally, Stuart reminds listeners that while a spreadsheet can model returns, wise portfolio decisions must also account for opportunity cost, tax, and quality. Whether you’re just starting out or rebalancing your portfolio, this episode will sharpen how you think about borrowing and investing for long-term success.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

In this episode, Stuart introduces a powerful framework for property investors: Return on Borrowing Capacity (RoBC). With borrowing capacity often being a limited and scarce resource, Stuart explains why it’s critical to allocate it where it delivers the greatest after-tax, long-term wealth outcomes. He unpacks the concept by comparing different investment properties with identical total returns but varying mixes of income and capital growth, demonstrating how the wrong choice can halve your wealth creation over 30 years.

Stuart discusses why investors should treat borrowing capacity like capital; it must be deployed strategically, not just conveniently. He explores the trade-offs between high-yield and high-growth assets, the real impact of rental income on borrowing limits, and why relying solely on positive cash flow can be a trap if it hinders your ability to grow wealth elsewhere.

The episode also covers scenarios where reallocating borrowing capacity by selling underperforming assets can unlock better long-term outcomes. Finally, Stuart reminds listeners that while a spreadsheet can model returns, wise portfolio decisions must also account for opportunity cost, tax, and quality. Whether you’re just starting out or rebalancing your portfolio, this episode will sharpen how you think about borrowing and investing for long-term success.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17852700 Wed, 24 Sep 2025 05:00:00 +1000 1578 375 full false Q&A - How much is enough, don’t risk tax benefits, funding renovations and more Q&A - How much is enough, don’t risk tax benefits, funding renovations and more In this episode, Stuart addresses a wide range of thoughtful listener questions, focusing on managing risk, balancing lifestyle with long-term wealth, and making informed property and investment decisions. Andrew asks whether it’s necessary to chase every spreadsheet-optimised return when he and his partner already have "enough," prompting Stuart to explore hybrid strategies that protect cash flow while still building wealth, especially when children are on the horizon. Sam raises concerns about satisfying the NSW First Home Buyer residency requirements and how failing to update the electoral roll could impact both stamp duty exemptions and CGT outcomes.

Glenn and his wife are navigating a major family home renovation and weighing whether to release equity or sell one of their investment properties to fund the shortfall. Stuart shares insights on preserving long-term flexibility while reducing financial pressure. Adamo considers whether to keep or sell his Adelaide investment property to afford a better home in Sydney’s Inner West—Stuart dives into the numbers and strategic logic. With questions on tax timing, CGT rules, and capital allocation from young first-home buyers to financially secure professionals, this episode offers clear, values-aligned guidance to help listeners build wealth without compromising lifestyle or peace of mind.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this episode, Stuart addresses a wide range of thoughtful listener questions, focusing on managing risk, balancing lifestyle with long-term wealth, and making informed property and investment decisions. Andrew asks whether it’s necessary to chase every spreadsheet-optimised return when he and his partner already have "enough," prompting Stuart to explore hybrid strategies that protect cash flow while still building wealth, especially when children are on the horizon. Sam raises concerns about satisfying the NSW First Home Buyer residency requirements and how failing to update the electoral roll could impact both stamp duty exemptions and CGT outcomes.

Glenn and his wife are navigating a major family home renovation and weighing whether to release equity or sell one of their investment properties to fund the shortfall. Stuart shares insights on preserving long-term flexibility while reducing financial pressure. Adamo considers whether to keep or sell his Adelaide investment property to afford a better home in Sydney’s Inner West—Stuart dives into the numbers and strategic logic. With questions on tax timing, CGT rules, and capital allocation from young first-home buyers to financially secure professionals, this episode offers clear, values-aligned guidance to help listeners build wealth without compromising lifestyle or peace of mind.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17852637 Tue, 23 Sep 2025 05:00:00 +1000 1553 full false Ep 374: Testamentary trusts and other estate planning strategies Ep 374: Testamentary trusts and other estate planning strategies Read Full Blog Here

In this episode, Stuart delves into the practical benefits and strategic importance of including a testamentary trust in your will. He explains how testamentary trusts offer powerful advantages in terms of tax efficiency, asset protection, and long-term flexibility, especially for families with minor children or complex financial situations. Stuart breaks down why income distributed to minors from a testamentary trust qualifies for adult tax rates, how these trusts can shield inheritances from relationship breakdowns or poor financial decisions, and why quarantining estate capital helps preserve tax concessions.

He also explores real-life scenarios where testamentary trusts can be useful, such as supporting at-risk beneficiaries, funding intergenerational education, or managing inheritance within large families. Stuart discusses structuring loans from the trust to beneficiaries, how to handle control of trusts and companies in estate planning, and the importance of aligning your superannuation nominations with your broader inheritance strategy.

For those curious about superannuation death benefit taxes, Stuart previews Campbell Wallace’s upcoming podcast and blog that will explore how to reduce or avoid the so-called “super inheritance tax.” Whether you’re updating your own will or helping your parents structure theirs, this episode is a must-listen for anyone aiming to build a thoughtful, tax-smart estate plan.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

In this episode, Stuart delves into the practical benefits and strategic importance of including a testamentary trust in your will. He explains how testamentary trusts offer powerful advantages in terms of tax efficiency, asset protection, and long-term flexibility, especially for families with minor children or complex financial situations. Stuart breaks down why income distributed to minors from a testamentary trust qualifies for adult tax rates, how these trusts can shield inheritances from relationship breakdowns or poor financial decisions, and why quarantining estate capital helps preserve tax concessions.

He also explores real-life scenarios where testamentary trusts can be useful, such as supporting at-risk beneficiaries, funding intergenerational education, or managing inheritance within large families. Stuart discusses structuring loans from the trust to beneficiaries, how to handle control of trusts and companies in estate planning, and the importance of aligning your superannuation nominations with your broader inheritance strategy.

For those curious about superannuation death benefit taxes, Stuart previews Campbell Wallace’s upcoming podcast and blog that will explore how to reduce or avoid the so-called “super inheritance tax.” Whether you’re updating your own will or helping your parents structure theirs, this episode is a must-listen for anyone aiming to build a thoughtful, tax-smart estate plan.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17818346 Wed, 17 Sep 2025 05:00:00 +1000 1981 374 full false Q&A - Should we buy in Melbourne, development CGT, FHB advice and more Q&A - Should we buy in Melbourne, development CGT, FHB advice and more In this Q&A episode, Campbell Wallace answers a wide range of listener questions from first-home buyers to seasoned investors navigating tax and strategic property decisions. John, a rentvestor with a young family, asks whether buying an investment-grade property in Melbourne now, with plans to use the proceeds to reduce PPOR debt in the future, aligns with his flexible, lifestyle-focused goals. Campbell explores how this fits into a broader wealth strategy and the trade-offs involved.

Steve seeks clarity on the tax implications of a small-scale development profit, asking whether his return will be taxed as capital gains or income, and how reinvesting or using super contributions might defer or reduce the liability. Campbell outlines the critical details of tax treatment and timing.

Namak asks how to handle a delisted ASX stock he sold for a nominal value to crystallise a loss, and whether the cost, fee, or both can be claimed. A 21-year-old first-home buyer asks about investment-grade criteria, CGT exemption rules when living with housemates, and tips for young investors planning early financial independence. Campbell closes with insights on structuring property ownership, buffers, and relationship planning. A thoughtful episode for anyone looking to optimise their next financial move.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Campbell Wallace answers a wide range of listener questions from first-home buyers to seasoned investors navigating tax and strategic property decisions. John, a rentvestor with a young family, asks whether buying an investment-grade property in Melbourne now, with plans to use the proceeds to reduce PPOR debt in the future, aligns with his flexible, lifestyle-focused goals. Campbell explores how this fits into a broader wealth strategy and the trade-offs involved.

Steve seeks clarity on the tax implications of a small-scale development profit, asking whether his return will be taxed as capital gains or income, and how reinvesting or using super contributions might defer or reduce the liability. Campbell outlines the critical details of tax treatment and timing.

Namak asks how to handle a delisted ASX stock he sold for a nominal value to crystallise a loss, and whether the cost, fee, or both can be claimed. A 21-year-old first-home buyer asks about investment-grade criteria, CGT exemption rules when living with housemates, and tips for young investors planning early financial independence. Campbell closes with insights on structuring property ownership, buffers, and relationship planning. A thoughtful episode for anyone looking to optimise their next financial move.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17818304 Tue, 16 Sep 2025 05:00:00 +1000 1652 full false Ep 373: Property Management- How to manage the manger and picking a tenant Ep 373: Property Management- How to manage the manger and picking a tenant Read Full Blog Here

In this episode, Stuart tackles a vital topic for every property investor: how to manage your property manager effectively, rather than being managed by them. He explains why great property management is essential for protecting your investment and cash flow, and how unrealistic expectations or poor communication can lead to costly mistakes. Stuart shares practical tips on navigating maintenance requests, managing rental increases, attending inspections, and choosing the right tenants, all while maintaining the right level of owner involvement. He also covers how to identify and switch to a high-quality property manager, including what fees to expect across different states and what to look for beyond price.

Later in the episode, Stuart answers a listener's question from Anne about strategies for helping her son prepare to buy his first home in Brisbane. He explores different ownership and living options, including renting the property first or moving in straight away, and explains the CGT implications of each. Stuart also offers advice on choosing the right type of property, balancing ambition with practicality, and structuring the loan, comparing offset accounts versus fixed-rate options for young buyers. Whether you’re a seasoned investor or helping someone get started, this episode is packed with grounded, actionable guidance.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

In this episode, Stuart tackles a vital topic for every property investor: how to manage your property manager effectively, rather than being managed by them. He explains why great property management is essential for protecting your investment and cash flow, and how unrealistic expectations or poor communication can lead to costly mistakes. Stuart shares practical tips on navigating maintenance requests, managing rental increases, attending inspections, and choosing the right tenants, all while maintaining the right level of owner involvement. He also covers how to identify and switch to a high-quality property manager, including what fees to expect across different states and what to look for beyond price.

Later in the episode, Stuart answers a listener's question from Anne about strategies for helping her son prepare to buy his first home in Brisbane. He explores different ownership and living options, including renting the property first or moving in straight away, and explains the CGT implications of each. Stuart also offers advice on choosing the right type of property, balancing ambition with practicality, and structuring the loan, comparing offset accounts versus fixed-rate options for young buyers. Whether you’re a seasoned investor or helping someone get started, this episode is packed with grounded, actionable guidance.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17776819 Wed, 10 Sep 2025 05:00:00 +1000 1854 373 full false Q&A - Which ETFs to use, balancing super tax, fees and returns, parking money in offset and more Q&A - Which ETFs to use, balancing super tax, fees and returns, parking money in offset and more In this comprehensive Q&A episode, Stuart answers a wide range of listener questions spanning early retirement, home loan strategy, asset allocation, and superannuation management. Brett, a low-income investor aiming to retire at 45 with $100–120K in passive income, shares his strategy of holding four investment properties and building a trust-based ETF portfolio. Stuart offers guidance on asset spread, ETF weighting, and tax efficiency. Travis outlines his Adelaide-based property and superannuation structure and asks whether to sell an underperforming investment property to fund a higher-quality principal residence. Stuart weighs the pros and cons.

Doba, a new migrant to Australia, asks how best to manage $400K in cash, weighing super contributions, offset accounts, and ETF investment. Stuart lays out a cautious, staged approach. Marco, a 52-year-old business owner considering semi-retirement, wonders whether to sell his business and pay off the home loan. Stuart explores how to stress-test this plan for future income needs. Lastly, John is in a public sector super fund and questions whether to switch to Hostplus Choiceplus due to high fees, despite incurring tax on transfer. Stuart breaks down the fee vs. return trade-off and the long-term benefit of low-cost index investing. A valuable episode for investors at every life stage.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this comprehensive Q&A episode, Stuart answers a wide range of listener questions spanning early retirement, home loan strategy, asset allocation, and superannuation management. Brett, a low-income investor aiming to retire at 45 with $100–120K in passive income, shares his strategy of holding four investment properties and building a trust-based ETF portfolio. Stuart offers guidance on asset spread, ETF weighting, and tax efficiency. Travis outlines his Adelaide-based property and superannuation structure and asks whether to sell an underperforming investment property to fund a higher-quality principal residence. Stuart weighs the pros and cons.

Doba, a new migrant to Australia, asks how best to manage $400K in cash, weighing super contributions, offset accounts, and ETF investment. Stuart lays out a cautious, staged approach. Marco, a 52-year-old business owner considering semi-retirement, wonders whether to sell his business and pay off the home loan. Stuart explores how to stress-test this plan for future income needs. Lastly, John is in a public sector super fund and questions whether to switch to Hostplus Choiceplus due to high fees, despite incurring tax on transfer. Stuart breaks down the fee vs. return trade-off and the long-term benefit of low-cost index investing. A valuable episode for investors at every life stage.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17776847 Tue, 09 Sep 2025 05:00:00 +1000 1757 full false Ep 372: How to navigate rising land tax Ep 372: How to navigate rising land tax Read Full Blog Here

In this episode, Campbell explores one of the biggest creeping costs for property investors today, land tax, and why its rising impact should prompt a serious rethink of long-term investment strategies. He breaks down how land tax thresholds and rates have shifted over the last 20 years in Victoria, NSW, and Queensland, and highlights how frozen indexation and bracket creep are quietly eroding net rental yields. Using projections over 15 and 30 years, Campbell reveals how even investment-grade properties could see their net yields drop below 0.2% if land tax rates remain unchanged, reinforcing the message that residential property is not an income strategy, it’s a capital growth play.

He also answers listener questions, including Erik’s query on the best ownership structure for purchasing a forever home to preserve intergenerational wealth, and Justin’s detailed questions around the 6-year CGT rule and whether a temporary move-in could provide a valuable tax exemption down the track.

Campbell wraps up by stressing the importance of diversification, particularly into shares, which offer more consistent yields and liquidity, and why investors should work with advisors who are independent and experienced across multiple asset classes. A must-listen for anyone navigating today’s changing property tax landscape.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Full Blog Here

In this episode, Campbell explores one of the biggest creeping costs for property investors today, land tax, and why its rising impact should prompt a serious rethink of long-term investment strategies. He breaks down how land tax thresholds and rates have shifted over the last 20 years in Victoria, NSW, and Queensland, and highlights how frozen indexation and bracket creep are quietly eroding net rental yields. Using projections over 15 and 30 years, Campbell reveals how even investment-grade properties could see their net yields drop below 0.2% if land tax rates remain unchanged, reinforcing the message that residential property is not an income strategy, it’s a capital growth play.

He also answers listener questions, including Erik’s query on the best ownership structure for purchasing a forever home to preserve intergenerational wealth, and Justin’s detailed questions around the 6-year CGT rule and whether a temporary move-in could provide a valuable tax exemption down the track.

Campbell wraps up by stressing the importance of diversification, particularly into shares, which offer more consistent yields and liquidity, and why investors should work with advisors who are independent and experienced across multiple asset classes. A must-listen for anyone navigating today’s changing property tax landscape.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17748105 Wed, 03 Sep 2025 05:00:00 +1000 1584 372 full false Q&A - Should Tammy sell, which property, super access and commercial property in SMSF Q&A - Should Tammy sell, which property, super access and commercial property in SMSF In this Q&A episode, Stuart dives into some complex and common questions from listeners navigating investment property decisions, superannuation strategies, and long-term planning. Tammy asks whether refinancing an investment loan and increasing an equity release is the best way to fund home renovations and a car upgrade. Stuart explains why selling one of their properties might be a more efficient solution.

Viktor, a long-term Melbourne investor, wants guidance on whether to sell one or more underperforming properties to upgrade the family home or wait for the next property cycle. Stuart breaks down the trade-offs between asset quality, timing the market, and using equity wisely.

Adam asks for clarity on accessing superannuation after age 60 if you stop one of multiple jobs. Stuart provides a simple explanation of the rules and how they apply.

Finally, Norm and Sharee, small business owners approaching 50, are considering using their SMSF to purchase their business premises. Stuart discusses the pros and cons of concentrating super in one asset and the long-term benefits of liquidity and diversification. He also weighs in on their plans to buy a holiday home, explaining ownership structures and strategies to fund it tax-effectively. A rich episode for property owners and planners alike.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart dives into some complex and common questions from listeners navigating investment property decisions, superannuation strategies, and long-term planning. Tammy asks whether refinancing an investment loan and increasing an equity release is the best way to fund home renovations and a car upgrade. Stuart explains why selling one of their properties might be a more efficient solution.

Viktor, a long-term Melbourne investor, wants guidance on whether to sell one or more underperforming properties to upgrade the family home or wait for the next property cycle. Stuart breaks down the trade-offs between asset quality, timing the market, and using equity wisely.

Adam asks for clarity on accessing superannuation after age 60 if you stop one of multiple jobs. Stuart provides a simple explanation of the rules and how they apply.

Finally, Norm and Sharee, small business owners approaching 50, are considering using their SMSF to purchase their business premises. Stuart discusses the pros and cons of concentrating super in one asset and the long-term benefits of liquidity and diversification. He also weighs in on their plans to buy a holiday home, explaining ownership structures and strategies to fund it tax-effectively. A rich episode for property owners and planners alike.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17748140 Tue, 02 Sep 2025 05:00:00 +1000 2067 full false Ep 371: Beware of property spruikers: How to spot a property fad Ep 371: Beware of property spruikers: How to spot a property fad Read full blog here.

In this episode, Stuart sounds the alarm on property spruikers and how to spot the latest fads that can lead unsuspecting investors astray. Drawing from decades of experience, he explains how to distinguish genuine investment advice from cleverly packaged sales pitches designed to serve the seller, not the buyer. From positive cash flow regional properties in the early 2000s to the GFC-era US property rush, mining town booms, and off-the-plan apartment oversupply, Stuart shares real examples of past trends that promised high returns but delivered disappointing long-term results.

He outlines the red flags of property fads: fast-money promises, businesses growing too quickly, unrealistic return forecasts, and markets driven by a handful of players. Stuart also highlights how savvy marketing, short-term results, and glowing early reviews can mask poor-quality advice. With more recent trends like development site deals and commercial property pushes now dominating the conversation, this episode is a timely warning for investors who want to stay grounded in evidence, not hype.

Whether you're new to property investing or navigating the next stage of your portfolio, Stuart’s insights will help you stay focused on sustainable, long-term strategies and avoid costly missteps fueled by short-term noise.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In this episode, Stuart sounds the alarm on property spruikers and how to spot the latest fads that can lead unsuspecting investors astray. Drawing from decades of experience, he explains how to distinguish genuine investment advice from cleverly packaged sales pitches designed to serve the seller, not the buyer. From positive cash flow regional properties in the early 2000s to the GFC-era US property rush, mining town booms, and off-the-plan apartment oversupply, Stuart shares real examples of past trends that promised high returns but delivered disappointing long-term results.

He outlines the red flags of property fads: fast-money promises, businesses growing too quickly, unrealistic return forecasts, and markets driven by a handful of players. Stuart also highlights how savvy marketing, short-term results, and glowing early reviews can mask poor-quality advice. With more recent trends like development site deals and commercial property pushes now dominating the conversation, this episode is a timely warning for investors who want to stay grounded in evidence, not hype.

Whether you're new to property investing or navigating the next stage of your portfolio, Stuart’s insights will help you stay focused on sustainable, long-term strategies and avoid costly missteps fueled by short-term noise.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17703665 Wed, 27 Aug 2025 05:00:00 +1000 2007 371 full false Q&A - Is it worth switching to Vanguard Super, home upgrade strategy, fixing cash flow Q&A - Is it worth switching to Vanguard Super, home upgrade strategy, fixing cash flow In this Q&A episode, Stuart answers a diverse set of listener questions covering retirement preparation, home upgrade decisions, cash flow optimisation, and early-stage financial planning. He begins with El, a couple in their late 50s wondering whether switching from Care and Brighter Super to Vanguard Super is worth the effort as they approach retirement. Stuart outlines the key considerations for super fund selection at this life stage, including fees, flexibility, and pension phase planning.

Next, Matt and his wife in Perth are juggling property investment, business growth, and a long-term goal of upgrading to a $3.5 million home. Stuart discusses whether they should focus on paying down their home loan or continue investing, and when an SMSF strategy might make sense.

Liam, a 28-year-old with a young family, asks how to juggle mortgage repayments, super contributions, and the possibility of investing while planning for a wedding and a new business venture. Stuart provides clarity on income protection, leveraging wisely, and what to prioritise in the early years.

Finally, Sarah and her partner, middle-income earners in their 40s, feel stuck despite having solid assets. Stuart offers reassurance and practical tips for improving cash flow, building buffers, and regaining financial confidence. A supportive episode for every life stage.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart answers a diverse set of listener questions covering retirement preparation, home upgrade decisions, cash flow optimisation, and early-stage financial planning. He begins with El, a couple in their late 50s wondering whether switching from Care and Brighter Super to Vanguard Super is worth the effort as they approach retirement. Stuart outlines the key considerations for super fund selection at this life stage, including fees, flexibility, and pension phase planning.

Next, Matt and his wife in Perth are juggling property investment, business growth, and a long-term goal of upgrading to a $3.5 million home. Stuart discusses whether they should focus on paying down their home loan or continue investing, and when an SMSF strategy might make sense.

Liam, a 28-year-old with a young family, asks how to juggle mortgage repayments, super contributions, and the possibility of investing while planning for a wedding and a new business venture. Stuart provides clarity on income protection, leveraging wisely, and what to prioritise in the early years.

Finally, Sarah and her partner, middle-income earners in their 40s, feel stuck despite having solid assets. Stuart offers reassurance and practical tips for improving cash flow, building buffers, and regaining financial confidence. A supportive episode for every life stage.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17703539 Tue, 26 Aug 2025 05:00:00 +1000 2002 full false Ep 370: Does long-term data tell us where to invest in property? Ep 370: Does long-term data tell us where to invest in property? Read full blog here.

In this data-rich episode, Stuart takes a deep dive into what 40 years of long-term data reveals about property investing across Australia’s capital cities. While the media often focuses on short-term fluctuations, Stuart explains why property should be viewed as a multi-decade investment and how compounding growth over time can deliver extraordinary returns. He breaks down the historical performance of Sydney, Melbourne, Brisbane, Adelaide, and Perth, highlighting how each city has tracked over 10, 20, 30, and 40-year periods, and what investors can learn from those patterns.

Stuart also explains why the median house price should be seen as a benchmark, not a guaranteed result, and how thoughtful asset selection is key to outperforming it over the long term. He explores whether cities like Melbourne have bottomed out after years of underperformance, if Sydney’s historical strength will continue, and why Brisbane may still have runway left ahead of the 2032 Olympics. Plus, he warns that Adelaide and Perth, despite recent strong results, may be entering more moderate growth phases.

For investors trying to cut through short-term noise and build a high-performing property portfolio, this episode offers clear, evidence-based insights to help you make smarter long-term decisions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In this data-rich episode, Stuart takes a deep dive into what 40 years of long-term data reveals about property investing across Australia’s capital cities. While the media often focuses on short-term fluctuations, Stuart explains why property should be viewed as a multi-decade investment and how compounding growth over time can deliver extraordinary returns. He breaks down the historical performance of Sydney, Melbourne, Brisbane, Adelaide, and Perth, highlighting how each city has tracked over 10, 20, 30, and 40-year periods, and what investors can learn from those patterns.

Stuart also explains why the median house price should be seen as a benchmark, not a guaranteed result, and how thoughtful asset selection is key to outperforming it over the long term. He explores whether cities like Melbourne have bottomed out after years of underperformance, if Sydney’s historical strength will continue, and why Brisbane may still have runway left ahead of the 2032 Olympics. Plus, he warns that Adelaide and Perth, despite recent strong results, may be entering more moderate growth phases.

For investors trying to cut through short-term noise and build a high-performing property portfolio, this episode offers clear, evidence-based insights to help you make smarter long-term decisions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17664167 Wed, 20 Aug 2025 05:00:00 +1000 1890 370 full false Q&A - Planning with uncertainty, how to find useful property growth data and more Q&A - Planning with uncertainty, how to find useful property growth data and more In this Q&A episode, Stuart answers an insightful mix of listener questions that span health, housing, retirement planning, and how to balance life’s big financial decisions. He begins with “Lucky,” a high-income medical professional and cancer survivor, who asks whether his health history should influence how much he gears, and whether to upgrade his Melbourne home, buy in Sydney near family, or stick with investing in ETFs and super. Stuart unpacks each option, weighing lifestyle, liquidity, and long-term strategy.

Next, Matt, soon to retire, asks whether using an offset account against his investment property loan is a smart way to manage share market risk in retirement. Stuart shares how to approach this strategy to strike a balance between flexibility and return.

Steve asks where average investors can access affordable, quality property data for DIY analysis. Stuart discusses practical alternatives to high-cost platforms.

Finally, Jordan and his partner share their impressive early success: two investment properties by age 25, but now struggling to balance the desire for future growth with living more in the present. Stuart responds with guidance on timing property moves, managing gearing, and the mindset shift needed to enjoy the benefits of your financial discipline, such as taking that long-awaited holiday. A rich episode for all life stages.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart answers an insightful mix of listener questions that span health, housing, retirement planning, and how to balance life’s big financial decisions. He begins with “Lucky,” a high-income medical professional and cancer survivor, who asks whether his health history should influence how much he gears, and whether to upgrade his Melbourne home, buy in Sydney near family, or stick with investing in ETFs and super. Stuart unpacks each option, weighing lifestyle, liquidity, and long-term strategy.

Next, Matt, soon to retire, asks whether using an offset account against his investment property loan is a smart way to manage share market risk in retirement. Stuart shares how to approach this strategy to strike a balance between flexibility and return.

Steve asks where average investors can access affordable, quality property data for DIY analysis. Stuart discusses practical alternatives to high-cost platforms.

Finally, Jordan and his partner share their impressive early success: two investment properties by age 25, but now struggling to balance the desire for future growth with living more in the present. Stuart responds with guidance on timing property moves, managing gearing, and the mindset shift needed to enjoy the benefits of your financial discipline, such as taking that long-awaited holiday. A rich episode for all life stages.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17664153 Tue, 19 Aug 2025 05:00:00 +1000 2004 full false Ep 369: Strap yourself in for some tax reform – here are some suggestions Ep 369: Strap yourself in for some tax reform – here are some suggestions Read full blog here.

In this forward-looking episode, Stuart unpacks a range of bold ideas for tax reform in Australia, urging policymakers to think beyond the status quo. With both federal and state budgets under pressure, and income taxes increasingly unsustainable, Stuart proposes a smarter, more balanced system that supports economic growth while ensuring fairness. He explores the dangers of bracket creep, the merits of expanding GST through a luxury rate, and the potential of capping the CGT exemption on primary residences to close one of the country’s most generous tax loopholes.

Stuart also revisits the role of private investors in solving the housing crisis, suggesting innovative tax incentives to increase the supply of affordable rentals. In superannuation, he outlines a simple yet powerful tiered contribution tax system that could help lower-income earners grow their balances faster.

Later in the episode, Stuart responds to a listener question from Dee, a high-earning sole trader and single parent, wondering whether to purchase her next investment property in her name or via a family trust. He explains the trade-offs between asset protection, negative gearing, and borrowing capacity, especially for professionals in higher-risk fields. A must-listen for anyone thinking about how tax policy and personal strategy can evolve for a better financial future.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In this forward-looking episode, Stuart unpacks a range of bold ideas for tax reform in Australia, urging policymakers to think beyond the status quo. With both federal and state budgets under pressure, and income taxes increasingly unsustainable, Stuart proposes a smarter, more balanced system that supports economic growth while ensuring fairness. He explores the dangers of bracket creep, the merits of expanding GST through a luxury rate, and the potential of capping the CGT exemption on primary residences to close one of the country’s most generous tax loopholes.

Stuart also revisits the role of private investors in solving the housing crisis, suggesting innovative tax incentives to increase the supply of affordable rentals. In superannuation, he outlines a simple yet powerful tiered contribution tax system that could help lower-income earners grow their balances faster.

Later in the episode, Stuart responds to a listener question from Dee, a high-earning sole trader and single parent, wondering whether to purchase her next investment property in her name or via a family trust. He explains the trade-offs between asset protection, negative gearing, and borrowing capacity, especially for professionals in higher-risk fields. A must-listen for anyone thinking about how tax policy and personal strategy can evolve for a better financial future.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17621392 Wed, 13 Aug 2025 05:00:00 +1000 1820 369 full false Q&A - Rebalancing super, is property concentration a problem, when should you sell property Q&A - Rebalancing super, is property concentration a problem, when should you sell property In this episode, Stuart addresses a wide range of listener questions, focusing on smart super strategies, investment property decisions, and how to balance financial goals with market realities. Jeff asks whether funds in an offset account with a non-bank lender like Resimac are safe, prompting a discussion on lending structures and risk. Alex seeks clarity on the pros and cons of rebalancing super investment options, while Pierre (alias) returns with a detailed follow-up on reallocating borrowing capacity and how to weigh shares vs. property with a 25-year investment horizon.

Stuart also responds to Graham and Helen, a retired couple with super nearing the cap, who are considering how to best manage their share portfolios, pensions, and investment property. Another listener asks about selling a one-bedroom Brisbane apartment ahead of retirement and using the funds to either build super or invest elsewhere.

Finally, Stuart offers advice to a 34-year-old couple aiming for $2 million in net worth by age 40, debating whether to continue investing in ETFs or buy another investment property in Melbourne. With thoughtful insights on diversification, timing, tax efficiency, and long-term planning, this episode is packed with real-world guidance for investors at every stage of the wealth-building journey.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this episode, Stuart addresses a wide range of listener questions, focusing on smart super strategies, investment property decisions, and how to balance financial goals with market realities. Jeff asks whether funds in an offset account with a non-bank lender like Resimac are safe, prompting a discussion on lending structures and risk. Alex seeks clarity on the pros and cons of rebalancing super investment options, while Pierre (alias) returns with a detailed follow-up on reallocating borrowing capacity and how to weigh shares vs. property with a 25-year investment horizon.

Stuart also responds to Graham and Helen, a retired couple with super nearing the cap, who are considering how to best manage their share portfolios, pensions, and investment property. Another listener asks about selling a one-bedroom Brisbane apartment ahead of retirement and using the funds to either build super or invest elsewhere.

Finally, Stuart offers advice to a 34-year-old couple aiming for $2 million in net worth by age 40, debating whether to continue investing in ETFs or buy another investment property in Melbourne. With thoughtful insights on diversification, timing, tax efficiency, and long-term planning, this episode is packed with real-world guidance for investors at every stage of the wealth-building journey.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17621370 Tue, 12 Aug 2025 05:00:00 +1000 1922 full false Ep: 368 Keep your powder dry: Sometimes it’s wise to invest less Ep: 368 Keep your powder dry: Sometimes it’s wise to invest less Read full blog here.

In this episode, Stuart explores why sometimes the smartest investment strategy is to do less. With global markets hitting all-time highs and every major asset class delivering positive returns in 2025, Stuart cautions against overconfidence. He explains why sitting on cash or keeping borrowing capacity in reserve can be a strategic move, not a missed opportunity. Drawing on recent market trends, including the unusual simultaneous rise of gold and bitcoin, Stuart unpacks why this environment feels disconnected from economic and political realities.

He also discusses the impact of index investing on market momentum, why market-cap indexing may behave like a growth strategy, and why blindly following the crowd can increase your risk exposure. Alongside this market reflection, Stuart answers a detailed listener question from Bernadette, a 51-year-old planning for retirement. He analyses her strategy to maximise super contributions, transition into part-time work, and possibly adopt Hostplus, ChoicePlus or a WRAP account to improve tax efficiency.

With practical advice on asset allocation, superstructure selection, and risk management, Stuart reinforces a core message: building long-term wealth doesn’t require reacting to every market move. Sometimes, keeping your powder dry is the most powerful move you can make.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In this episode, Stuart explores why sometimes the smartest investment strategy is to do less. With global markets hitting all-time highs and every major asset class delivering positive returns in 2025, Stuart cautions against overconfidence. He explains why sitting on cash or keeping borrowing capacity in reserve can be a strategic move, not a missed opportunity. Drawing on recent market trends, including the unusual simultaneous rise of gold and bitcoin, Stuart unpacks why this environment feels disconnected from economic and political realities.

He also discusses the impact of index investing on market momentum, why market-cap indexing may behave like a growth strategy, and why blindly following the crowd can increase your risk exposure. Alongside this market reflection, Stuart answers a detailed listener question from Bernadette, a 51-year-old planning for retirement. He analyses her strategy to maximise super contributions, transition into part-time work, and possibly adopt Hostplus, ChoicePlus or a WRAP account to improve tax efficiency.

With practical advice on asset allocation, superstructure selection, and risk management, Stuart reinforces a core message: building long-term wealth doesn’t require reacting to every market move. Sometimes, keeping your powder dry is the most powerful move you can make.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17604307 Wed, 06 Aug 2025 05:00:00 +1000 1987 368 full false Q&A - Smart Property Moves, CGT Timing, and Building Wealth for the Long Term Q&A - Smart Property Moves, CGT Timing, and Building Wealth for the Long Term In this Q&A-packed episode, Campbell tackles a variety of real-life scenarios from listeners navigating property decisions, capital gains tax, and super strategies. He begins by clarifying whether deferring the sale of investment properties until retirement results in meaningful CGT savings, a common assumption he carefully unpacks for Catherine. Elise then asks whether to continue hunting for an investment property, focus on paying off the mortgage, or invest in shares. Campbell shares a practical decision-making framework based on flexibility, returns, and borrowing power.

Next, Matt raises a nuanced estate planning question about SMSFs, wrap platforms, and directing super death benefits into a private trust. He explains the pros and cons of SMSFs versus wrap platforms and highlights which providers support direct access without needing a financial adviser.

Simon’s question on potential CGT exposure after co-purchasing a home with his mother leads to a clear explanation of how CGT applies to partial ownership, even without rental income. Finally, Ray seeks guidance on which of three strategies will best position him and his wife to buy a future family home while relocating frequently for work. Campbell compares ETFs, investment properties, and CGT exemptions, giving Ray a clear path to building flexibility and wealth. A rich episode for strategic thinkers.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A-packed episode, Campbell tackles a variety of real-life scenarios from listeners navigating property decisions, capital gains tax, and super strategies. He begins by clarifying whether deferring the sale of investment properties until retirement results in meaningful CGT savings, a common assumption he carefully unpacks for Catherine. Elise then asks whether to continue hunting for an investment property, focus on paying off the mortgage, or invest in shares. Campbell shares a practical decision-making framework based on flexibility, returns, and borrowing power.

Next, Matt raises a nuanced estate planning question about SMSFs, wrap platforms, and directing super death benefits into a private trust. He explains the pros and cons of SMSFs versus wrap platforms and highlights which providers support direct access without needing a financial adviser.

Simon’s question on potential CGT exposure after co-purchasing a home with his mother leads to a clear explanation of how CGT applies to partial ownership, even without rental income. Finally, Ray seeks guidance on which of three strategies will best position him and his wife to buy a future family home while relocating frequently for work. Campbell compares ETFs, investment properties, and CGT exemptions, giving Ray a clear path to building flexibility and wealth. A rich episode for strategic thinkers.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17604321 Tue, 05 Aug 2025 05:00:00 +1000 1784 full false Ep: 367 Best super fund for 2025 Ep: 367 Best super fund for 2025 Read full blog here

In this episode, Stuart reveals the results of his annual review of super fund performance, naming the best super fund for 2025. He compares returns across both Balanced and High Growth investment options from Australia’s leading industry and retail super funds, including Hostplus, UniSuper, ART, AustralianSuper, and the increasingly competitive Vanguard Super.

But investment returns and fees aren’t the only criteria that matter. Stuart delves deeper into overlooked factors, including transparency in asset valuation (especially for unlisted assets), board governance and experience, cybersecurity risks, and service quality. He raises red flags about funds influenced by union-backed boards and highlights service issues, including lengthy wait times and delayed payouts.

Stuart also explains the hidden tax costs in pooled super funds, especially the tax drag from unrealised capital gains, and how wrap platforms or SMSFs may offer smarter alternatives for engaged investors. He outlines when splitting super across two funds might be a useful diversification strategy, and who should consider using AustralianSuper’s Member Direct or a wrap platform like Hub24 or Netwealth.

Whether you're looking for the best net returns, lower tax drag, or more control over your retirement savings, this episode offers clear insights to help you optimise your super in 2025 and beyond.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here

In this episode, Stuart reveals the results of his annual review of super fund performance, naming the best super fund for 2025. He compares returns across both Balanced and High Growth investment options from Australia’s leading industry and retail super funds, including Hostplus, UniSuper, ART, AustralianSuper, and the increasingly competitive Vanguard Super.

But investment returns and fees aren’t the only criteria that matter. Stuart delves deeper into overlooked factors, including transparency in asset valuation (especially for unlisted assets), board governance and experience, cybersecurity risks, and service quality. He raises red flags about funds influenced by union-backed boards and highlights service issues, including lengthy wait times and delayed payouts.

Stuart also explains the hidden tax costs in pooled super funds, especially the tax drag from unrealised capital gains, and how wrap platforms or SMSFs may offer smarter alternatives for engaged investors. He outlines when splitting super across two funds might be a useful diversification strategy, and who should consider using AustralianSuper’s Member Direct or a wrap platform like Hub24 or Netwealth.

Whether you're looking for the best net returns, lower tax drag, or more control over your retirement savings, this episode offers clear insights to help you optimise your super in 2025 and beyond.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17553689 Wed, 30 Jul 2025 05:00:00 +1000 2515 367 full false Q&A - Property red flags, home upgrade and downgrade considerations, moving property equity into super Q&A - Property red flags, home upgrade and downgrade considerations, moving property equity into super In this Q&A episode, Stuart covers a wide range of real-life scenarios, offering clear insights on property strategy, superannuation, and retirement planning. He begins by unpacking Paul’s question about setting up a self-managed super fund (SMSF) and whether his current balance is sufficient to make a property purchase viable within it. Stuart also reflects on the quality of Paul’s Melbourne townhouse investment and discusses how to assess whether a property is genuinely investment-grade. Paul’s second question around investing savings for his four young children prompts a broader discussion on smarter options beyond traditional bank accounts.

John’s situation leads to a compelling conversation around downsizing in retirement. Stuart evaluates John's unique plan of selling the family home, investing the proceeds into super, and renting to try different locations before settling permanently.

Other questions explored include what to consider when upgrading to a more premium home, the risks of holding off on selling your current home, and how to structure equity effectively. Stuart finishes the episode with a deep dive into Amelie’s property portfolio and how to optimise her $2.2 million in equity to build super and potentially upgrade to a better principal residence. A must-listen for property owners and planners alike.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart covers a wide range of real-life scenarios, offering clear insights on property strategy, superannuation, and retirement planning. He begins by unpacking Paul’s question about setting up a self-managed super fund (SMSF) and whether his current balance is sufficient to make a property purchase viable within it. Stuart also reflects on the quality of Paul’s Melbourne townhouse investment and discusses how to assess whether a property is genuinely investment-grade. Paul’s second question around investing savings for his four young children prompts a broader discussion on smarter options beyond traditional bank accounts.

John’s situation leads to a compelling conversation around downsizing in retirement. Stuart evaluates John's unique plan of selling the family home, investing the proceeds into super, and renting to try different locations before settling permanently.

Other questions explored include what to consider when upgrading to a more premium home, the risks of holding off on selling your current home, and how to structure equity effectively. Stuart finishes the episode with a deep dive into Amelie’s property portfolio and how to optimise her $2.2 million in equity to build super and potentially upgrade to a better principal residence. A must-listen for property owners and planners alike.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17537295 Tue, 29 Jul 2025 05:00:00 +1000 1888 full false Ep 366: Boost your super balance by avoiding CGT for the rest of your life! Ep 366: Boost your super balance by avoiding CGT for the rest of your life! Read full blog here 

In this episode, Stuart takes a deep dive into one of the most misunderstood aspects of superannuation, how unrealised capital gains tax (CGT) affects your balance, and how to avoid it. He begins by explaining the irony of the government’s proposed tax on super balances over $3 million: while controversial, most Australians are already paying tax on unrealised gains daily via pooled super funds. Stuart breaks down how these products calculate unit prices and the role of future tax provisions in that process.

He then explores smarter alternatives, including wrap platforms and self-managed super funds (SMSFs), which allow investors to directly own assets and potentially eliminate CGT on unrealised gains altogether, provided they stay under the pension cap at retirement. Stuart walks through the financial modelling, showing how the fee trade-off still results in long-term gains, especially for high-contribution investors.

Listeners also learn about timing, portfolio turnover, and tax-saving potential across various life stages. He closes with a performance and fee comparison between pooled funds like Vanguard and wrap platforms, offering guidance on when the shift is worth it. This episode is essential listening for anyone serious about optimising their super and reducing tax drag over a lifetime.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here 

In this episode, Stuart takes a deep dive into one of the most misunderstood aspects of superannuation, how unrealised capital gains tax (CGT) affects your balance, and how to avoid it. He begins by explaining the irony of the government’s proposed tax on super balances over $3 million: while controversial, most Australians are already paying tax on unrealised gains daily via pooled super funds. Stuart breaks down how these products calculate unit prices and the role of future tax provisions in that process.

He then explores smarter alternatives, including wrap platforms and self-managed super funds (SMSFs), which allow investors to directly own assets and potentially eliminate CGT on unrealised gains altogether, provided they stay under the pension cap at retirement. Stuart walks through the financial modelling, showing how the fee trade-off still results in long-term gains, especially for high-contribution investors.

Listeners also learn about timing, portfolio turnover, and tax-saving potential across various life stages. He closes with a performance and fee comparison between pooled funds like Vanguard and wrap platforms, offering guidance on when the shift is worth it. This episode is essential listening for anyone serious about optimising their super and reducing tax drag over a lifetime.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17507023 Wed, 23 Jul 2025 05:00:00 +1000 2138 366 full false Q&A - Is no negative gearing a problem, when to use a family trust, it’s a ‘who’ not ‘what’ question Q&A - Is no negative gearing a problem, when to use a family trust, it’s a ‘who’ not ‘what’ question In this Q&A episode, Stuart tackles a wide range of complex financial and property questions from listeners navigating wealth-building decisions. He begins with a couple considering converting their first home into an investment property. Stuart breaks down the implications of their joint ownership structure, refinancing strategy, and whether they've missed the opportunity for negative gearing, providing insight into how high- and middle-income earners can best structure property portfolios.

He then addresses a nuanced question about the transfer of assets from a discretionary trust to a testamentary trust upon death. Stuart explains the differences, key considerations, and whether investing under a lower-income spouse’s name may offer more long-term estate planning benefits.

Next, Stuart analyzes a detailed case involving a Brisbane-based couple with a multi-million-dollar property portfolio, employee share schemes, and a retirement goal of $200K income in 10 years. He evaluates their asset base, capital growth assumptions, gearing levels, and whether their current strategy is sufficient to meet their goals.

Finally, Stuart reviews the future potential of two Sydney investment properties in Edgecliff and Mosman following changes to development zoning. He offers a framework for assessing heritage restrictions, supply risks, and ongoing demand in a shifting market. A rich, insightful episode for investors at all stages.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart tackles a wide range of complex financial and property questions from listeners navigating wealth-building decisions. He begins with a couple considering converting their first home into an investment property. Stuart breaks down the implications of their joint ownership structure, refinancing strategy, and whether they've missed the opportunity for negative gearing, providing insight into how high- and middle-income earners can best structure property portfolios.

He then addresses a nuanced question about the transfer of assets from a discretionary trust to a testamentary trust upon death. Stuart explains the differences, key considerations, and whether investing under a lower-income spouse’s name may offer more long-term estate planning benefits.

Next, Stuart analyzes a detailed case involving a Brisbane-based couple with a multi-million-dollar property portfolio, employee share schemes, and a retirement goal of $200K income in 10 years. He evaluates their asset base, capital growth assumptions, gearing levels, and whether their current strategy is sufficient to meet their goals.

Finally, Stuart reviews the future potential of two Sydney investment properties in Edgecliff and Mosman following changes to development zoning. He offers a framework for assessing heritage restrictions, supply risks, and ongoing demand in a shifting market. A rich, insightful episode for investors at all stages.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-17506963 Tue, 22 Jul 2025 05:00:00 +1000 2030 full false Ep 365: Employee share schemes- How to use them to build personal wealth Ep 365: Employee share schemes- How to use them to build personal wealth Read full blog here

In this episode, Stuart explores how to build personal wealth through employee share schemes (ESS), breaking down everything from RSUs and stock options to tax-effective strategies like salary sacrifice. He explains how shares vest, when and how they’re taxed, and the implications of holding versus selling. Stuart also highlights the importance of managing concentration risk and making informed decisions based on valuations, market conditions, and long-term goals.

Listeners will learn the difference between tax-deferred and taxed-upfront schemes, how to take advantage of the $5,000 salary sacrifice limit without triggering fringe benefits tax, and how to tactically reduce tax liabilities through transfers or strategic selling. Stuart offers clear insights on trading through issuer-sponsored share registries and outlines practical scenarios for divesting or retaining employee shares.

The episode concludes with a detailed response to a listener planning a two-year overseas move. Stuart reviews their investment properties, managed funds, super, and future home upgrade goals, offering a framework for managing surplus cash flow abroad, timing a principal place of residence purchase, and balancing debt, investment, and long-term security. This episode is packed with expert financial planning advice tailored for modern professionals navigating employee entitlements, tax laws, and international transitions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here

In this episode, Stuart explores how to build personal wealth through employee share schemes (ESS), breaking down everything from RSUs and stock options to tax-effective strategies like salary sacrifice. He explains how shares vest, when and how they’re taxed, and the implications of holding versus selling. Stuart also highlights the importance of managing concentration risk and making informed decisions based on valuations, market conditions, and long-term goals.

Listeners will learn the difference between tax-deferred and taxed-upfront schemes, how to take advantage of the $5,000 salary sacrifice limit without triggering fringe benefits tax, and how to tactically reduce tax liabilities through transfers or strategic selling. Stuart offers clear insights on trading through issuer-sponsored share registries and outlines practical scenarios for divesting or retaining employee shares.

The episode concludes with a detailed response to a listener planning a two-year overseas move. Stuart reviews their investment properties, managed funds, super, and future home upgrade goals, offering a framework for managing surplus cash flow abroad, timing a principal place of residence purchase, and balancing debt, investment, and long-term security. This episode is packed with expert financial planning advice tailored for modern professionals navigating employee entitlements, tax laws, and international transitions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17485641 Wed, 16 Jul 2025 05:00:00 +1000 1929 365 full false Q&A - Loan structures, how to minimise tax in retirement, why a property strategy won’t work Q&A - Loan structures, how to minimise tax in retirement, why a property strategy won’t work In this Q&A episode, Stuart dives into some of the most pressing financial questions on the minds of listeners, from retirement tax strategies to smart investing moves. He unpacks the intricacies of transferring UK pensions to Australia, outlining the key rules, common pitfalls, and how to reduce unnecessary fees. Stuart then breaks down savvy loan structures for purchasing property through a company, with tips on minimising capital gains tax in the process.

With retirement planning front and centre, he highlights the often-overlooked fact that the $2 million superannuation tax-free cap is indexed. He explains why this should be a vital part of your long-term financial strategy. Is an SMSF property play more powerful than sticking with a high-growth super fund? Stuart weighs the pros and cons, helping listeners assess which option aligns best with their goals.

To wrap up, he tackles a real-world dilemma: should you invest surplus funds into the share market or buy your future retirement home now? Stuart offers a clear, thoughtful framework to guide that choice. Whether you're planning for retirement or navigating your next big investment move, this episode is packed with practical insights to help you make smarter financial decisions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart dives into some of the most pressing financial questions on the minds of listeners, from retirement tax strategies to smart investing moves. He unpacks the intricacies of transferring UK pensions to Australia, outlining the key rules, common pitfalls, and how to reduce unnecessary fees. Stuart then breaks down savvy loan structures for purchasing property through a company, with tips on minimising capital gains tax in the process.

With retirement planning front and centre, he highlights the often-overlooked fact that the $2 million superannuation tax-free cap is indexed. He explains why this should be a vital part of your long-term financial strategy. Is an SMSF property play more powerful than sticking with a high-growth super fund? Stuart weighs the pros and cons, helping listeners assess which option aligns best with their goals.

To wrap up, he tackles a real-world dilemma: should you invest surplus funds into the share market or buy your future retirement home now? Stuart offers a clear, thoughtful framework to guide that choice. Whether you're planning for retirement or navigating your next big investment move, this episode is packed with practical insights to help you make smarter financial decisions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17483068 Tue, 15 Jul 2025 05:00:00 +1000 2074 full false Ep 364: Can annual property growth persist at 7% perpetually Ep 364: Can annual property growth persist at 7% perpetually Read full blog here.

In this insightful episode, Stuart Wemyss addresses a common investor question: Can Australian property values continue growing at 7% per year? He explains how compounding works over time and why adjusting future property values for inflation and income growth makes projections, like an $8 million home in 30 years, more relatable.

Stuart dives into the impact of income distribution, noting that the top 20% of Australians earn nearly half of all disposable income and experience faster wage growth. These high-income earners drive demand for blue-chip, investment-grade property, often located within 2 to 20 km of major CBDs, making such properties more likely to achieve strong long-term growth.

He challenges the idea that Australian property is broadly overvalued by focusing on geographic scarcity, population concentration, and the limitations of regional infrastructure investment. He also outlines several tailwinds that could boost property demand in the coming decade, including lower interest rates, superannuation tax changes, inheritance wealth, and reduced future equity returns.

Whether you're a long-term investor or simply seeking clarity on the sustainability of property price growth, Stuart offers a well-reasoned, practical perspective grounded in evidence and experience. Tune in to gain confidence in your investment decisions and understand the forces shaping Australia’s real estate landscape.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In this insightful episode, Stuart Wemyss addresses a common investor question: Can Australian property values continue growing at 7% per year? He explains how compounding works over time and why adjusting future property values for inflation and income growth makes projections, like an $8 million home in 30 years, more relatable.

Stuart dives into the impact of income distribution, noting that the top 20% of Australians earn nearly half of all disposable income and experience faster wage growth. These high-income earners drive demand for blue-chip, investment-grade property, often located within 2 to 20 km of major CBDs, making such properties more likely to achieve strong long-term growth.

He challenges the idea that Australian property is broadly overvalued by focusing on geographic scarcity, population concentration, and the limitations of regional infrastructure investment. He also outlines several tailwinds that could boost property demand in the coming decade, including lower interest rates, superannuation tax changes, inheritance wealth, and reduced future equity returns.

Whether you're a long-term investor or simply seeking clarity on the sustainability of property price growth, Stuart offers a well-reasoned, practical perspective grounded in evidence and experience. Tune in to gain confidence in your investment decisions and understand the forces shaping Australia’s real estate landscape.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17457956 Wed, 09 Jul 2025 05:00:00 +1000 1991 364 full false Q&A - Structuring $200k p.a. retirement income, a common strategy mistake, and defining investment-grade property. Q&A - Structuring $200k p.a. retirement income, a common strategy mistake, and defining investment-grade property.

In this insightful Q&A episode, Stuart Wemyss dives into three real-life financial questions that highlight the importance of strategic planning as retirement approaches. The episode begins with a deep dive into “Alex’s” situation a successful small business owner aiming to generate a $200,000 annual income in retirement. Stuart explores how Alex might structure assets post-business sale and whether selling an investment property could be necessary to meet income goals.

Next, Francois raises a question about fixing a less-than-ideal property ownership structure. Stuart uses this as a springboard to discuss a common trap: designing your financial strategy around existing assets, rather than letting a clear strategy guide asset selection and structure, especially important when tax and long-term efficiency are involved.

Finally, Stuart responds to Jason, who asks what defines an “investment-grade” property in Melbourne, and whether it’s realistic to buy one within an $850k–$900k budget in today’s market.

Whether you’re planning your retirement, refining your investment structure, or considering your next property purchase, this episode offers practical insights and timeless financial wisdom to help you make smarter, strategy-first decisions.

🎧 Click to listen now and discover what steps could bring you closer to financial freedom.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]>

In this insightful Q&A episode, Stuart Wemyss dives into three real-life financial questions that highlight the importance of strategic planning as retirement approaches. The episode begins with a deep dive into “Alex’s” situation a successful small business owner aiming to generate a $200,000 annual income in retirement. Stuart explores how Alex might structure assets post-business sale and whether selling an investment property could be necessary to meet income goals.

Next, Francois raises a question about fixing a less-than-ideal property ownership structure. Stuart uses this as a springboard to discuss a common trap: designing your financial strategy around existing assets, rather than letting a clear strategy guide asset selection and structure, especially important when tax and long-term efficiency are involved.

Finally, Stuart responds to Jason, who asks what defines an “investment-grade” property in Melbourne, and whether it’s realistic to buy one within an $850k–$900k budget in today’s market.

Whether you’re planning your retirement, refining your investment structure, or considering your next property purchase, this episode offers practical insights and timeless financial wisdom to help you make smarter, strategy-first decisions.

🎧 Click to listen now and discover what steps could bring you closer to financial freedom.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17462558 Tue, 08 Jul 2025 08:00:00 +1000 1844 full false Ep 363: What are the best, safe, income-style investment options? Ep 363: What are the best, safe, income-style investment options? Read full blog here.

In this insightful episode, Stuart Wemyss explores the safest, most reliable income-generating investment options for risk-averse investors or those with short investment horizons. He begins by highlighting why fixed income investments deserve more attention, especially for portfolio stability, retirees, or anyone with a low risk tolerance.

Stuart presents a clear hierarchy of choices, starting with mortgage offset accounts as the most efficient, risk-free return option, often outperforming taxable investments on a net basis. He then explores term deposits, which are secure but less appealing given flat interest rate curves.

Next, he dives into fixed income ETFs, breaking them into categories: government bonds (like VGB), corporate bonds (such as CRED and HCRD), composite ETFs, and hybrid securities (like BHYB), which blend the features of shares and bonds for higher income. These options provide dependable yields (4–6.7% p.a.) with varying degrees of risk and liquidity.

Stuart also touches on alternative investments like unlisted mortgage and private credit funds but warns they often carry more risk, lack transparency, and may offer marginally higher returns not worth the trade-off.

If you're seeking steady, low-risk income from your investments, this episode is packed with practical, evidence-based strategies to help you make informed decisions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In this insightful episode, Stuart Wemyss explores the safest, most reliable income-generating investment options for risk-averse investors or those with short investment horizons. He begins by highlighting why fixed income investments deserve more attention, especially for portfolio stability, retirees, or anyone with a low risk tolerance.

Stuart presents a clear hierarchy of choices, starting with mortgage offset accounts as the most efficient, risk-free return option, often outperforming taxable investments on a net basis. He then explores term deposits, which are secure but less appealing given flat interest rate curves.

Next, he dives into fixed income ETFs, breaking them into categories: government bonds (like VGB), corporate bonds (such as CRED and HCRD), composite ETFs, and hybrid securities (like BHYB), which blend the features of shares and bonds for higher income. These options provide dependable yields (4–6.7% p.a.) with varying degrees of risk and liquidity.

Stuart also touches on alternative investments like unlisted mortgage and private credit funds but warns they often carry more risk, lack transparency, and may offer marginally higher returns not worth the trade-off.

If you're seeking steady, low-risk income from your investments, this episode is packed with practical, evidence-based strategies to help you make informed decisions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17431597 Wed, 02 Jul 2025 05:00:00 +1000 1925 363 full false Q&A: Property negotiation, retirement planning, home upgrade and more... Q&A: Property negotiation, retirement planning, home upgrade and more... In this Q&A episode, Campbell unpacks a range of nuanced financial scenarios submitted by listeners grappling with how to best use their wealth, equity, and income to build a stronger financial future. The central theme revolves around one of the most common dilemmas: when your wealth is mostly tied up in property, what’s the next strategic step?

Whether it’s deciding whether to chase a dream home post-auction, restructure assets for retirement, or explore SMSFs as a way to diversify and leverage superannuation, Campbell cuts through the noise with practical, numbers-driven advice. He discusses the real cost of holding underperforming investments, how to assess whether an advisor is actually adding value, and the common pitfalls of over-contributing to super when tax benefits are marginal.

For listeners who’ve built up significant property equity but now want more lifestyle freedom, Campbell provides guidance on when to upgrade your home, when to walk away from additional property investment, and how to think about risk-adjusted returns from ETFs versus real estate. This episode is a must-listen for anyone balancing ambition with lifestyle, and aiming to make smart, long-term decisions that align with both financial security and personal fulfilment.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Campbell unpacks a range of nuanced financial scenarios submitted by listeners grappling with how to best use their wealth, equity, and income to build a stronger financial future. The central theme revolves around one of the most common dilemmas: when your wealth is mostly tied up in property, what’s the next strategic step?

Whether it’s deciding whether to chase a dream home post-auction, restructure assets for retirement, or explore SMSFs as a way to diversify and leverage superannuation, Campbell cuts through the noise with practical, numbers-driven advice. He discusses the real cost of holding underperforming investments, how to assess whether an advisor is actually adding value, and the common pitfalls of over-contributing to super when tax benefits are marginal.

For listeners who’ve built up significant property equity but now want more lifestyle freedom, Campbell provides guidance on when to upgrade your home, when to walk away from additional property investment, and how to think about risk-adjusted returns from ETFs versus real estate. This episode is a must-listen for anyone balancing ambition with lifestyle, and aiming to make smart, long-term decisions that align with both financial security and personal fulfilment.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Campbell Wallace Buzzsprout-17425049 Tue, 01 Jul 2025 05:00:00 +1000 2265 full false Ep 362: 4 property (evidence-based) golden rules Ep 362: 4 property (evidence-based) golden rules Read full blog here.

In this episode, Stuart Wemyss distils insights from over a decade and 150+ blogs into four golden, evidence-based rules for successful property investing. He begins with the foundational principle: prioritise capital growth over income when buying, focusing on high-quality, investment-grade assets in tightly held, established suburbs. Income, he explains, can be improved later, but land location is forever.

Rule two highlights the importance of understanding property cycles, and timing your purchases to coincide with upcoming growth phases can dramatically fast-track wealth building. Drawing on real client case studies from Brisbane, Stuart illustrates how identifying the right cycle makes a significant difference.

Next, he breaks down the math behind wealth accumulation, leveraging full borrowings, negative gearing, and compounding capital growth to create outsized long-term returns. He contrasts property with shares to explain why property is often the better vehicle for gearing.

Finally, Stuart stresses future buyer capacity; understanding who will be able to afford your property in 10, 20, or 30 years is key to selecting high-performance assets. He unpacks the roles of credit policy, urban sprawl, and wealth inequality in fuelling long-term growth.

This episode is a must-listen for anyone serious about building long-term wealth through strategic property investing.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In this episode, Stuart Wemyss distils insights from over a decade and 150+ blogs into four golden, evidence-based rules for successful property investing. He begins with the foundational principle: prioritise capital growth over income when buying, focusing on high-quality, investment-grade assets in tightly held, established suburbs. Income, he explains, can be improved later, but land location is forever.

Rule two highlights the importance of understanding property cycles, and timing your purchases to coincide with upcoming growth phases can dramatically fast-track wealth building. Drawing on real client case studies from Brisbane, Stuart illustrates how identifying the right cycle makes a significant difference.

Next, he breaks down the math behind wealth accumulation, leveraging full borrowings, negative gearing, and compounding capital growth to create outsized long-term returns. He contrasts property with shares to explain why property is often the better vehicle for gearing.

Finally, Stuart stresses future buyer capacity; understanding who will be able to afford your property in 10, 20, or 30 years is key to selecting high-performance assets. He unpacks the roles of credit policy, urban sprawl, and wealth inequality in fuelling long-term growth.

This episode is a must-listen for anyone serious about building long-term wealth through strategic property investing.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17391141 Wed, 25 Jun 2025 05:00:00 +1000 2041 362 full false Q&A: What to do if most of your wealth is in property; update home or invest? Q&A: What to do if most of your wealth is in property; update home or invest? In this Q&A episode, Stuart tackles one of the most pressing challenges facing many Australians today: how to make smart financial moves when most of your wealth is tied up in property. He explores the tension between long-term investment strategy and short-term lifestyle pressure, helping listeners find a better balance between financial progress and personal well-being. From assessing whether a self-managed super fund (SMSF) is a wise move to managing multiple investment properties with tight cash flow, Stuart offers clear, strategic thinking on how to future-proof your finances while reducing financial stress.

He also delves into key questions like whether to upgrade your home or invest further, how to think about property versus shares in a changing market, and the value of liquidity and flexibility as you approach retirement. Throughout, Stuart keeps the focus practical and empathetic, guiding listeners through complex decisions with clarity and a long-term lens.

If you’re trying to decide what to do with your next investment dollar, wondering whether to hold or sell, or simply aiming for more freedom without sacrificing your financial future, this episode is packed with insights to help you move forward with confidence.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart tackles one of the most pressing challenges facing many Australians today: how to make smart financial moves when most of your wealth is tied up in property. He explores the tension between long-term investment strategy and short-term lifestyle pressure, helping listeners find a better balance between financial progress and personal well-being. From assessing whether a self-managed super fund (SMSF) is a wise move to managing multiple investment properties with tight cash flow, Stuart offers clear, strategic thinking on how to future-proof your finances while reducing financial stress.

He also delves into key questions like whether to upgrade your home or invest further, how to think about property versus shares in a changing market, and the value of liquidity and flexibility as you approach retirement. Throughout, Stuart keeps the focus practical and empathetic, guiding listeners through complex decisions with clarity and a long-term lens.

If you’re trying to decide what to do with your next investment dollar, wondering whether to hold or sell, or simply aiming for more freedom without sacrificing your financial future, this episode is packed with insights to help you move forward with confidence.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17383724 Tue, 24 Jun 2025 05:00:00 +1000 1838 full false Ep 361: How does Vanguard Super stack up? Ep 361: How does Vanguard Super stack up? Read full blog here.

In this episode, Stuart breaks from tradition to deliver an exclusive review of Vanguard Super, Vanguard’s bold foray into the Australian superannuation market. Known for his commitment to independence and strategy-first insights, Stuart explores why Vanguard’s entry could be a game-changer for Australians dissatisfied with the opaque and politically entangled operations of traditional industry super funds. He delves into Vanguard’s unique not-for-profit structure, ultra-low fees, tech-forward administration through Grow Inc., and its world-class investment expertise. 

While Vanguard Super is still small, its rapid growth and financial sustainability signal promising potential. Stuart also offers a deep dive into Vanguard’s investment options, explains why he recommends the High Growth option for long-term investors and compares fees with heavyweights like AustralianSuper and UniSuper, revealing a clear cost advantage. He even tackles often-overlooked areas like insurance quality and tax implications of pooled vs. non-pooled products. 

If you're exploring superannuation alternatives or want expert insight into how Vanguard stacks up, this episode is packed with analysis you won’t want to miss.


Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In this episode, Stuart breaks from tradition to deliver an exclusive review of Vanguard Super, Vanguard’s bold foray into the Australian superannuation market. Known for his commitment to independence and strategy-first insights, Stuart explores why Vanguard’s entry could be a game-changer for Australians dissatisfied with the opaque and politically entangled operations of traditional industry super funds. He delves into Vanguard’s unique not-for-profit structure, ultra-low fees, tech-forward administration through Grow Inc., and its world-class investment expertise. 

While Vanguard Super is still small, its rapid growth and financial sustainability signal promising potential. Stuart also offers a deep dive into Vanguard’s investment options, explains why he recommends the High Growth option for long-term investors and compares fees with heavyweights like AustralianSuper and UniSuper, revealing a clear cost advantage. He even tackles often-overlooked areas like insurance quality and tax implications of pooled vs. non-pooled products. 

If you're exploring superannuation alternatives or want expert insight into how Vanguard stacks up, this episode is packed with analysis you won’t want to miss.


Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17353380 Wed, 18 Jun 2025 05:00:00 +1000 1883 361 full false Q&A: Investment planning when cash flow is uncertain, when to buy forever home and more... Q&A: Investment planning when cash flow is uncertain, when to buy forever home and more... In this Q&A episode, Stuart dives into real-life financial dilemmas from listeners navigating pivotal moments in their wealth journeys. Daniel, a self-employed father of three, outlines his comprehensive plan to retire at 60 with $100k passive income, using property, super, and ETFs. Stuart unpacks the nuances of risk mitigation when income is uncertain and weighs in on a Geelong investment property. An anonymous listener from Perth wants to buy their “forever home” in 7–10 years and seeks advice on how to balance their growing family with smart asset leverage. K, facing a windfall of inheritance, asks about the best long-term ETF strategy in a volatile market, and Stuart offers perspective on diversification and timing. Finally, Blair and Robyn wrestle with whether to sell and upgrade their Sunshine Coast home before moving to New Zealand, trying to predict growth and manage cash flow with future repatriation plans. Stuart brings thoughtful insights to each case, blending strategy, realism, and empathy—perfect for anyone planning for property, retirement, or investment in uncertain times. Tune in for practical takeaways and sharp commentary!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart dives into real-life financial dilemmas from listeners navigating pivotal moments in their wealth journeys. Daniel, a self-employed father of three, outlines his comprehensive plan to retire at 60 with $100k passive income, using property, super, and ETFs. Stuart unpacks the nuances of risk mitigation when income is uncertain and weighs in on a Geelong investment property. An anonymous listener from Perth wants to buy their “forever home” in 7–10 years and seeks advice on how to balance their growing family with smart asset leverage. K, facing a windfall of inheritance, asks about the best long-term ETF strategy in a volatile market, and Stuart offers perspective on diversification and timing. Finally, Blair and Robyn wrestle with whether to sell and upgrade their Sunshine Coast home before moving to New Zealand, trying to predict growth and manage cash flow with future repatriation plans. Stuart brings thoughtful insights to each case, blending strategy, realism, and empathy—perfect for anyone planning for property, retirement, or investment in uncertain times. Tune in for practical takeaways and sharp commentary!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17329337 Tue, 17 Jun 2025 05:00:00 +1000 2167 full false Ep 360: Factors to consider when setting a property budget Ep 360: Factors to consider when setting a property budget Read full blog here.

In this episode, Campbell Wallace explores one of the most crucial steps in any property journey: setting the right budget.

He breaks the process into two key questions, how much you can borrow vs. how much you should borrow, and explains why borrowing capacity alone shouldn't drive your decision.

Campbell outlines:

  • How to calculate a sustainable borrowing limit based on your surplus investable cash flow
  • When it might make sense to borrow to your full capacity, especially for younger investors with a long time horizon
  • Why property quality should trump quantity, and how to avoid false economies with your home purchase
  • The risks of under borrowing or compromising too much on asset quality
  • How other factors like super contributions, diversification, and age should influence your investment approach

He also warns against letting location dictate your budget and shares the golden rule: budget first, property second. Plus, a reminder not to ask your barber if you need a haircut—always be mindful of biased advice.

If you're thinking about your next property purchase, this episode will help you set a smart, strategy-aligned budget that supports your long-term wealth goals.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In this episode, Campbell Wallace explores one of the most crucial steps in any property journey: setting the right budget.

He breaks the process into two key questions, how much you can borrow vs. how much you should borrow, and explains why borrowing capacity alone shouldn't drive your decision.

Campbell outlines:

  • How to calculate a sustainable borrowing limit based on your surplus investable cash flow
  • When it might make sense to borrow to your full capacity, especially for younger investors with a long time horizon
  • Why property quality should trump quantity, and how to avoid false economies with your home purchase
  • The risks of under borrowing or compromising too much on asset quality
  • How other factors like super contributions, diversification, and age should influence your investment approach

He also warns against letting location dictate your budget and shares the golden rule: budget first, property second. Plus, a reminder not to ask your barber if you need a haircut—always be mindful of biased advice.

If you're thinking about your next property purchase, this episode will help you set a smart, strategy-aligned budget that supports your long-term wealth goals.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Campbell Wallace Buzzsprout-17314117 Wed, 11 Jun 2025 05:00:00 +1000 2347 360 full false Q&A: Adjust ETF cost base annually, help kids into property, asset allocation in retirement and more... Q&A: Adjust ETF cost base annually, help kids into property, asset allocation in retirement and more... In this Q&A episode, Stuart addresses a wide range of listener questions, from technical ETF tax adjustments to retirement planning strategies using superannuation.

He starts by explaining how ETF investors need to account for AMIT cost base adjustments when calculating capital gains tax—an often overlooked detail that could mean paying more tax than necessary. He breaks down what AMIT is and why it matters for investors who regularly receive ETF tax statements.

Next, Stuart gives thoughtful advice on helping children into the property market, tackling the challenges of managing differing time horizons and property goals across siblings. He outlines a balanced approach to structuring property purchases with long-term capital growth in mind.

He also responds to a listener planning to move to Brisbane and build a home while selling underperforming investment properties. Stuart discusses how to balance serviceability, construction timing, and preserving cash against inflation.

Finally, he covers asset allocation in retirement, addressing whether it’s risky to have all super invested in a lifecycle fund when to consider diversifying into property and whether cash buffers are needed for market downturns.

This is a helpful episode for anyone navigating wealth building, tax strategy, or long-term planning.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart addresses a wide range of listener questions, from technical ETF tax adjustments to retirement planning strategies using superannuation.

He starts by explaining how ETF investors need to account for AMIT cost base adjustments when calculating capital gains tax—an often overlooked detail that could mean paying more tax than necessary. He breaks down what AMIT is and why it matters for investors who regularly receive ETF tax statements.

Next, Stuart gives thoughtful advice on helping children into the property market, tackling the challenges of managing differing time horizons and property goals across siblings. He outlines a balanced approach to structuring property purchases with long-term capital growth in mind.

He also responds to a listener planning to move to Brisbane and build a home while selling underperforming investment properties. Stuart discusses how to balance serviceability, construction timing, and preserving cash against inflation.

Finally, he covers asset allocation in retirement, addressing whether it’s risky to have all super invested in a lifecycle fund when to consider diversifying into property and whether cash buffers are needed for market downturns.

This is a helpful episode for anyone navigating wealth building, tax strategy, or long-term planning.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17307288 Tue, 10 Jun 2025 05:00:00 +1000 1862 full false Ep 359: How bad does a property need to be to warrant selling it? Ep 359: How bad does a property need to be to warrant selling it? New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart tackles a tricky but important question: how bad does a property need to be to justify selling it?

If you suspect a property in your portfolio isn't investment-grade, Stuart walks through a step-by-step process to assess whether replacing it could make you significantly better off—after factoring in selling costs, stamp duty, buyer’s agent fees, and capital gains tax.

He explains how to:

  • Estimate your current property’s future return
  • Set a realistic benchmark for what investment-grade property should deliver (2% yield + 7% capital growth)
  • Weigh opportunity cost and transactional expenses
  • Use detailed scenario modelling to compare long-term wealth outcomes

He also highlights key questions to consider before making a decision:

  • Can you afford to upgrade to a superior asset?
  • Will underperformance materially impact your retirement plans?
  • Do you have enough time before retirement to justify the switch?
  • Could you hedge by buying a better asset now and selling the underperformer later?

This episode is packed with real numbers, smart frameworks, and cautionary insights. If you're unsure whether to hold or sell a lagging property, this is essential listening.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart tackles a tricky but important question: how bad does a property need to be to justify selling it?

If you suspect a property in your portfolio isn't investment-grade, Stuart walks through a step-by-step process to assess whether replacing it could make you significantly better off—after factoring in selling costs, stamp duty, buyer’s agent fees, and capital gains tax.

He explains how to:

  • Estimate your current property’s future return
  • Set a realistic benchmark for what investment-grade property should deliver (2% yield + 7% capital growth)
  • Weigh opportunity cost and transactional expenses
  • Use detailed scenario modelling to compare long-term wealth outcomes

He also highlights key questions to consider before making a decision:

  • Can you afford to upgrade to a superior asset?
  • Will underperformance materially impact your retirement plans?
  • Do you have enough time before retirement to justify the switch?
  • Could you hedge by buying a better asset now and selling the underperformer later?

This episode is packed with real numbers, smart frameworks, and cautionary insights. If you're unsure whether to hold or sell a lagging property, this is essential listening.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17275168 Wed, 04 Jun 2025 05:00:00 +1000 1946 359 full false Q&A: My target audience, investing in US domicile ETFs and whether to repay P&I to minimise interest rate... Q&A: My target audience, investing in US domicile ETFs and whether to repay P&I to minimise interest rate... In this Q&A episode, Stuart explores whether his financial strategies apply broadly or mainly to wealthier Australians, responding to recent data showing few households have $2M+ in super. He explains how his goal is to equip a wide range of listeners to make better decisions, regardless of starting point, and why aiming high with financial goals can still be relevant and motivating.

He also answers a question on US-domiciled ETFs, covering tax implications, currency risk, and whether Irish-domiciled UCITS ETFs can provide a more efficient option for long-term Australian investors. He discusses how income, reporting, and capital gains are treated, and clarifies some common misconceptions.

Next, Stuart tackles whether it’s worth switching investment property loans from interest-only to principal and interest, weighing the opportunity cost of redirecting cash flow toward debt versus other investments or paying down a PPR loan.

Finally, a listener outlines their detailed financial plan and asks if they should stretch their home budget, buy an investment property, or stay the course with ETF investing and super. Stuart walks through key considerations around private school costs, inheritance timing, and borrowing strategy.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart explores whether his financial strategies apply broadly or mainly to wealthier Australians, responding to recent data showing few households have $2M+ in super. He explains how his goal is to equip a wide range of listeners to make better decisions, regardless of starting point, and why aiming high with financial goals can still be relevant and motivating.

He also answers a question on US-domiciled ETFs, covering tax implications, currency risk, and whether Irish-domiciled UCITS ETFs can provide a more efficient option for long-term Australian investors. He discusses how income, reporting, and capital gains are treated, and clarifies some common misconceptions.

Next, Stuart tackles whether it’s worth switching investment property loans from interest-only to principal and interest, weighing the opportunity cost of redirecting cash flow toward debt versus other investments or paying down a PPR loan.

Finally, a listener outlines their detailed financial plan and asks if they should stretch their home budget, buy an investment property, or stay the course with ETF investing and super. Stuart walks through key considerations around private school costs, inheritance timing, and borrowing strategy.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17268448 Tue, 03 Jun 2025 05:00:00 +1000 2157 full false Ep 358: How much wealth is enough? Ep 358: How much wealth is enough? Register for live event on 28 May at 7pm

New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart tackles one of the most important financial planning questions: how much is enough? He shares his personal philosophy—invest just enough to meet your goals comfortably, but no more—and reminds listeners that wealth is a means to enjoy life, not just a number to chase.

Stuart explains how to think about wealth targets, offering a clear framework for calculating how much you need to fund different retirement lifestyles. He covers:

  • How to plan around supercaps and tax-free thresholds
  • What to do with property in retirement
  • Why you should consider reducing property exposure and using super for tax efficiency
  • When to invest more, and when to start spending

He also addresses the mental challenge of switching from saver to spender, and why starting early—even with small amounts—makes a big difference.

Whether you’re in your 30s, 50s, or already retired, this episode offers a grounded, practical, and values-based approach to wealth building. Tune in to rethink your goals, reset your expectations, and align your money with your life.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Register for live event on 28 May at 7pm

New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart tackles one of the most important financial planning questions: how much is enough? He shares his personal philosophy—invest just enough to meet your goals comfortably, but no more—and reminds listeners that wealth is a means to enjoy life, not just a number to chase.

Stuart explains how to think about wealth targets, offering a clear framework for calculating how much you need to fund different retirement lifestyles. He covers:

  • How to plan around supercaps and tax-free thresholds
  • What to do with property in retirement
  • Why you should consider reducing property exposure and using super for tax efficiency
  • When to invest more, and when to start spending

He also addresses the mental challenge of switching from saver to spender, and why starting early—even with small amounts—makes a big difference.

Whether you’re in your 30s, 50s, or already retired, this episode offers a grounded, practical, and values-based approach to wealth building. Tune in to rethink your goals, reset your expectations, and align your money with your life.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17231124 Wed, 28 May 2025 05:00:00 +1000 1937 358 full false Q&A: Co-investing in property considerations, selling property to adult children, rebalancing portfolios and more... Q&A: Co-investing in property considerations, selling property to adult children, rebalancing portfolios and more... Register for live event on 28 May at 7pm

In this Q&A episode, Stuart dives into questions around co-investing in property with family, selling to adult children, managing tax exposure, and adjusting share portfolios amid market volatility.

He begins by exploring the complexities of joint property ownership among siblings, highlighting the importance of equal ownership, clear legal structures, and protective clauses to manage risk, especially around relationship breakdowns or financial stress. He also covers how to structure a family property when parents will live in it, including handling rental income and tax compliance.

Next, Stuart responds to a parent considering selling 50% of an investment property to their daughter and her partner. He explains the capital gains tax and structuring implications, and whether the strategy is a sound path toward intergenerational wealth transfer.

The episode also features guidance on portfolio rebalancing in volatile markets, including whether to reduce concentrated holdings or invest in emerging market ETFs—plus a few fund suggestions for those looking at Asia.

Lastly, Stuart clarifies the six-year CGT exemption rule and answers a property strategy question for a couple struggling to balance rentvesting, affordability, and long-term home ownership.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Register for live event on 28 May at 7pm

In this Q&A episode, Stuart dives into questions around co-investing in property with family, selling to adult children, managing tax exposure, and adjusting share portfolios amid market volatility.

He begins by exploring the complexities of joint property ownership among siblings, highlighting the importance of equal ownership, clear legal structures, and protective clauses to manage risk, especially around relationship breakdowns or financial stress. He also covers how to structure a family property when parents will live in it, including handling rental income and tax compliance.

Next, Stuart responds to a parent considering selling 50% of an investment property to their daughter and her partner. He explains the capital gains tax and structuring implications, and whether the strategy is a sound path toward intergenerational wealth transfer.

The episode also features guidance on portfolio rebalancing in volatile markets, including whether to reduce concentrated holdings or invest in emerging market ETFs—plus a few fund suggestions for those looking at Asia.

Lastly, Stuart clarifies the six-year CGT exemption rule and answers a property strategy question for a couple struggling to balance rentvesting, affordability, and long-term home ownership.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17228082 Tue, 27 May 2025 05:00:00 +1000 2109 full false Ep 357: Resurgence of investment-grade apartment prices in Melbourne Ep 357: Resurgence of investment-grade apartment prices in Melbourne Register for live event on 28 May at 7pm

New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart revisits a call he made nearly five years ago—that investment-grade apartments in Melbourne were due for a growth cycle. After a long period of underperformance, the signs are finally pointing to a market turning point.

He outlines the key forces driving a potential resurgence:

  • New apartment supply is not keeping up with population growth
  • Construction costs are up 30%, raising replacement costs and limiting new stock
  • Expanded government incentives like the First Home Guarantee will supercharge demand
  • Falling interest rates and relaxed HELP debt rules are boosting borrowing capacity
  • Melbourne’s apartment prices look historically cheap compared to both houses and other capital cities

Stuart also draws a comparison to Brisbane, where apartment prices surged nearly 60% after a 13-year flat spell. Could Melbourne be next? A recent sale in Hawthorn may already be hinting at a shift.

If you've been holding an investment-grade apartment or are considering entering the market, this episode is packed with data, strategy, and timing insights. Tune in to understand why the next growth phase could be closer than you think.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Register for live event on 28 May at 7pm

New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart revisits a call he made nearly five years ago—that investment-grade apartments in Melbourne were due for a growth cycle. After a long period of underperformance, the signs are finally pointing to a market turning point.

He outlines the key forces driving a potential resurgence:

  • New apartment supply is not keeping up with population growth
  • Construction costs are up 30%, raising replacement costs and limiting new stock
  • Expanded government incentives like the First Home Guarantee will supercharge demand
  • Falling interest rates and relaxed HELP debt rules are boosting borrowing capacity
  • Melbourne’s apartment prices look historically cheap compared to both houses and other capital cities

Stuart also draws a comparison to Brisbane, where apartment prices surged nearly 60% after a 13-year flat spell. Could Melbourne be next? A recent sale in Hawthorn may already be hinting at a shift.

If you've been holding an investment-grade apartment or are considering entering the market, this episode is packed with data, strategy, and timing insights. Tune in to understand why the next growth phase could be closer than you think.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17197401 Wed, 21 May 2025 05:00:00 +1000 1848 357 full false Q&A: Whether to sell ungeared property, property equity funding retirement, property strategy in Sydney... Q&A: Whether to sell ungeared property, property equity funding retirement, property strategy in Sydney... Register for live event on 28 May at 7pm

In this Q&A episode, Stuart explores whether it's worth holding low- or ungeared property investments when shares often offer higher returns. He explains why opportunity cost matters—but also why property’s stability, tax treatment, and long-term compounding still make it a valuable part of a diversified portfolio.

He also answers a common question: if you don’t plan to sell your investment properties, how do you turn that equity into cash flow in retirement? Stuart outlines several strategies, including using offsets, redrawing, or modest leverage to access equity without selling.

The episode then shifts to property strategy, with a listener debating whether to buy now in Sydney, wait to purchase in their ideal suburb or invest interstate. Stuart unpacks the trade-offs between negative gearing, borrowing limits, and timing the market.

Finally, he responds to a listener deciding whether to sell a Geelong property to buy in Queensland or hold it under the six-year rule while rentvesting.

Whether you’re managing equity-rich properties, planning a home upgrade, or navigating high interest rates, this episode offers practical, thoughtful strategies to help guide your next move.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Register for live event on 28 May at 7pm

In this Q&A episode, Stuart explores whether it's worth holding low- or ungeared property investments when shares often offer higher returns. He explains why opportunity cost matters—but also why property’s stability, tax treatment, and long-term compounding still make it a valuable part of a diversified portfolio.

He also answers a common question: if you don’t plan to sell your investment properties, how do you turn that equity into cash flow in retirement? Stuart outlines several strategies, including using offsets, redrawing, or modest leverage to access equity without selling.

The episode then shifts to property strategy, with a listener debating whether to buy now in Sydney, wait to purchase in their ideal suburb or invest interstate. Stuart unpacks the trade-offs between negative gearing, borrowing limits, and timing the market.

Finally, he responds to a listener deciding whether to sell a Geelong property to buy in Queensland or hold it under the six-year rule while rentvesting.

Whether you’re managing equity-rich properties, planning a home upgrade, or navigating high interest rates, this episode offers practical, thoughtful strategies to help guide your next move.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17190463 Tue, 20 May 2025 05:00:00 +1000 1906 full false Ep 356: How to choose an investment option in super Ep 356: How to choose an investment option in super Register for live event on 28 May at 7pm

New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart shares practical advice for one of the most important superannuation decisions you'll make: how to invest your super once you've chosen your fund.

He explains the differences between pre-mixed investment options like Conservative, Balanced, Growth, and High Growth, and why you can't always trust the label. Some “Balanced” options are really aggressive, so always check the underlying asset allocation.

Stuart breaks down the two key factors to consider: your time horizon and your risk tolerance. If you're under 50, the evidence clearly shows that growth assets (like shares and property) outperform over the long term—even if they’re more volatile. For those not accessing super for decades, that volatility is worth enduring.

He also warns against common mistakes like mixing investment options, trying to manage your own asset allocation, or using DIY investment tools without advice. Instead, he recommends choosing one pre-mixed option that matches your goals and sticking with it.

Whether you're just starting out or approaching retirement, this episode will help you make a smarter, evidence-based choice for your super. Tune in and take control of your long-term financial future.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Register for live event on 28 May at 7pm

New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart shares practical advice for one of the most important superannuation decisions you'll make: how to invest your super once you've chosen your fund.

He explains the differences between pre-mixed investment options like Conservative, Balanced, Growth, and High Growth, and why you can't always trust the label. Some “Balanced” options are really aggressive, so always check the underlying asset allocation.

Stuart breaks down the two key factors to consider: your time horizon and your risk tolerance. If you're under 50, the evidence clearly shows that growth assets (like shares and property) outperform over the long term—even if they’re more volatile. For those not accessing super for decades, that volatility is worth enduring.

He also warns against common mistakes like mixing investment options, trying to manage your own asset allocation, or using DIY investment tools without advice. Instead, he recommends choosing one pre-mixed option that matches your goals and sticking with it.

Whether you're just starting out or approaching retirement, this episode will help you make a smarter, evidence-based choice for your super. Tune in and take control of your long-term financial future.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17153138 Wed, 14 May 2025 05:00:00 +1000 1957 356 full false Q&A: When to increase super contributions, offset or redraw, super or property and more… Q&A: When to increase super contributions, offset or redraw, super or property and more… In this Q&A podcast episode, Stuart tackles timely questions on super contributions, property strategy, and how to structure wealth to optimise flexibility, returns, and tax outcomes—particularly as retirement nears.

Jack opened the episode with a practical question about offset accounts versus redraw facilities. As he approaches retirement, he's focused on maximising flexibility and wanted clarification on how each structure works, especially with salary deposits, credit card repayments, and long-term access to funds.

George, aged 58, sought guidance on how to best deploy $260,000 in spare cash after selling a Queensland investment property. Stuart explores the pros and cons of contributing to super (both concessional and non-concessional), buying property (including the impact of Melbourne’s land tax), or investing in ETFs—especially during periods of market volatility. George’s goal is to retire at 62, and Stuart offers a strategy that balances growth potential with tax efficiency.

Shan and his wife, both in their mid-30s, wanted to understand when it makes sense to increase super contributions, given they already have a mortgage-free home and neutral investment properties. Stuart outlines the questions young families should ask when weighing super versus other wealth-building paths during their peak earning years.

Pat, 32 and a company director asked when a family trust becomes more beneficial than investing personally. With a growing share portfolio, he wanted clarity on the cost-benefit tipping point for using a trust structure—especially in a down market where transferring assets might carry lower CGT.

Finally, Vanessa explored whether to use inherited funds to purchase a property within super or invest in ETFs now and contribute later. Stuart shares general insights on liquidity, long-term growth, and the trade-offs between inside and outside super environments.

If you’re weighing super, property, ETFs or trust structures—or trying to figure out when to dial up your retirement strategy—this episode is packed with valuable insights.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A podcast episode, Stuart tackles timely questions on super contributions, property strategy, and how to structure wealth to optimise flexibility, returns, and tax outcomes—particularly as retirement nears.

Jack opened the episode with a practical question about offset accounts versus redraw facilities. As he approaches retirement, he's focused on maximising flexibility and wanted clarification on how each structure works, especially with salary deposits, credit card repayments, and long-term access to funds.

George, aged 58, sought guidance on how to best deploy $260,000 in spare cash after selling a Queensland investment property. Stuart explores the pros and cons of contributing to super (both concessional and non-concessional), buying property (including the impact of Melbourne’s land tax), or investing in ETFs—especially during periods of market volatility. George’s goal is to retire at 62, and Stuart offers a strategy that balances growth potential with tax efficiency.

Shan and his wife, both in their mid-30s, wanted to understand when it makes sense to increase super contributions, given they already have a mortgage-free home and neutral investment properties. Stuart outlines the questions young families should ask when weighing super versus other wealth-building paths during their peak earning years.

Pat, 32 and a company director asked when a family trust becomes more beneficial than investing personally. With a growing share portfolio, he wanted clarity on the cost-benefit tipping point for using a trust structure—especially in a down market where transferring assets might carry lower CGT.

Finally, Vanessa explored whether to use inherited funds to purchase a property within super or invest in ETFs now and contribute later. Stuart shares general insights on liquidity, long-term growth, and the trade-offs between inside and outside super environments.

If you’re weighing super, property, ETFs or trust structures—or trying to figure out when to dial up your retirement strategy—this episode is packed with valuable insights.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17145680 Tue, 13 May 2025 05:00:00 +1000 1896 full false Ep 355: Property ownership in personal names - factors to consider Ep 355: Property ownership in personal names - factors to consider New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart breaks down the key factors to consider when owning property in your personal name. While it is the most common structure among investors, there are important decisions to make that can have a lasting impact on your tax outcomes, cash flow, and asset protection.

He outlines the three main ownership options: sole ownership, joint ownership, and tenants-in-common. Each structure comes with its own benefits. For example, sole ownership may maximise negative gearing if one spouse has a higher income, while a tenants-in-common split can be tailored for tax efficiency and cash management.

Stuart also explains how ownership affects land tax thresholds, capital gains tax, and estate planning. He shares strategies using offset accounts to optimise loan structure, particularly for couples with uneven incomes.

When it comes to your family home, Stuart covers when asset protection or future investment use might influence how it should be owned.

The key takeaway is that changing ownership after purchase is usually expensive and triggers stamp duty or CGT, so it is essential to get it right from the start.

If you are planning to buy property soon, this episode will help you choose the best ownership structure for both current and future circumstances.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart breaks down the key factors to consider when owning property in your personal name. While it is the most common structure among investors, there are important decisions to make that can have a lasting impact on your tax outcomes, cash flow, and asset protection.

He outlines the three main ownership options: sole ownership, joint ownership, and tenants-in-common. Each structure comes with its own benefits. For example, sole ownership may maximise negative gearing if one spouse has a higher income, while a tenants-in-common split can be tailored for tax efficiency and cash management.

Stuart also explains how ownership affects land tax thresholds, capital gains tax, and estate planning. He shares strategies using offset accounts to optimise loan structure, particularly for couples with uneven incomes.

When it comes to your family home, Stuart covers when asset protection or future investment use might influence how it should be owned.

The key takeaway is that changing ownership after purchase is usually expensive and triggers stamp duty or CGT, so it is essential to get it right from the start.

If you are planning to buy property soon, this episode will help you choose the best ownership structure for both current and future circumstances.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17106692 Wed, 07 May 2025 05:00:00 +1000 1990 355 full false Case Study: Six-fold increase and now ready for retirement Case Study: Six-fold increase and now ready for retirement In this case study episode, Stuart Wemyss shares the success story of a couple who experienced a six-fold increase in their investment assets, now positioning them for a comfortable retirement. When they first sought advice in 2015, the couple, aged 54 (him) and 51 (her), had a home valued at $900k with no debt, and co-owned three investment properties worth $1.2 million with $760k of debt. Their superannuation was $180k, and their combined income ranged from $300k to $400k annually.

Fast forward to today, their home is now worth $1.6 million, and they have reduced debt on their properties, resulting in $760k of equity. A new investment property purchased in Melbourne in 2018 has added $600k in equity. Their superannuation has grown to $1.2 million, and family trust investments amount to $595k. Their net investment assets now total $3.15 million, a six-fold increase, with $1 million of that coming from debt reduction.

Stuart highlights key strategies that contributed to their success, such as diversifying investments, optimizing super, and consistently investing in shares since 2020. He also discusses the importance of effective cash flow management and reducing unnecessary insurance cover. The couple, now 64 and 61 years old, are ready to retire comfortably.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this case study episode, Stuart Wemyss shares the success story of a couple who experienced a six-fold increase in their investment assets, now positioning them for a comfortable retirement. When they first sought advice in 2015, the couple, aged 54 (him) and 51 (her), had a home valued at $900k with no debt, and co-owned three investment properties worth $1.2 million with $760k of debt. Their superannuation was $180k, and their combined income ranged from $300k to $400k annually.

Fast forward to today, their home is now worth $1.6 million, and they have reduced debt on their properties, resulting in $760k of equity. A new investment property purchased in Melbourne in 2018 has added $600k in equity. Their superannuation has grown to $1.2 million, and family trust investments amount to $595k. Their net investment assets now total $3.15 million, a six-fold increase, with $1 million of that coming from debt reduction.

Stuart highlights key strategies that contributed to their success, such as diversifying investments, optimizing super, and consistently investing in shares since 2020. He also discusses the importance of effective cash flow management and reducing unnecessary insurance cover. The couple, now 64 and 61 years old, are ready to retire comfortably.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17103475 Tue, 06 May 2025 05:00:00 +1000 1818 full false Ep 354: What to do if you are not ready for financial advice… yet Ep 354: What to do if you are not ready for financial advice… yet New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart shares smart, practical steps for those who aren’t quite ready to pay for full financial advice—but still want to make smart money moves.

He explains the difference between straightforward and complex financial decisions. Early in your wealth-building journey, most choices are straightforward if you educate yourself on the fundamentals and find a great professional mentor—like a savvy mortgage broker or accountant—to guide and reassure you.

Stuart also gives real-world examples of how mentorship and basic strategic advice have helped clients successfully build property portfolios and secure financial freedom—without initially needing full-service advice.

However, he warns that when financial complexity increases, or if you lack confidence in making investment decisions, it’s crucial to know when to bring in a qualified financial advisor.

If you’re early in your journey and wondering how to move forward wisely without overpaying for advice, this episode is essential listening. Stuart offers clear, experience-backed guidance to help you stay on track while you build your foundation.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart shares smart, practical steps for those who aren’t quite ready to pay for full financial advice—but still want to make smart money moves.

He explains the difference between straightforward and complex financial decisions. Early in your wealth-building journey, most choices are straightforward if you educate yourself on the fundamentals and find a great professional mentor—like a savvy mortgage broker or accountant—to guide and reassure you.

Stuart also gives real-world examples of how mentorship and basic strategic advice have helped clients successfully build property portfolios and secure financial freedom—without initially needing full-service advice.

However, he warns that when financial complexity increases, or if you lack confidence in making investment decisions, it’s crucial to know when to bring in a qualified financial advisor.

If you’re early in your journey and wondering how to move forward wisely without overpaying for advice, this episode is essential listening. Stuart offers clear, experience-backed guidance to help you stay on track while you build your foundation.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17054511 Wed, 30 Apr 2025 05:00:00 +1000 2142 354 full false Q&A: Interest-only loans, transferring investment ownership, education bonds and more... Q&A: Interest-only loans, transferring investment ownership, education bonds and more... In yesterday’s Q&A podcast episode, Stuart answered a wide range of listener questions about property investing, tax strategies, and long-term financial planning. He explained options for investors whose interest-only loan terms are ending, covering whether refinancing or switching to principal and interest repayments makes more sense depending on personal strategy. He also discussed the timing of paying down investment loans and different exit strategies for property investors.

Another listener sought advice on structuring future ETF investments and whether it is worthwhile to transfer an existing portfolio into a family trust. Stuart broke down the key factors to consider, including capital gains tax implications and long-term flexibility.

For those planning education funding, Stuart addressed whether education bonds are an efficient way to save for private school fees compared to a regular share portfolio, and the pros and cons of setting up one bond per child versus one combined bond.

The episode also covered the nuances of land value growth for units versus houses, and how to think about the land-to-asset ratio when assessing long-term investment prospects.

Finally, Stuart reviewed a detailed family financial plan involving superannuation consolidation, wrap platforms, education bonds, and SMSF management, offering broad principles to help guide listeners facing similar decisions.

As referenced during the episode, you can also listen to Don’t Wait Until It’s Too Late – Strategic Retirement Planning here.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In yesterday’s Q&A podcast episode, Stuart answered a wide range of listener questions about property investing, tax strategies, and long-term financial planning. He explained options for investors whose interest-only loan terms are ending, covering whether refinancing or switching to principal and interest repayments makes more sense depending on personal strategy. He also discussed the timing of paying down investment loans and different exit strategies for property investors.

Another listener sought advice on structuring future ETF investments and whether it is worthwhile to transfer an existing portfolio into a family trust. Stuart broke down the key factors to consider, including capital gains tax implications and long-term flexibility.

For those planning education funding, Stuart addressed whether education bonds are an efficient way to save for private school fees compared to a regular share portfolio, and the pros and cons of setting up one bond per child versus one combined bond.

The episode also covered the nuances of land value growth for units versus houses, and how to think about the land-to-asset ratio when assessing long-term investment prospects.

Finally, Stuart reviewed a detailed family financial plan involving superannuation consolidation, wrap platforms, education bonds, and SMSF management, offering broad principles to help guide listeners facing similar decisions.

As referenced during the episode, you can also listen to Don’t Wait Until It’s Too Late – Strategic Retirement Planning here.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17054518 Tue, 29 Apr 2025 05:00:00 +1000 1967 full false Ep 353: Are property plans worth paying for? Ep 353: Are property plans worth paying for? New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart takes a critical look at property planning services, which promise to help you build a portfolio by mapping out your borrowing capacity, cash flow, and investment strategy—for a price tag of $4,000 to $5,000.

He explains why these plans might work if you’re committed to only ever investing in property. But if you want holistic advice that considers shares, super, tax, insurance, and retirement planning, property plans often fall short.

Stuart outlines key limitations—like the lack of licensing, regulatory oversight, and inability to provide comprehensive tax or credit advice. He also questions whether these plans are truly tailored strategies or just templated sales tools aimed at generating buyers’ agent fees.

That said, property plans can offer value in mapping geographic diversification and tenant profiles, especially for investors pursuing multi-property portfolios. But quality always trumps quantity—one $1.5M investment-grade property will likely outperform four $500K average ones.

So, are property plans worth it? Stuart says: maybe—but only in narrow cases. For most people, you’re likely better off working with a financial adviser, accountant, and mortgage broker who can give broader, tailored, and regulated advice.

Tune in for an honest, experience-backed breakdown of this increasingly common offering.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart takes a critical look at property planning services, which promise to help you build a portfolio by mapping out your borrowing capacity, cash flow, and investment strategy—for a price tag of $4,000 to $5,000.

He explains why these plans might work if you’re committed to only ever investing in property. But if you want holistic advice that considers shares, super, tax, insurance, and retirement planning, property plans often fall short.

Stuart outlines key limitations—like the lack of licensing, regulatory oversight, and inability to provide comprehensive tax or credit advice. He also questions whether these plans are truly tailored strategies or just templated sales tools aimed at generating buyers’ agent fees.

That said, property plans can offer value in mapping geographic diversification and tenant profiles, especially for investors pursuing multi-property portfolios. But quality always trumps quantity—one $1.5M investment-grade property will likely outperform four $500K average ones.

So, are property plans worth it? Stuart says: maybe—but only in narrow cases. For most people, you’re likely better off working with a financial adviser, accountant, and mortgage broker who can give broader, tailored, and regulated advice.

Tune in for an honest, experience-backed breakdown of this increasingly common offering.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17022406 Wed, 23 Apr 2025 05:00:00 +1000 1945 353 full false Q&A: Surprising tax saving on inheritance, investing in property overseas, repay mortgage or invest and more... Q&A: Surprising tax saving on inheritance, investing in property overseas, repay mortgage or invest and more... In this Q&A episode, Stuart unpacks a range of nuanced financial strategies, from tax-effective investing for children to optimising debt, investment structure, and global property opportunities.

He begins with Cara’s question about investing an inheritance for her children and explains the surprising tax concession available through testamentary trusts—highlighting how they can be used to minimise tax on investment earnings for minors, which is a rare opportunity under Australian tax law.

Shawn’s question opens up a discussion on investing in international real estate. Stuart weighs up the potential benefits, like geographic diversification and affordability, against challenges such as foreign tax laws, currency risk, and lack of local knowledge.

In Tom’s case, the classic dilemma of repaying a mortgage versus investing is explored in detail. Stuart helps Tom assess whether to hold onto a non-investment-grade property, how to optimise surplus income post-property upgrade, and whether using equity to buy an investment-grade asset might deliver better long-term returns.

Andy’s scenario focuses on property ownership structuring and tax efficiency. Stuart breaks down how adjusting ownership percentages between spouses can optimise negative gearing benefits, especially when incomes are uneven. He also addresses the often-overlooked role of bonds in asset allocation, particularly for those with mortgages and offset accounts.

Finally, Stuart answers Adam’s niche query about testamentary trusts and corporate beneficiaries, clarifying the flow of profits and tax treatment when a company is owned by a trust, and whether the concessional tax treatment for minors still applies.

Whether you’re investing for children, managing large-scale debt, exploring offshore property, or trying to perfect your tax setup—this episode delivers clarity, strategy, and actionable ideas. Tune in now!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart unpacks a range of nuanced financial strategies, from tax-effective investing for children to optimising debt, investment structure, and global property opportunities.

He begins with Cara’s question about investing an inheritance for her children and explains the surprising tax concession available through testamentary trusts—highlighting how they can be used to minimise tax on investment earnings for minors, which is a rare opportunity under Australian tax law.

Shawn’s question opens up a discussion on investing in international real estate. Stuart weighs up the potential benefits, like geographic diversification and affordability, against challenges such as foreign tax laws, currency risk, and lack of local knowledge.

In Tom’s case, the classic dilemma of repaying a mortgage versus investing is explored in detail. Stuart helps Tom assess whether to hold onto a non-investment-grade property, how to optimise surplus income post-property upgrade, and whether using equity to buy an investment-grade asset might deliver better long-term returns.

Andy’s scenario focuses on property ownership structuring and tax efficiency. Stuart breaks down how adjusting ownership percentages between spouses can optimise negative gearing benefits, especially when incomes are uneven. He also addresses the often-overlooked role of bonds in asset allocation, particularly for those with mortgages and offset accounts.

Finally, Stuart answers Adam’s niche query about testamentary trusts and corporate beneficiaries, clarifying the flow of profits and tax treatment when a company is owned by a trust, and whether the concessional tax treatment for minors still applies.

Whether you’re investing for children, managing large-scale debt, exploring offshore property, or trying to perfect your tax setup—this episode delivers clarity, strategy, and actionable ideas. Tune in now!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-17010367 Tue, 22 Apr 2025 05:00:00 +1000 1904 full false Ep 352: Banks and miners: Where to from here for the Australian stock market? Ep 352: Banks and miners: Where to from here for the Australian stock market? New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart dives into the heart of the Australian share market, breaking down how a small group of stocks—the big banks and major miners—are dominating the ASX200. In 2024, just three banks (CBA, Westpac, NAB) delivered more than half the index’s gains, while BHP and Rio Tinto dragged returns down.

Stuart questions whether this concentration risk is sustainable. With CBA trading at historically high valuations and 14 out of 15 brokers rating it a 'sell', it may be time for investors to take profits. Meanwhile, Macquarie Bank stands out with solid long-term growth and attractive valuation.

On the mining side, copper is booming, offering hope for BHP and Rio despite iron ore headwinds and China uncertainty.

Stuart also explores alternative ETF strategies like equal-weight and ex-top-20 indices, which reduce exposure to overpriced large caps and give broader diversification.

If you’re concerned about valuation risk, market concentration, and how to position your portfolio for the future, this episode is essential listening. Stuart offers practical, data-backed insights to help you rethink how you're investing in the ASX.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart dives into the heart of the Australian share market, breaking down how a small group of stocks—the big banks and major miners—are dominating the ASX200. In 2024, just three banks (CBA, Westpac, NAB) delivered more than half the index’s gains, while BHP and Rio Tinto dragged returns down.

Stuart questions whether this concentration risk is sustainable. With CBA trading at historically high valuations and 14 out of 15 brokers rating it a 'sell', it may be time for investors to take profits. Meanwhile, Macquarie Bank stands out with solid long-term growth and attractive valuation.

On the mining side, copper is booming, offering hope for BHP and Rio despite iron ore headwinds and China uncertainty.

Stuart also explores alternative ETF strategies like equal-weight and ex-top-20 indices, which reduce exposure to overpriced large caps and give broader diversification.

If you’re concerned about valuation risk, market concentration, and how to position your portfolio for the future, this episode is essential listening. Stuart offers practical, data-backed insights to help you rethink how you're investing in the ASX.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16984052 Wed, 16 Apr 2025 05:00:00 +1000 1914 352 full false Q&A: Livevesting, transition into your forever home, balancing regular travel and investing and more... Q&A: Livevesting, transition into your forever home, balancing regular travel and investing and more... In this Q&A episode, Stuart explores the intricacies of livevesting, a strategy that uses your primary residence as both a lifestyle asset and an investment tool. He responds to a thoughtful proposal to use the equity in a fully paid-off home to fund early retirement while still benefiting from the compounding capital growth of a high-quality property. Stuart unpacks the assumptions, risks, and practicalities of this "bridge" strategy, including cash flow, interest-only loans, and tax considerations.

He also helps listeners navigating the transition from investment to forever homes, tackling questions about when to switch from interest-only to principal & interest loans and how to prepare for changing cash flow needs. In a compelling case study, Stuart reviews a listener’s $2.4M property strategy and offers guidance on optimising the loan structure and transitioning to owner-occupier status.

For those balancing travel goals with financial growth, Stuart analyses how to manage debt, timing capital gains, and choosing between keeping, selling, or recycling equity from properties into diversified investments. He explains how to execute a part-time travel lifestyle without derailing long-term financial plans.

Finally, the episode includes a technical dive into the real top marginal tax rate, including the Medicare Levy and Surcharge, and clears up misconceptions around the tax treatment of super and company income.

If you’re thinking about retiring early, leveraging your home for growth, or managing lifestyle ambitions alongside investment goals, this episode is packed with practical strategy and long-term thinking. Tune in now!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart explores the intricacies of livevesting, a strategy that uses your primary residence as both a lifestyle asset and an investment tool. He responds to a thoughtful proposal to use the equity in a fully paid-off home to fund early retirement while still benefiting from the compounding capital growth of a high-quality property. Stuart unpacks the assumptions, risks, and practicalities of this "bridge" strategy, including cash flow, interest-only loans, and tax considerations.

He also helps listeners navigating the transition from investment to forever homes, tackling questions about when to switch from interest-only to principal & interest loans and how to prepare for changing cash flow needs. In a compelling case study, Stuart reviews a listener’s $2.4M property strategy and offers guidance on optimising the loan structure and transitioning to owner-occupier status.

For those balancing travel goals with financial growth, Stuart analyses how to manage debt, timing capital gains, and choosing between keeping, selling, or recycling equity from properties into diversified investments. He explains how to execute a part-time travel lifestyle without derailing long-term financial plans.

Finally, the episode includes a technical dive into the real top marginal tax rate, including the Medicare Levy and Surcharge, and clears up misconceptions around the tax treatment of super and company income.

If you’re thinking about retiring early, leveraging your home for growth, or managing lifestyle ambitions alongside investment goals, this episode is packed with practical strategy and long-term thinking. Tune in now!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16977089 Tue, 15 Apr 2025 05:00:00 +1000 1861 full false Ep 351: Rentvesting vs Home Ownership: A Strategic Comparison Ep 351: Rentvesting vs Home Ownership: A Strategic Comparison New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Campbell Wallace dives into one of the most talked-about debates in Australian property circles: rentvesting vs. home ownership. With housing affordability challenges in major cities, many investors are asking, is it smarter to rent where you want to live and invest elsewhere, or should you just buy your own home as early as possible?

Campbell unpacks the pros and cons of both strategies, from tax benefits and flexibility to CGT implications and long-term retirement outcomes. Using a detailed case study, he compares the 30-year financial outcomes of a rentvester and a homeowner, factoring in cash flow, capital growth, tax, and retirement planning.

The verdict? Home ownership edges ahead in the long run, thanks to the CGT exemption and the powerful cash flow advantage of being mortgage-free in retirement. But Campbell also highlights when rentvesting makes sense, particularly for those with short-term living plans or better investment opportunities elsewhere.

Whether you're starting out or rethinking your strategy, this episode will help you weigh your options and understand the trade-offs. Tune in for a clear, numbers-backed perspective on two very different paths to wealth

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Campbell Wallace dives into one of the most talked-about debates in Australian property circles: rentvesting vs. home ownership. With housing affordability challenges in major cities, many investors are asking, is it smarter to rent where you want to live and invest elsewhere, or should you just buy your own home as early as possible?

Campbell unpacks the pros and cons of both strategies, from tax benefits and flexibility to CGT implications and long-term retirement outcomes. Using a detailed case study, he compares the 30-year financial outcomes of a rentvester and a homeowner, factoring in cash flow, capital growth, tax, and retirement planning.

The verdict? Home ownership edges ahead in the long run, thanks to the CGT exemption and the powerful cash flow advantage of being mortgage-free in retirement. But Campbell also highlights when rentvesting makes sense, particularly for those with short-term living plans or better investment opportunities elsewhere.

Whether you're starting out or rethinking your strategy, this episode will help you weigh your options and understand the trade-offs. Tune in for a clear, numbers-backed perspective on two very different paths to wealth

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Campbell Wallace Buzzsprout-16927753 Wed, 09 Apr 2025 05:00:00 +1000 1667 351 full false Q&A: Cheap SMSF, sell shares to repay home loan, best books, forever home strategies Q&A: Cheap SMSF, sell shares to repay home loan, best books, forever home strategies In this Q&A episode, Stuart tackles a diverse mix of listener questions, exploring everything from low-cost SMSF innovation to strategic debt repayment, financial reading recommendations, and smart home upgrade planning.

He kicks things off by discussing how falling costs and rising tech-driven solutions have made SMSFs more accessible at lower balances, especially for those wanting control over ETF investing and more flexible tax management. Dean’s question about selling capital gains while debt recycling leads to a valuable discussion on capital gains strategy, reinvestment, and tax-smart debt reduction.

For readers seeking more financial wisdom, Stuart shares his top book recommendations across investing, property, and historical market insights. He also demystifies the complex rules around developing property inside an SMSF—addressing what’s possible (like subdivision and construction) and where the limits are, particularly around borrowing and ownership structures.

Jeff’s question ties it all together with a practical discussion on buying a forever home, long-term debt planning, and the timeline for introducing an investment property into your portfolio, even later in your financial journey.

Whether you're refining your super strategy, weighing a big property move, or just hungry for better financial understanding, this episode is full of expert guidance and useful frameworks. Tune in now!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart tackles a diverse mix of listener questions, exploring everything from low-cost SMSF innovation to strategic debt repayment, financial reading recommendations, and smart home upgrade planning.

He kicks things off by discussing how falling costs and rising tech-driven solutions have made SMSFs more accessible at lower balances, especially for those wanting control over ETF investing and more flexible tax management. Dean’s question about selling capital gains while debt recycling leads to a valuable discussion on capital gains strategy, reinvestment, and tax-smart debt reduction.

For readers seeking more financial wisdom, Stuart shares his top book recommendations across investing, property, and historical market insights. He also demystifies the complex rules around developing property inside an SMSF—addressing what’s possible (like subdivision and construction) and where the limits are, particularly around borrowing and ownership structures.

Jeff’s question ties it all together with a practical discussion on buying a forever home, long-term debt planning, and the timeline for introducing an investment property into your portfolio, even later in your financial journey.

Whether you're refining your super strategy, weighing a big property move, or just hungry for better financial understanding, this episode is full of expert guidance and useful frameworks. Tune in now!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16927797 Tue, 08 Apr 2025 05:00:00 +1000 2046 full false Special: Trump tariffs - what should investors do? Special: Trump tariffs - what should investors do? In this episode, Stuart discusses the recent Trump Tariffs and their potential impact on your investments. 

The US has raised tariffs from 2.5% to 22%, causing the US market to drop 10% over two days, with, for example, Apple losing 17% of its value - equal to one third of the value of the whole ASX - $1 trillion Australian dollars. 

If these tariffs remain, we could see higher living costs and inflation in the US, while supply chain disruptions could push prices even higher globally. On the flip side, other countries might experience lower inflation and interest rates as the risk of a global recession rises.

Stuart discuss whether these tariffs are a permanent strategy or a tactical move, suggesting that their long-term impact is still uncertain. With the US market now trading at April 2024 levels, he reminds listeners not to panic, as market corrections are a normal part of investing.

He also explore how this could affect your property investments, with lower interest rates and share market volatility often proving beneficial for the property market. 

As long-term investors, we see market drops as opportunities to invest more strategically and continue playing the long game.

Tune in for insights on navigating this volatility and positioning your portfolio for future growth.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this episode, Stuart discusses the recent Trump Tariffs and their potential impact on your investments. 

The US has raised tariffs from 2.5% to 22%, causing the US market to drop 10% over two days, with, for example, Apple losing 17% of its value - equal to one third of the value of the whole ASX - $1 trillion Australian dollars. 

If these tariffs remain, we could see higher living costs and inflation in the US, while supply chain disruptions could push prices even higher globally. On the flip side, other countries might experience lower inflation and interest rates as the risk of a global recession rises.

Stuart discuss whether these tariffs are a permanent strategy or a tactical move, suggesting that their long-term impact is still uncertain. With the US market now trading at April 2024 levels, he reminds listeners not to panic, as market corrections are a normal part of investing.

He also explore how this could affect your property investments, with lower interest rates and share market volatility often proving beneficial for the property market. 

As long-term investors, we see market drops as opportunities to invest more strategically and continue playing the long game.

Tune in for insights on navigating this volatility and positioning your portfolio for future growth.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16927171 Mon, 07 Apr 2025 09:00:00 +1000 855 full false Ep 350: Reduce CGT by 28%! How to own property in a company. Ep 350: Reduce CGT by 28%! How to own property in a company. New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart unpacks a lesser-known strategy in property investing: using a private company to hold investment properties and how it could cut your capital gains tax (CGT) by up to 28%.

While companies don’t get the 50% CGT discount or immediate negative gearing benefits, Stuart explains how careful structuring, like borrowing personally to buy company shares, can preserve gearing benefits and open the door to massive long-term tax savings.

Using real-life scenarios, he shows how distributing capital gains slowly over many years, using franking credits, can drop your effective CGT rate to as low as 10%, less than half what you’d pay in your personal name.

He also breaks down:
 ✅ When this structure works best (e.g. for PAYG and self-employed investors)
 ✅ How to avoid land tax surcharges
 ✅ What to watch out for, like borrowing limitations and upfront costs

This episode is essential listening if you’re looking to build long-term wealth through property and want to know whether a company structure belongs in your portfolio mix.

Tune in to hear when and why this strategy works and when it doesn’t.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart unpacks a lesser-known strategy in property investing: using a private company to hold investment properties and how it could cut your capital gains tax (CGT) by up to 28%.

While companies don’t get the 50% CGT discount or immediate negative gearing benefits, Stuart explains how careful structuring, like borrowing personally to buy company shares, can preserve gearing benefits and open the door to massive long-term tax savings.

Using real-life scenarios, he shows how distributing capital gains slowly over many years, using franking credits, can drop your effective CGT rate to as low as 10%, less than half what you’d pay in your personal name.

He also breaks down:
 ✅ When this structure works best (e.g. for PAYG and self-employed investors)
 ✅ How to avoid land tax surcharges
 ✅ What to watch out for, like borrowing limitations and upfront costs

This episode is essential listening if you’re looking to build long-term wealth through property and want to know whether a company structure belongs in your portfolio mix.

Tune in to hear when and why this strategy works and when it doesn’t.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16899183 Wed, 02 Apr 2025 05:00:00 +1100 1981 350 full false Q&A: How to use inheritance, buying into a business, how to invest cash in SMSF, when to get advice and more... Q&A: How to use inheritance, buying into a business, how to invest cash in SMSF, when to get advice and more... In this Q&A episode, Stuart explores how to make strategic decisions with lump sums, whether they come from inheritances, business opportunities, or property sales. He offers guidance to William, who’s weighing how best to use a $750,000 inheritance to build long-term wealth while balancing homeownership and market timing. Sarah, currently on maternity leave, wants to optimise the $130,000 proceeds from a property sale—whether to pay down debt, invest in shares, or consider another investment property—all while managing cash flow and long-term goals.

Stuart also answers Meteor Girl’s question on choosing between buying into a business or investing in property, offering a practical framework to assess risk, return, and control. For Ron, he discusses investing cash within an SMSF—specifically whether to stay in offset or shift into capital-growth-focused ETFs, and how to approach investing during market highs.

He also speaks to Kazza, who wants to transition from being equity-rich but cash flow poor to a perpetual income-focused portfolio. Stuart breaks down a potential pathway to generating $180K/year in passive income, using ETFs and a phased exit from property.

If you’re managing large sums of money or rethinking your portfolio for the next phase of life, this episode is packed with frameworks, real-world examples, and practical advice. Tune in now for smart, considered strategies to guide your financial decisions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart explores how to make strategic decisions with lump sums, whether they come from inheritances, business opportunities, or property sales. He offers guidance to William, who’s weighing how best to use a $750,000 inheritance to build long-term wealth while balancing homeownership and market timing. Sarah, currently on maternity leave, wants to optimise the $130,000 proceeds from a property sale—whether to pay down debt, invest in shares, or consider another investment property—all while managing cash flow and long-term goals.

Stuart also answers Meteor Girl’s question on choosing between buying into a business or investing in property, offering a practical framework to assess risk, return, and control. For Ron, he discusses investing cash within an SMSF—specifically whether to stay in offset or shift into capital-growth-focused ETFs, and how to approach investing during market highs.

He also speaks to Kazza, who wants to transition from being equity-rich but cash flow poor to a perpetual income-focused portfolio. Stuart breaks down a potential pathway to generating $180K/year in passive income, using ETFs and a phased exit from property.

If you’re managing large sums of money or rethinking your portfolio for the next phase of life, this episode is packed with frameworks, real-world examples, and practical advice. Tune in now for smart, considered strategies to guide your financial decisions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16891905 Tue, 01 Apr 2025 05:00:00 +1100 2337 full false Ep 349: Investor risk premium: what is it and why it matters Ep 349: Investor risk premium: what is it and why it matters New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart breaks down the 'Investor Risk Premium', a key concept that helps you assess whether you’re being fairly rewarded for the risks you take with your investments. Traditionally used in share investing, Stuart explains why this idea should apply to all asset classes, from shares and property to speculative assets like crypto.

Right now, U.S. equities appear overvalued, with future returns unlikely to match the past decade’s gains. In fact, forward-looking data suggests the expected equity risk premium in the U.S. is negative, meaning investors may not be adequately compensated for the risk.

By contrast, Australian shares and property offer more attractive return prospects, especially when measured against the risk-free rate.

The key takeaway? Don’t chase past performance—focus on future returns relative to risk. Whether you're investing in shares, property, or anything else, you need to ensure the expected return is worth the volatility, liquidity constraints, and uncertainty you're taking on.

A sound, evidence-based strategy that prioritises risk-adjusted returns is the smartest way to build long-term wealth. Tune in to learn how to apply this thinking across your portfolio and avoid the common traps of emotional or trend-driven investing.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart breaks down the 'Investor Risk Premium', a key concept that helps you assess whether you’re being fairly rewarded for the risks you take with your investments. Traditionally used in share investing, Stuart explains why this idea should apply to all asset classes, from shares and property to speculative assets like crypto.

Right now, U.S. equities appear overvalued, with future returns unlikely to match the past decade’s gains. In fact, forward-looking data suggests the expected equity risk premium in the U.S. is negative, meaning investors may not be adequately compensated for the risk.

By contrast, Australian shares and property offer more attractive return prospects, especially when measured against the risk-free rate.

The key takeaway? Don’t chase past performance—focus on future returns relative to risk. Whether you're investing in shares, property, or anything else, you need to ensure the expected return is worth the volatility, liquidity constraints, and uncertainty you're taking on.

A sound, evidence-based strategy that prioritises risk-adjusted returns is the smartest way to build long-term wealth. Tune in to learn how to apply this thinking across your portfolio and avoid the common traps of emotional or trend-driven investing.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16853335 Wed, 26 Mar 2025 05:00:00 +1100 2097 349 full false Q&A: Develop or sell with DA, rentinvesting considerations, does property add meaningful diversification in a portfolio and more... Q&A: Develop or sell with DA, rentinvesting considerations, does property add meaningful diversification in a portfolio and more... In this Q&A episode, Stuart unpacks a wide range of listener questions, from navigating complex property strategies to exploring the role of diversification in a balanced investment portfolio. He shares tailored insights with AJ on managing a high-income household, including whether to sell, develop, or hold investment properties, how to structure super contributions and if moving into a completed knockdown-rebuild could offer tax advantages.

Peter and Veronika weigh whether to sell their fully paid-off Rockdale unit or hold while rentvesting—and Stuart considers the timing and risks of Sydney’s apartment market. For Greg, the focus is on helping his sons grow their first home savings using more effective vehicles than a basic bank account.

The episode also features an in-depth question from DIY David, who is deciding whether to sell two fully paid-off Perth investment properties in favour of ETFs, with a keen focus on diversification and CGT strategy. Lastly, Stuart offers practical, step-by-step investment guidance to Craig as he and his partner look to balance mortgage repayments, wealth building, and retirement goals.

If you’re navigating property development, family wealth planning, or retirement strategy, this episode is packed with practical advice and long-term thinking. Tune in now for a strategy-focused Q&A that could reshape how you approach your next financial move.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart unpacks a wide range of listener questions, from navigating complex property strategies to exploring the role of diversification in a balanced investment portfolio. He shares tailored insights with AJ on managing a high-income household, including whether to sell, develop, or hold investment properties, how to structure super contributions and if moving into a completed knockdown-rebuild could offer tax advantages.

Peter and Veronika weigh whether to sell their fully paid-off Rockdale unit or hold while rentvesting—and Stuart considers the timing and risks of Sydney’s apartment market. For Greg, the focus is on helping his sons grow their first home savings using more effective vehicles than a basic bank account.

The episode also features an in-depth question from DIY David, who is deciding whether to sell two fully paid-off Perth investment properties in favour of ETFs, with a keen focus on diversification and CGT strategy. Lastly, Stuart offers practical, step-by-step investment guidance to Craig as he and his partner look to balance mortgage repayments, wealth building, and retirement goals.

If you’re navigating property development, family wealth planning, or retirement strategy, this episode is packed with practical advice and long-term thinking. Tune in now for a strategy-focused Q&A that could reshape how you approach your next financial move.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16851368 Tue, 25 Mar 2025 05:00:00 +1100 2013 full false Ep 348: Hotspotting versus buy-and-hold: Which strategy is better? Ep 348: Hotspotting versus buy-and-hold: Which strategy is better? New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, we dive deep into the hotspotting vs. buy-and-hold debate to determine which strategy delivers better long-term wealth.

🔹 What is hotspotting?
Hotspotting involves identifying areas poised for short-term price growth, often in regional locations or outer suburbs. But has it really outperformed over decades, or is it just a risky bet on market cycles?

🔹 Why buy-and-hold may be the better strategy
Stuart compares the financial outcomes of both strategies, revealing that investment-grade properties with long-term capital growth outperform hotspotting in the long run. With real numbers, he tests best-case and semi-perfect scenarios, showing how missing just one market cycle could cost an investor hundreds of thousands in lost returns.

If you’re thinking about investing in property, this episode is a must-listen! Stuart breaks down why a strong, buy-and-hold strategy is often the smarter play for wealth creation. Tune in now!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, we dive deep into the hotspotting vs. buy-and-hold debate to determine which strategy delivers better long-term wealth.

🔹 What is hotspotting?
Hotspotting involves identifying areas poised for short-term price growth, often in regional locations or outer suburbs. But has it really outperformed over decades, or is it just a risky bet on market cycles?

🔹 Why buy-and-hold may be the better strategy
Stuart compares the financial outcomes of both strategies, revealing that investment-grade properties with long-term capital growth outperform hotspotting in the long run. With real numbers, he tests best-case and semi-perfect scenarios, showing how missing just one market cycle could cost an investor hundreds of thousands in lost returns.

If you’re thinking about investing in property, this episode is a must-listen! Stuart breaks down why a strong, buy-and-hold strategy is often the smarter play for wealth creation. Tune in now!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16816358 Wed, 19 Mar 2025 05:00:00 +1100 1857 348 full false Q&A: Tax & super investment options, the “right” strategy, Melbourne property, company restructure and more... Q&A: Tax & super investment options, the “right” strategy, Melbourne property, company restructure and more... In this Q&A episode, Stuart dives into diverse financial topics, from tax-efficient super strategies to Melbourne's property market trends and business exit planning. He answers listener questions on the best share broking platforms, breaking down fees, accessibility, and market options.

For superannuation investors, Stuart explains the tax implications of switching super fund investment options and discusses strategies for managing the taxable component of an SMSF, including the re-contribution method. He also provides guidance on balancing mortgage repayments, property investment, and share market exposure as retirement nears.

The episode also explores the dynamics of Melbourne’s property market, evaluating whether now is the right time to buy, and the impact of land tax policies on investors. Lastly, for business owners, Stuart outlines tax-effective exit strategies, focusing on minimising CGT when selling a startup.

If you’re looking to optimise your wealth-building strategy, superannuation planning, or investment approach, this episode is packed with expert insights to help you make informed financial decisions. Tune in now for valuable takeaways!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart dives into diverse financial topics, from tax-efficient super strategies to Melbourne's property market trends and business exit planning. He answers listener questions on the best share broking platforms, breaking down fees, accessibility, and market options.

For superannuation investors, Stuart explains the tax implications of switching super fund investment options and discusses strategies for managing the taxable component of an SMSF, including the re-contribution method. He also provides guidance on balancing mortgage repayments, property investment, and share market exposure as retirement nears.

The episode also explores the dynamics of Melbourne’s property market, evaluating whether now is the right time to buy, and the impact of land tax policies on investors. Lastly, for business owners, Stuart outlines tax-effective exit strategies, focusing on minimising CGT when selling a startup.

If you’re looking to optimise your wealth-building strategy, superannuation planning, or investment approach, this episode is packed with expert insights to help you make informed financial decisions. Tune in now for valuable takeaways!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16807849 Tue, 18 Mar 2025 05:00:00 +1100 2001 full false Ep 347: Is property development an effective way to build wealth? Ep 347: Is property development an effective way to build wealth? New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, we take a deep dive into property development as a wealth-building strategy. Using real-life case studies, we explore whether small-scale property development offers better returns than traditional buy-and-hold investing.

🔹 Does developing property really pay off?
 Stuart analyzes a 20-year property development case study, showing how one investor turned $270,000 into $1.4 million—a 14.8% after-tax IRR. But does this kind of return hold up in today’s market? Rising land and construction costs have changed the game, making high-IRR developments harder to achieve.

🔹 Key insights from the numbers:
 ✅ How land appreciation and construction costs impact development margins
 ✅ Why higher capital contributions may lead to greater wealth accumulation
 ✅ The realistic return expectations for developers in today’s market
 ✅ When buy-and-hold property investing could be a better long-term strategy

💡 Should you invest in property development?
 Stuart breaks down whether small-scale development is worth the risk—or if your money is better off in a well-selected, investment-grade property with a simpler buy-and-hold strategy.

If you're considering developing property, this episode is a must-listen! Tune in now for a data-driven breakdown of what works—and what doesn’t.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, we take a deep dive into property development as a wealth-building strategy. Using real-life case studies, we explore whether small-scale property development offers better returns than traditional buy-and-hold investing.

🔹 Does developing property really pay off?
 Stuart analyzes a 20-year property development case study, showing how one investor turned $270,000 into $1.4 million—a 14.8% after-tax IRR. But does this kind of return hold up in today’s market? Rising land and construction costs have changed the game, making high-IRR developments harder to achieve.

🔹 Key insights from the numbers:
 ✅ How land appreciation and construction costs impact development margins
 ✅ Why higher capital contributions may lead to greater wealth accumulation
 ✅ The realistic return expectations for developers in today’s market
 ✅ When buy-and-hold property investing could be a better long-term strategy

💡 Should you invest in property development?
 Stuart breaks down whether small-scale development is worth the risk—or if your money is better off in a well-selected, investment-grade property with a simpler buy-and-hold strategy.

If you're considering developing property, this episode is a must-listen! Tune in now for a data-driven breakdown of what works—and what doesn’t.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16770665 Wed, 12 Mar 2025 05:00:00 +1100 2143 347 full false Q&A: Is asset protection important, sell property now, invest for the short term future and more... Q&A: Is asset protection important, sell property now, invest for the short term future and more... In this Q&A episode, Stuart tackles pressing financial questions on asset protection, property decisions, and short-term investment strategies. He delves into whether high-net-worth individuals should prioritise asset protection over tax efficiency and whether selling assets now to move them into a trust is worth the CGT hit.

Stuart also advises on the tricky decision of whether to sell or hold an investment property in light of expected life changes, breaking down the financial implications of each choice. For those managing finances across Australia and New Zealand, he provides insights on the best way to maximise savings for a major renovation while planning for private school fees.

Additionally, he helps a listener decide on the right timing for property investment, considering borrowing capacity fluctuations and market conditions. Finally, he clarifies the tax implications of switching super investment options within an industry fund to better suit long-term financial goals.

If you're grappling with wealth-building strategies, property investments, or optimising your super, this episode is packed with expert insights to help you make informed decisions. Tune in now for practical financial guidance!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart tackles pressing financial questions on asset protection, property decisions, and short-term investment strategies. He delves into whether high-net-worth individuals should prioritise asset protection over tax efficiency and whether selling assets now to move them into a trust is worth the CGT hit.

Stuart also advises on the tricky decision of whether to sell or hold an investment property in light of expected life changes, breaking down the financial implications of each choice. For those managing finances across Australia and New Zealand, he provides insights on the best way to maximise savings for a major renovation while planning for private school fees.

Additionally, he helps a listener decide on the right timing for property investment, considering borrowing capacity fluctuations and market conditions. Finally, he clarifies the tax implications of switching super investment options within an industry fund to better suit long-term financial goals.

If you're grappling with wealth-building strategies, property investments, or optimising your super, this episode is packed with expert insights to help you make informed decisions. Tune in now for practical financial guidance!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16765599 Tue, 11 Mar 2025 05:00:00 +1100 1620 full false Ep 346: 4 things an advisor can do to boost share portfolio returns Ep 346: 4 things an advisor can do to boost share portfolio returns New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart shares the key ways a financial advisor can help you maximise your share portfolio’s returns—beyond just picking stocks.

🔹 What difference does an advisor make?
Even savvy, self-directed investors can unknowingly leave money on the table. Stuart recounts a recent client experience where DIY investing resulted in costly mistakes—mistakes that could have been avoided with expert guidance.

🔹 What do advisors actually do?
✅ Portfolio Construction – Advisors structure portfolios to capture long-term growth, balancing market trends and historical cycles.
✅ Risk Reduction – By strategically diversifying and reducing overexposure, advisors help you avoid concentration risk.
✅ Behavioral Coaching – Preventing emotional, short-term decisions that could harm long-term returns.
✅ Tax Efficiency – Ensuring investments are structured to minimise tax liabilities and maximise after-tax returns.

💡 Can an advisor truly improve your returns?
Stuart explains why professional investment management isn’t just about picking winners—it’s about avoiding costly mistakes, optimising for long-term gains, and managing risk effectively.

If you're investing or considering working with an advisor, this episode is a must-listen! Tune in now to find out how a strategic, evidence-based approach can elevate your investment success.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart shares the key ways a financial advisor can help you maximise your share portfolio’s returns—beyond just picking stocks.

🔹 What difference does an advisor make?
Even savvy, self-directed investors can unknowingly leave money on the table. Stuart recounts a recent client experience where DIY investing resulted in costly mistakes—mistakes that could have been avoided with expert guidance.

🔹 What do advisors actually do?
✅ Portfolio Construction – Advisors structure portfolios to capture long-term growth, balancing market trends and historical cycles.
✅ Risk Reduction – By strategically diversifying and reducing overexposure, advisors help you avoid concentration risk.
✅ Behavioral Coaching – Preventing emotional, short-term decisions that could harm long-term returns.
✅ Tax Efficiency – Ensuring investments are structured to minimise tax liabilities and maximise after-tax returns.

💡 Can an advisor truly improve your returns?
Stuart explains why professional investment management isn’t just about picking winners—it’s about avoiding costly mistakes, optimising for long-term gains, and managing risk effectively.

If you're investing or considering working with an advisor, this episode is a must-listen! Tune in now to find out how a strategic, evidence-based approach can elevate your investment success.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16732995 Wed, 05 Mar 2025 05:00:00 +1100 1977 346 full false Q&A: Moving wealth from property into super, planning in retirement, benefits of two separate super funds and so on... Q&A: Moving wealth from property into super, planning in retirement, benefits of two separate super funds and so on... In this Q&A podcast, I discuss strategies for maximising superannuation contributions, including the eligibility criteria for large non-concessional contributions and using income from properties and trusts to qualify. A listener seeking retirement planning advice receives insights on optimising investments for income, along with guidance on investing in shares versus property and the implications for estate planning. I also tackle superannuation strategies, exploring the benefits of separating taxable and non-taxable components and comparing the advantages of investing in shares personally versus through a company, particularly focusing on long-term growth and negative gearing benefits. 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A podcast, I discuss strategies for maximising superannuation contributions, including the eligibility criteria for large non-concessional contributions and using income from properties and trusts to qualify. A listener seeking retirement planning advice receives insights on optimising investments for income, along with guidance on investing in shares versus property and the implications for estate planning. I also tackle superannuation strategies, exploring the benefits of separating taxable and non-taxable components and comparing the advantages of investing in shares personally versus through a company, particularly focusing on long-term growth and negative gearing benefits. 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16725766 Tue, 04 Mar 2025 05:00:00 +1100 2163 full false Ep 345: How to choose a great buyer’s agent? Ep 345: How to choose a great buyer’s agent? New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Campbell Wallace breaks down the key qualities that make a great buyer’s agent and why choosing the right one can make or break your property investment strategy.

Investing in the highest-quality, investment-grade property within your budget is crucial for long-term capital growth. But navigating the market alone can be risky, and making the wrong purchase could set you back years financially. A top-tier buyer’s agent helps you avoid costly mistakes and ensures you secure the best asset possible.

🔹 What should you look for?
✅ A minimum of 10 years of experience or a team-based approach to leverage expertise
✅ Deep local market knowledge—not just data-driven analysis but real, on-the-ground insight
✅ A rigorous due diligence process to uncover hidden risks before you buy
✅ Transparent pricing advice—no misleading “bargain” off-market deals
✅ Integrity & reputation—agents who are willing to walk away from a bad deal

💡 BONUS: Campbell shares insider tips on how to vet potential agents, ask the right questions, and ensure you’re working with someone who prioritises your long-term success over a quick commission.

If you’re serious about property investing, this episode is a must-listen. Tune in now to learn how to find a buyer’s agent who will set you up for financial success!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Campbell Wallace breaks down the key qualities that make a great buyer’s agent and why choosing the right one can make or break your property investment strategy.

Investing in the highest-quality, investment-grade property within your budget is crucial for long-term capital growth. But navigating the market alone can be risky, and making the wrong purchase could set you back years financially. A top-tier buyer’s agent helps you avoid costly mistakes and ensures you secure the best asset possible.

🔹 What should you look for?
✅ A minimum of 10 years of experience or a team-based approach to leverage expertise
✅ Deep local market knowledge—not just data-driven analysis but real, on-the-ground insight
✅ A rigorous due diligence process to uncover hidden risks before you buy
✅ Transparent pricing advice—no misleading “bargain” off-market deals
✅ Integrity & reputation—agents who are willing to walk away from a bad deal

💡 BONUS: Campbell shares insider tips on how to vet potential agents, ask the right questions, and ensure you’re working with someone who prioritises your long-term success over a quick commission.

If you’re serious about property investing, this episode is a must-listen. Tune in now to learn how to find a buyer’s agent who will set you up for financial success!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Campbell Wallace Buzzsprout-16690911 Wed, 26 Feb 2025 05:00:00 +1100 1937 345 full false Q&A: Intergenerational wealth, tax & loan structure, investment strategy critique and more... Q&A: Intergenerational wealth, tax & loan structure, investment strategy critique and more... In this Q&A episode, Stuart delves into a variety of listener questions, tackling key financial strategies for wealth-building, tax optimisation, and long-term investment planning. He explores the complexities of intergenerational wealth creation, discussing how trusts can be structured to compound assets over generations. Loan structuring and tax deductibility are also covered, helping investors understand how to optimise their financing for maximum benefits.

Additionally, Stuart critiques different investment strategies beyond property, guiding a listener on diversifying their portfolio effectively. The episode also features an in-depth discussion on balancing property investments with homeownership goals—whether to continue expanding an investment property portfolio, buy a primary residence, or hold off for a better opportunity. Lastly, he provides insights for those feeling financially stretched after purchasing their first investment property, offering a strategic roadmap to move forward.

If you're looking to refine your investment approach, structure wealth for future generations, or navigate key financial decisions, this episode is packed with expert insights to help you chart the best course. Tune in now for practical advice on securing your financial future!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart delves into a variety of listener questions, tackling key financial strategies for wealth-building, tax optimisation, and long-term investment planning. He explores the complexities of intergenerational wealth creation, discussing how trusts can be structured to compound assets over generations. Loan structuring and tax deductibility are also covered, helping investors understand how to optimise their financing for maximum benefits.

Additionally, Stuart critiques different investment strategies beyond property, guiding a listener on diversifying their portfolio effectively. The episode also features an in-depth discussion on balancing property investments with homeownership goals—whether to continue expanding an investment property portfolio, buy a primary residence, or hold off for a better opportunity. Lastly, he provides insights for those feeling financially stretched after purchasing their first investment property, offering a strategic roadmap to move forward.

If you're looking to refine your investment approach, structure wealth for future generations, or navigate key financial decisions, this episode is packed with expert insights to help you chart the best course. Tune in now for practical advice on securing your financial future!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16681564 Tue, 25 Feb 2025 05:00:00 +1100 1966 full false Ep 344: More holidays?…The top 10 advantages of having a long-term investment strategy Ep 344: More holidays?…The top 10 advantages of having a long-term investment strategy New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart explores why having a clear, long-term investment strategy is essential for financial success. Inspired by Rohan Rajiv’s insights on strategy, he breaks down how defining a sequence of smart financial steps can help you navigate trade-offs, avoid costly mistakes, and stay on track toward your financial goals.

You’ll discover:
✅ How a well-planned strategy helps you make smarter financial and lifestyle decisions
✅ Why defining your end goal is the key to making wealth-building efficient
✅ How a structured approach to investing can help you balance risk, tax, and diversification
✅ The biggest mistakes people make when they invest without a clear plan

Plus, Stuart shares an often-overlooked bonus benefit of having a strong financial strategy—one that lets you enjoy life today while securing your future!

Don’t miss this insightful discussion—tune in now to find out how to build lasting wealth the right way!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart explores why having a clear, long-term investment strategy is essential for financial success. Inspired by Rohan Rajiv’s insights on strategy, he breaks down how defining a sequence of smart financial steps can help you navigate trade-offs, avoid costly mistakes, and stay on track toward your financial goals.

You’ll discover:
✅ How a well-planned strategy helps you make smarter financial and lifestyle decisions
✅ Why defining your end goal is the key to making wealth-building efficient
✅ How a structured approach to investing can help you balance risk, tax, and diversification
✅ The biggest mistakes people make when they invest without a clear plan

Plus, Stuart shares an often-overlooked bonus benefit of having a strong financial strategy—one that lets you enjoy life today while securing your future!

Don’t miss this insightful discussion—tune in now to find out how to build lasting wealth the right way!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16639936 Wed, 19 Feb 2025 05:00:00 +1100 2145 full false Q&A Episode: Super account for minors, maximising franking credits, renovate or invest and more... Q&A Episode: Super account for minors, maximising franking credits, renovate or invest and more... In this Q&A episode, Stuart tackles a diverse range of listener questions, covering key financial strategies to optimise wealth and retirement planning. He explores the idea of setting up super accounts for children, weighing the long-term benefits against prioritising present-day investments. He also dives into the complexities of franking credits, comparing industry funds with self-managed super funds and their impact on retirement income.

For property investors, Stuart breaks down the decision-making process between renovating a home or reinvesting sale proceeds into new opportunities, factoring in tax implications and market trends. He also provides insights into early retirement planning, discussing how much is "enough" to retire comfortably while maintaining financial flexibility. Additionally, he examines how property valuations within SMSFs influence pension obligations and long-term financial planning.

Whether you're strategising for your family's financial future, navigating superannuation complexities, or deciding when to retire, this episode is packed with expert insights to help you make informed decisions. Tune in now for actionable advice on making the most of your wealth.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart tackles a diverse range of listener questions, covering key financial strategies to optimise wealth and retirement planning. He explores the idea of setting up super accounts for children, weighing the long-term benefits against prioritising present-day investments. He also dives into the complexities of franking credits, comparing industry funds with self-managed super funds and their impact on retirement income.

For property investors, Stuart breaks down the decision-making process between renovating a home or reinvesting sale proceeds into new opportunities, factoring in tax implications and market trends. He also provides insights into early retirement planning, discussing how much is "enough" to retire comfortably while maintaining financial flexibility. Additionally, he examines how property valuations within SMSFs influence pension obligations and long-term financial planning.

Whether you're strategising for your family's financial future, navigating superannuation complexities, or deciding when to retire, this episode is packed with expert insights to help you make informed decisions. Tune in now for actionable advice on making the most of your wealth.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16634736 Tue, 18 Feb 2025 05:00:00 +1100 2053 full false Ep 343: Asset rich but cash flow poor? Co-investing in property with your super could be the solution Ep 343: Asset rich but cash flow poor? Co-investing in property with your super could be the solution New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart explores an alternative strategy for property investors who may be cash-flow-poor but asset-rich—co-investing in property with your superannuation.

Building on last week’s discussion about the pros and cons of borrowing inside super, Stuart introduces a method that could help investors increase their budget to secure higher-quality properties without fully relying on superannuation borrowings. By co-investing with your SMSF, you can leverage personal assets while keeping the super fund's share unleveraged—potentially improving diversification, minimizing tax liabilities, and enhancing long-term returns.

However, Stuart also breaks down the complexities of this approach, from legal structures to tax considerations and liquidity concerns. He cautions against forcing a property investment strategy where it may not be the best fit and stresses the importance of independent financial advice.

Is this strategy right for you? Tune in to learn how co-investing with your super could help you access better-quality assets while maintaining financial flexibility. Plus, get insights into when property may not be the ideal investment choice within your super fund.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart explores an alternative strategy for property investors who may be cash-flow-poor but asset-rich—co-investing in property with your superannuation.

Building on last week’s discussion about the pros and cons of borrowing inside super, Stuart introduces a method that could help investors increase their budget to secure higher-quality properties without fully relying on superannuation borrowings. By co-investing with your SMSF, you can leverage personal assets while keeping the super fund's share unleveraged—potentially improving diversification, minimizing tax liabilities, and enhancing long-term returns.

However, Stuart also breaks down the complexities of this approach, from legal structures to tax considerations and liquidity concerns. He cautions against forcing a property investment strategy where it may not be the best fit and stresses the importance of independent financial advice.

Is this strategy right for you? Tune in to learn how co-investing with your super could help you access better-quality assets while maintaining financial flexibility. Plus, get insights into when property may not be the ideal investment choice within your super fund.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16603633 Wed, 12 Feb 2025 05:00:00 +1100 1970 full false Case Study: An example of a perpetual portfolio in retirement Case Study: An example of a perpetual portfolio in retirement New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

In this case study episode, Stuart Wemyss discusses a client’s journey to establishing a successful retirement strategy using a perpetual portfolio. The client, who began retirement with a Self-Managed Super Fund (SMSF) balance of just under $2 million, faced significant losses from a poor stock pick. However, over seven years, the portfolio has grown despite drawing substantial pension payments. Stuart highlights key strategies employed to achieve this growth, such as selling underperforming active funds, including Magellan and Walter Scott, and shifting to a more income-focused equity strategy using ETFs and corporate bonds.

The client’s real estate assets have also appreciated, with equity in their property doubling. Stuart emphasizes the importance of diversification, noting that despite some asset classes like banks and bonds underperforming, diversification across sectors smooth returns over the long run. He also stresses the importance of balancing income and capital growth in a retirement portfolio, ensuring all assets contribute. The episode concludes with a discussion on the challenges of active management and the benefits of long-term, diversified strategies for a successful retirement.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

In this case study episode, Stuart Wemyss discusses a client’s journey to establishing a successful retirement strategy using a perpetual portfolio. The client, who began retirement with a Self-Managed Super Fund (SMSF) balance of just under $2 million, faced significant losses from a poor stock pick. However, over seven years, the portfolio has grown despite drawing substantial pension payments. Stuart highlights key strategies employed to achieve this growth, such as selling underperforming active funds, including Magellan and Walter Scott, and shifting to a more income-focused equity strategy using ETFs and corporate bonds.

The client’s real estate assets have also appreciated, with equity in their property doubling. Stuart emphasizes the importance of diversification, noting that despite some asset classes like banks and bonds underperforming, diversification across sectors smooth returns over the long run. He also stresses the importance of balancing income and capital growth in a retirement portfolio, ensuring all assets contribute. The episode concludes with a discussion on the challenges of active management and the benefits of long-term, diversified strategies for a successful retirement.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16596601 Tue, 11 Feb 2025 05:00:00 +1100 1896 full false Ep 342: Are the benefits of investing in property with your super overstated? Ep 342: Are the benefits of investing in property with your super overstated? New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart breaks down the realities of borrowing to invest in property inside your superannuation. While SMSFs using Limited Recourse Borrowing Arrangements (LRBAs) have seen impressive asset growth—rising from $43 billion to $70 billion in just five years—the benefits of this strategy are often overstated.

Stuart dives into the numbers, comparing returns on property investment inside and outside of super. He highlights key factors such as higher SMSF loan interest rates, reduced negative gearing benefits, and the importance of gearing ratios. While avoiding Capital Gains Tax (CGT) in super sounds appealing, the actual after-tax return may not always outperform traditional property investment in personal names.

Should you borrow to invest in property inside super? Or would you be better off leaving your funds in a high-performing super fund instead? Stuart provides in-depth analysis, answering these critical questions and offering practical guidance on making the right investment choice.

He also warns of potential liquidity traps and emphasizes the importance of choosing investment-grade property for long-term growth. Tune in to get the full breakdown and a sneak peek into next week’s strategy for overcoming borrowing constraints in super!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart breaks down the realities of borrowing to invest in property inside your superannuation. While SMSFs using Limited Recourse Borrowing Arrangements (LRBAs) have seen impressive asset growth—rising from $43 billion to $70 billion in just five years—the benefits of this strategy are often overstated.

Stuart dives into the numbers, comparing returns on property investment inside and outside of super. He highlights key factors such as higher SMSF loan interest rates, reduced negative gearing benefits, and the importance of gearing ratios. While avoiding Capital Gains Tax (CGT) in super sounds appealing, the actual after-tax return may not always outperform traditional property investment in personal names.

Should you borrow to invest in property inside super? Or would you be better off leaving your funds in a high-performing super fund instead? Stuart provides in-depth analysis, answering these critical questions and offering practical guidance on making the right investment choice.

He also warns of potential liquidity traps and emphasizes the importance of choosing investment-grade property for long-term growth. Tune in to get the full breakdown and a sneak peek into next week’s strategy for overcoming borrowing constraints in super!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16559238 Wed, 05 Feb 2025 05:00:00 +1100 1851 342 full false Q&A: Sell investments to upgrade home, invest in personal name or trust, and more... Q&A: Sell investments to upgrade home, invest in personal name or trust, and more... In this Q&A episode, Stuart answers a range of listener questions covering property investment strategies, tax considerations, and structuring share portfolios for long-term wealth building. He explores whether it's better to sell investment properties to upgrade a family home, how to balance rental yields with capital growth, and whether to renovate or develop for higher returns.

Stuart also dives into tax-efficient superannuation strategies, IRR calculations for property investments, and the differences between investing in personal names versus family trusts. For those looking to optimize their share investments, he provides insights on platforms like Stockspot and Pearler and how to build a tax-efficient portfolio outside of super.

If you're navigating property decisions, investment structures, or long-term financial planning, this episode is packed with valuable, practical advice to help you make informed choices. Tune in for expert insights tailored to investors at all levels!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart answers a range of listener questions covering property investment strategies, tax considerations, and structuring share portfolios for long-term wealth building. He explores whether it's better to sell investment properties to upgrade a family home, how to balance rental yields with capital growth, and whether to renovate or develop for higher returns.

Stuart also dives into tax-efficient superannuation strategies, IRR calculations for property investments, and the differences between investing in personal names versus family trusts. For those looking to optimize their share investments, he provides insights on platforms like Stockspot and Pearler and how to build a tax-efficient portfolio outside of super.

If you're navigating property decisions, investment structures, or long-term financial planning, this episode is packed with valuable, practical advice to help you make informed choices. Tune in for expert insights tailored to investors at all levels!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16554983 Tue, 04 Feb 2025 05:00:00 +1100 2476 full false Ep 341: What makes a mortgage broker great? Ep 341: What makes a mortgage broker great? New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart dives into the essential traits that make a mortgage broker truly great and how they can transform your financial journey. With over two decades of experience in mortgage broking and property investing, Stuart shares unique insights into what separates exceptional brokers from the rest. He explores the five critical attributes every top-tier broker should possess, including property investment experience, a strong understanding of tax-efficient loan structures, and a solution-focused mindset to tackle even the most complex scenarios. 

Stuart highlights why working with a broker who specializes in clients like you can make all the difference and explains the importance of having a broker who’s not afraid to give honest advice—even when it’s not what you want to hear. 

While many focus solely on securing the lowest interest rates, Stuart argues that a broker’s real value lies in helping you achieve your long-term financial goals by ensuring smarter, well-informed decisions. Whether you’re a first-home buyer, investor, or someone seeking the right mortgage solution, this episode offers actionable insights to help you find a broker who will support you for life. 

If you’re looking to borrow or invest wisely, this episode is packed with advice to help you avoid costly mistakes and set yourself up for success. 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart dives into the essential traits that make a mortgage broker truly great and how they can transform your financial journey. With over two decades of experience in mortgage broking and property investing, Stuart shares unique insights into what separates exceptional brokers from the rest. He explores the five critical attributes every top-tier broker should possess, including property investment experience, a strong understanding of tax-efficient loan structures, and a solution-focused mindset to tackle even the most complex scenarios. 

Stuart highlights why working with a broker who specializes in clients like you can make all the difference and explains the importance of having a broker who’s not afraid to give honest advice—even when it’s not what you want to hear. 

While many focus solely on securing the lowest interest rates, Stuart argues that a broker’s real value lies in helping you achieve your long-term financial goals by ensuring smarter, well-informed decisions. Whether you’re a first-home buyer, investor, or someone seeking the right mortgage solution, this episode offers actionable insights to help you find a broker who will support you for life. 

If you’re looking to borrow or invest wisely, this episode is packed with advice to help you avoid costly mistakes and set yourself up for success. 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16516519 Wed, 29 Jan 2025 05:00:00 +1100 2611 341 full false Q&A: Dollar cost averaging, property development and renovations, super wrap versus industry fund and more... Q&A: Dollar cost averaging, property development and renovations, super wrap versus industry fund and more... In this engaging Q&A episode, Stuart tackles a wide range of listener questions on investing, property development, superannuation strategies, and financial planning. He provides expert insights into whether to use dollar-cost averaging or lump sum investing, evaluates the benefits of wrap platforms versus low-cost funds like VDGR, and offers guidance on property decisions, including whether to renovate or develop for higher returns.

Listeners will also gain practical advice on optimizing super contributions, debt recycling strategies, and building a high-growth, low-maintenance property portfolio. Stuart delves into the complexities of investing as a non-resident, the tax implications of capital gains, and how to leverage equity effectively.

Whether you're planning your next property move, fine-tuning your investment strategy, or considering long-term retirement goals, this episode is packed with actionable insights to help you make smarter financial decisions. Perfect for investors at every stage of their journey!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this engaging Q&A episode, Stuart tackles a wide range of listener questions on investing, property development, superannuation strategies, and financial planning. He provides expert insights into whether to use dollar-cost averaging or lump sum investing, evaluates the benefits of wrap platforms versus low-cost funds like VDGR, and offers guidance on property decisions, including whether to renovate or develop for higher returns.

Listeners will also gain practical advice on optimizing super contributions, debt recycling strategies, and building a high-growth, low-maintenance property portfolio. Stuart delves into the complexities of investing as a non-resident, the tax implications of capital gains, and how to leverage equity effectively.

Whether you're planning your next property move, fine-tuning your investment strategy, or considering long-term retirement goals, this episode is packed with actionable insights to help you make smarter financial decisions. Perfect for investors at every stage of their journey!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16511845 Tue, 28 Jan 2025 05:00:00 +1100 2298 full false Ep 340: How to invest in the share market in 2025: index funds, managed funds, or direct shares? Ep 340: How to invest in the share market in 2025: index funds, managed funds, or direct shares? New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart explores the best strategies for investing in the share market in 2025, comparing index funds, managed funds, and direct shares. Backed by data from the S&P Dow Jones SPIVA report, Stuart explains why evidence-based, rules-driven strategies consistently outperform active management. He also unpacks the dominance of large-cap stocks in 2024, the risks of growth-focused portfolios, and the potential of alternative index strategies like equal-weight and value-tilted funds. Whether you're a seasoned investor or just starting out, this episode is packed with practical tips to help you build a diversified, long-term portfolio.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart explores the best strategies for investing in the share market in 2025, comparing index funds, managed funds, and direct shares. Backed by data from the S&P Dow Jones SPIVA report, Stuart explains why evidence-based, rules-driven strategies consistently outperform active management. He also unpacks the dominance of large-cap stocks in 2024, the risks of growth-focused portfolios, and the potential of alternative index strategies like equal-weight and value-tilted funds. Whether you're a seasoned investor or just starting out, this episode is packed with practical tips to help you build a diversified, long-term portfolio.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16468847 Wed, 22 Jan 2025 05:00:00 +1100 2475 340 full false Q&A: Borrowing against equity to invest in shares, commercial property in SMSF, transition to retirement, and more... Q&A: Borrowing against equity to invest in shares, commercial property in SMSF, transition to retirement, and more... In this episode, Stuart answers listener questions about share market investing in 2025, exploring the merits of index funds, managed funds, and direct shares. He explains why evidence-based, rules-driven strategies consistently outperform active management, using data from the S&P Dow Jones SPIVA report. Stuart highlights that over 85% of Australian actively managed funds and 90% of U.S. funds fail to beat their respective indexes over the long term. This makes index funds, with their low fees, tax efficiency, and minimal turnover, a compelling choice for investors.

Stuart also reviews 2024 market trends, including the dominance of large-cap stocks like banks in Australia and the "Magnificent Seven" in the U.S. He discusses risks associated with growth-focused portfolios, noting that high valuations could limit future returns. The episode delves into alternative indexing strategies such as equal-weight, value-tilted, and quality-focused funds, examining their 2024 performance and potential for diversification.

Listeners gain insights into balancing risk and return, constructing diversified portfolios, and focusing on long-term growth rather than short-term predictions. Whether you're new to investing or a seasoned pro, Stuart’s expert advice offers practical guidance for navigating the share market and achieving financial success in the years ahead.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this episode, Stuart answers listener questions about share market investing in 2025, exploring the merits of index funds, managed funds, and direct shares. He explains why evidence-based, rules-driven strategies consistently outperform active management, using data from the S&P Dow Jones SPIVA report. Stuart highlights that over 85% of Australian actively managed funds and 90% of U.S. funds fail to beat their respective indexes over the long term. This makes index funds, with their low fees, tax efficiency, and minimal turnover, a compelling choice for investors.

Stuart also reviews 2024 market trends, including the dominance of large-cap stocks like banks in Australia and the "Magnificent Seven" in the U.S. He discusses risks associated with growth-focused portfolios, noting that high valuations could limit future returns. The episode delves into alternative indexing strategies such as equal-weight, value-tilted, and quality-focused funds, examining their 2024 performance and potential for diversification.

Listeners gain insights into balancing risk and return, constructing diversified portfolios, and focusing on long-term growth rather than short-term predictions. Whether you're new to investing or a seasoned pro, Stuart’s expert advice offers practical guidance for navigating the share market and achieving financial success in the years ahead.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16468864 Tue, 21 Jan 2025 05:00:00 +1100 1930 full false Ep 339: Property market expectations for 2025 Ep 339: Property market expectations for 2025 New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart delves into the key trends and expectations shaping the Australian property market in 2025. He unpacks the fascinating dynamics driving property prices across the nation’s capital cities. From Perth's explosive growth to Melbourne's ongoing flat cycle, Stuart provides expert insights into the factors influencing the market, including interstate migration, loan volumes, housing supply, and the anticipated interest rate cuts.

Whether you're a seasoned investor or a first-time buyer, this episode offers valuable perspectives on:

  • Why Perth remains a standout performer.
  • Melbourne’s potential to transition from a flat to a growth cycle.
  • The impact of interstate migration patterns, from Sydney’s population outflow to Queensland’s popularity surge.
  • How 2025’s federal election and interest rate adjustments could shape property prices.

Stuart also shares his predictions for market performance in 2025 and why now could be the perfect time to explore opportunities in slower markets like Melbourne. Packed with actionable insights and historical context, this episode is a must-listen for anyone planning their next property move.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart delves into the key trends and expectations shaping the Australian property market in 2025. He unpacks the fascinating dynamics driving property prices across the nation’s capital cities. From Perth's explosive growth to Melbourne's ongoing flat cycle, Stuart provides expert insights into the factors influencing the market, including interstate migration, loan volumes, housing supply, and the anticipated interest rate cuts.

Whether you're a seasoned investor or a first-time buyer, this episode offers valuable perspectives on:

  • Why Perth remains a standout performer.
  • Melbourne’s potential to transition from a flat to a growth cycle.
  • The impact of interstate migration patterns, from Sydney’s population outflow to Queensland’s popularity surge.
  • How 2025’s federal election and interest rate adjustments could shape property prices.

Stuart also shares his predictions for market performance in 2025 and why now could be the perfect time to explore opportunities in slower markets like Melbourne. Packed with actionable insights and historical context, this episode is a must-listen for anyone planning their next property move.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16433240 Wed, 15 Jan 2025 05:00:00 +1100 1568 339 full false Q&A: Offset versus SMSF loan, debt recycling, consolidating super, insurance and more... Q&A: Offset versus SMSF loan, debt recycling, consolidating super, insurance and more... In this episode, Stuart dives into listener questions covering a wide array of financial topics, from optimising the use of offset accounts versus SMSF loans to debt recycling as a tax-efficient strategy. He shares insights on how to allocate surplus funds, particularly in scenarios where SMSF loans carry higher interest rates than traditional investment loans.

Stuart also explores the complexities of consolidating superannuation accounts to reduce fees, particularly for retirees, and discusses the trade-offs between active financial advisers and industry super funds. Listeners curious about investment property decisions will benefit from a discussion on whether selling properties to pay off personal debts and improve borrowing capacity is a sound strategy.

The episode tackles a thought-provoking debate on property versus shares within SMSFs, weighing long-term returns, diversification, and the impact of fees. Additionally, Stuart provides a high-level look at insurance strategies, offering guidance on determining appropriate coverage for families and retirees while balancing value for money.

For those navigating tax implications in superannuation or contemplating asset reallocation, this episode offers practical advice and actionable insights tailored to the current financial climate. Don’t miss this informative discussion!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this episode, Stuart dives into listener questions covering a wide array of financial topics, from optimising the use of offset accounts versus SMSF loans to debt recycling as a tax-efficient strategy. He shares insights on how to allocate surplus funds, particularly in scenarios where SMSF loans carry higher interest rates than traditional investment loans.

Stuart also explores the complexities of consolidating superannuation accounts to reduce fees, particularly for retirees, and discusses the trade-offs between active financial advisers and industry super funds. Listeners curious about investment property decisions will benefit from a discussion on whether selling properties to pay off personal debts and improve borrowing capacity is a sound strategy.

The episode tackles a thought-provoking debate on property versus shares within SMSFs, weighing long-term returns, diversification, and the impact of fees. Additionally, Stuart provides a high-level look at insurance strategies, offering guidance on determining appropriate coverage for families and retirees while balancing value for money.

For those navigating tax implications in superannuation or contemplating asset reallocation, this episode offers practical advice and actionable insights tailored to the current financial climate. Don’t miss this informative discussion!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16426890 Tue, 14 Jan 2025 05:00:00 +1100 1864 full false Ep 338: What to do with your surplus cashflow in 2025? Ep 338: What to do with your surplus cashflow in 2025? New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Campbell tackles a common yet complex financial question: should you use your surplus cash flow to pay down debt or invest for the future? Starting with the goal of owning your home outright by retirement, Campbell explains why that’s a sensible priority. He then explores the less straightforward decision of managing tax-deductible debt tied to an income-producing asset, such as an investment property.

By examining realistic scenarios, Campbell reveals how strategies like paying off debt, investing in shares or utilising tax-effective super contributions each impact your long-term position. He highlights the potential benefits of maintaining leverage for tax savings, demonstrates the power of compounding returns from growth assets, and discusses the importance of having a balanced mix of property and shares. Throughout, Campbell stresses the value of cash flow forecasting—ensuring your property and investments align with your retirement plans and liquidity needs.

Whether you’re looking to maximise your financial efficiency, build a robust investment portfolio, or simply gain clarity on your best next move, this episode offers practical insights. Campbell’s guidance helps listeners navigate the trade-offs of debt reduction versus investment growth and chart a confident path toward a financially secure retirement.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Campbell tackles a common yet complex financial question: should you use your surplus cash flow to pay down debt or invest for the future? Starting with the goal of owning your home outright by retirement, Campbell explains why that’s a sensible priority. He then explores the less straightforward decision of managing tax-deductible debt tied to an income-producing asset, such as an investment property.

By examining realistic scenarios, Campbell reveals how strategies like paying off debt, investing in shares or utilising tax-effective super contributions each impact your long-term position. He highlights the potential benefits of maintaining leverage for tax savings, demonstrates the power of compounding returns from growth assets, and discusses the importance of having a balanced mix of property and shares. Throughout, Campbell stresses the value of cash flow forecasting—ensuring your property and investments align with your retirement plans and liquidity needs.

Whether you’re looking to maximise your financial efficiency, build a robust investment portfolio, or simply gain clarity on your best next move, this episode offers practical insights. Campbell’s guidance helps listeners navigate the trade-offs of debt reduction versus investment growth and chart a confident path toward a financially secure retirement.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Campbell Wallace Buzzsprout-16325278 Wed, 08 Jan 2025 05:00:00 +1100 2030 338 full false Q&A: Helping family, CGT savings in super, asset protection and more... Q&A: Helping family, CGT savings in super, asset protection and more... In this episode, Stuart addresses a variety of listener questions covering topics like helping family members plan for retirement, understanding the tax implications of superannuation options, and the intricacies of asset protection in personal and business relationships. He explores strategies to assist parents with low financial literacy, including structuring their business for tax savings and leveraging super contributions effectively.

Stuart delves into the nuances of capital gains tax in superannuation, comparing pooled and non-pooled investment options, and their impact on long-term returns. He also tackles questions about active fund management versus index options, providing an evidence-based perspective on the viability of high-fee strategies.

The episode includes a deep dive into asset protection for business owners, focusing on safeguarding assets against risks from personal and business relationships. Stuart also weighs in on the timeless debate between investing in property or shares, addressing tax implications, long-term returns, and the role of leverage in wealth creation.

Whether you're navigating family financial support, fine-tuning your super strategy, or protecting your business assets, this episode offers valuable insights and actionable advice. Don’t miss this engaging discussion!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this episode, Stuart addresses a variety of listener questions covering topics like helping family members plan for retirement, understanding the tax implications of superannuation options, and the intricacies of asset protection in personal and business relationships. He explores strategies to assist parents with low financial literacy, including structuring their business for tax savings and leveraging super contributions effectively.

Stuart delves into the nuances of capital gains tax in superannuation, comparing pooled and non-pooled investment options, and their impact on long-term returns. He also tackles questions about active fund management versus index options, providing an evidence-based perspective on the viability of high-fee strategies.

The episode includes a deep dive into asset protection for business owners, focusing on safeguarding assets against risks from personal and business relationships. Stuart also weighs in on the timeless debate between investing in property or shares, addressing tax implications, long-term returns, and the role of leverage in wealth creation.

Whether you're navigating family financial support, fine-tuning your super strategy, or protecting your business assets, this episode offers valuable insights and actionable advice. Don’t miss this engaging discussion!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16387567 Tue, 07 Jan 2025 05:00:00 +1100 2185 full false Ep 337: Property in Super… The Liquidity Trap: How to combat it. Ep 337: Property in Super… The Liquidity Trap: How to combat it. New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Campbell delves into the often-overlooked liquidity challenges of holding property within a Self-Managed Super Fund (SMSF). While the tax-friendly environment of superannuation can make SMSF property ownership seem attractive, the reality is more complex. Campbell explains how borrowing restrictions, higher interest rates, and reduced negative gearing benefits can impact returns. He also highlights the pivotal issue of maintaining liquidity once you enter the pension phase, where minimum withdrawal requirements may outpace your property’s rental income.

Through practical examples, Campbell illustrates why balancing your property investments with a substantial allocation of liquid assets—like shares, bonds, and cash—is essential. Doing so provides the flexibility to meet pension payments without being forced to sell your property under potentially unfavourable market conditions. He examines various scenarios showing how adjusting the share of property within an SMSF affects the timeframe you can comfortably hold onto it, allowing for greater potential growth and better timing for eventual sale.

By understanding these liquidity traps and managing them proactively, listeners learn how to maintain true financial freedom in retirement. This episode is a must-listen for anyone considering property investments within their SMSF, aiming to maximise returns while retaining control and flexibility.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Campbell delves into the often-overlooked liquidity challenges of holding property within a Self-Managed Super Fund (SMSF). While the tax-friendly environment of superannuation can make SMSF property ownership seem attractive, the reality is more complex. Campbell explains how borrowing restrictions, higher interest rates, and reduced negative gearing benefits can impact returns. He also highlights the pivotal issue of maintaining liquidity once you enter the pension phase, where minimum withdrawal requirements may outpace your property’s rental income.

Through practical examples, Campbell illustrates why balancing your property investments with a substantial allocation of liquid assets—like shares, bonds, and cash—is essential. Doing so provides the flexibility to meet pension payments without being forced to sell your property under potentially unfavourable market conditions. He examines various scenarios showing how adjusting the share of property within an SMSF affects the timeframe you can comfortably hold onto it, allowing for greater potential growth and better timing for eventual sale.

By understanding these liquidity traps and managing them proactively, listeners learn how to maintain true financial freedom in retirement. This episode is a must-listen for anyone considering property investments within their SMSF, aiming to maximise returns while retaining control and flexibility.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Campbell Wallace Buzzsprout-16313917 Wed, 01 Jan 2025 05:00:00 +1100 2040 337 full false Q&A: Super vs property, CGT, tax-effective loan structure, children in a SMSF and more... Q&A: Super vs property, CGT, tax-effective loan structure, children in a SMSF and more... In this week’s Q&A episode, Stuart dives into a variety of listener questions that touch on key aspects of financial planning, investment decisions, and retirement strategies. Topics include the ongoing debate of superannuation versus property investment, understanding the capital gains tax implications of rebuilding an investment property as a principal residence, and managing tax-efficient loan structures when multiple properties are involved.

Stuart also shares insights on including adult children in SMSFs, the benefits and potential drawbacks, and explores scenarios for selling well-performing properties to upgrade or capitalise on new opportunities. For expats planning future moves, Stuart offers advice on whether to invest in lifestyle properties or focus on long-term investment strategies.

Finally, he discusses how to best allocate surplus cash flow between super contributions, offset accounts, and ETFs, while considering life events like starting a family. Packed with practical guidance and tailored advice, this episode offers valuable takeaways for anyone navigating complex financial choices.

Whether you’re an investor looking to optimise your portfolio or planning for future retirement, this episode is full of actionable insights. Tune in now!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this week’s Q&A episode, Stuart dives into a variety of listener questions that touch on key aspects of financial planning, investment decisions, and retirement strategies. Topics include the ongoing debate of superannuation versus property investment, understanding the capital gains tax implications of rebuilding an investment property as a principal residence, and managing tax-efficient loan structures when multiple properties are involved.

Stuart also shares insights on including adult children in SMSFs, the benefits and potential drawbacks, and explores scenarios for selling well-performing properties to upgrade or capitalise on new opportunities. For expats planning future moves, Stuart offers advice on whether to invest in lifestyle properties or focus on long-term investment strategies.

Finally, he discusses how to best allocate surplus cash flow between super contributions, offset accounts, and ETFs, while considering life events like starting a family. Packed with practical guidance and tailored advice, this episode offers valuable takeaways for anyone navigating complex financial choices.

Whether you’re an investor looking to optimise your portfolio or planning for future retirement, this episode is full of actionable insights. Tune in now!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16332548 Tue, 31 Dec 2024 05:00:00 +1100 2051 full false Ep 336: How much growth do you need for property to outperform shares? Ep 336: How much growth do you need for property to outperform shares? New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Campbell dives into one of the most debated investment topics: property versus shares. Drawing on a practical, real-life scenario, he explores how much capital growth a property needs to produce before it outperforms a share portfolio, factoring in critical variables like leverage, tax implications, and ongoing costs. By comparing a leveraged property investment to a diversified, income-generating share portfolio, Campbell illustrates why the intuitive assumption that property will always outdo shares isn’t guaranteed.

He sheds light on the tipping point where a property’s growth rate must surpass around 5.4% just to match returns from shares—and even higher if you consider selling and incurring capital gains tax. Campbell also examines how retirement timing affects the final outcomes, revealing that selling down shares strategically can help minimise tax more effectively than selling a single, large property.

Far from a one-size-fits-all conclusion, this episode emphasises the importance of understanding the nuances of both asset classes. Whether you’re considering a property purchase, diversifying into shares, or pondering if it’s time to shift strategies, Campbell’s insights will help you make more informed decisions about where to invest your hard-earned money. Don’t miss this chance to gain clarity on a perennial investment question.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Campbell dives into one of the most debated investment topics: property versus shares. Drawing on a practical, real-life scenario, he explores how much capital growth a property needs to produce before it outperforms a share portfolio, factoring in critical variables like leverage, tax implications, and ongoing costs. By comparing a leveraged property investment to a diversified, income-generating share portfolio, Campbell illustrates why the intuitive assumption that property will always outdo shares isn’t guaranteed.

He sheds light on the tipping point where a property’s growth rate must surpass around 5.4% just to match returns from shares—and even higher if you consider selling and incurring capital gains tax. Campbell also examines how retirement timing affects the final outcomes, revealing that selling down shares strategically can help minimise tax more effectively than selling a single, large property.

Far from a one-size-fits-all conclusion, this episode emphasises the importance of understanding the nuances of both asset classes. Whether you’re considering a property purchase, diversifying into shares, or pondering if it’s time to shift strategies, Campbell’s insights will help you make more informed decisions about where to invest your hard-earned money. Don’t miss this chance to gain clarity on a perennial investment question.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Campbell Wallace Buzzsprout-16295868 Wed, 25 Dec 2024 05:00:00 +1100 1947 336 full false Q&A: Bucket companies, returns before or after tax, helping kids, early retirement and more... Q&A: Bucket companies, returns before or after tax, helping kids, early retirement and more... In this week’s Q&A episode, Stuart tackles some insightful and diverse listener questions covering tax strategies, investment structures, and retirement planning. He explains how bucket companies operate under different tax rates, the importance of comparing investment returns before and after tax, and whether family trusts can help kids leverage equity to buy property.

Stuart also explores strategies for time-poor investors with surplus cash flow, addressing whether ETFs are a viable alternative to property for those who prefer a simpler, lower-stress investment approach. For retirees and estate planners, he discusses SMSF considerations, such as whether large property assets must be sold upon death, and offers practical insights into wrap accounts versus SMSFs for direct investments.

Finally, Stuart examines how to accelerate early retirement goals, outlining how consistent surplus investing and tax-efficient strategies can generate significant passive income. Whether you’re navigating tax rules, planning for your children’s future, or aiming for financial independence, this episode is full of practical tips and evidence-based advice to help you make informed decisions.

If you’re looking for clear answers to complex financial questions, this is an episode you won’t want to miss. Tune in now!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this week’s Q&A episode, Stuart tackles some insightful and diverse listener questions covering tax strategies, investment structures, and retirement planning. He explains how bucket companies operate under different tax rates, the importance of comparing investment returns before and after tax, and whether family trusts can help kids leverage equity to buy property.

Stuart also explores strategies for time-poor investors with surplus cash flow, addressing whether ETFs are a viable alternative to property for those who prefer a simpler, lower-stress investment approach. For retirees and estate planners, he discusses SMSF considerations, such as whether large property assets must be sold upon death, and offers practical insights into wrap accounts versus SMSFs for direct investments.

Finally, Stuart examines how to accelerate early retirement goals, outlining how consistent surplus investing and tax-efficient strategies can generate significant passive income. Whether you’re navigating tax rules, planning for your children’s future, or aiming for financial independence, this episode is full of practical tips and evidence-based advice to help you make informed decisions.

If you’re looking for clear answers to complex financial questions, this is an episode you won’t want to miss. Tune in now!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16296061 Tue, 24 Dec 2024 05:00:00 +1100 1943 full false Ep 335: The long-term future of property: How will it impact investors? Ep 335: The long-term future of property: How will it impact investors? New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart delves into the long-term future of property investing in Australia and what it means for investors. With a federal election on the horizon in May 2025, housing affordability is set to take centre stage, but will it result in real change? Stuart explains why government reliance on property-related taxes makes meaningful reform unlikely.

He explores the impact of high-density "activity centres" in Melbourne and Sydney, unpacking research that suggests these developments don’t harm local property values — and may even enhance them. He also highlights the broader challenge of increasing housing supply and the role infrastructure plays in shaping property prices.

Looking ahead, Stuart discusses how emerging technologies like robotaxis could reshape commuting and influence the demand for inner-city living. Will distance from the CBD matter if you can work or relax during your commute?

With thoughtful insights and evidence-backed analysis, this episode provides clarity on how key factors like government policy, urban development, and technological advances may affect long-term property prices. Investors will leave with a clearer view of why high-quality, investment-grade properties remain a smart bet for the future. Don’t miss this forward-looking take on property investing in Australia.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart delves into the long-term future of property investing in Australia and what it means for investors. With a federal election on the horizon in May 2025, housing affordability is set to take centre stage, but will it result in real change? Stuart explains why government reliance on property-related taxes makes meaningful reform unlikely.

He explores the impact of high-density "activity centres" in Melbourne and Sydney, unpacking research that suggests these developments don’t harm local property values — and may even enhance them. He also highlights the broader challenge of increasing housing supply and the role infrastructure plays in shaping property prices.

Looking ahead, Stuart discusses how emerging technologies like robotaxis could reshape commuting and influence the demand for inner-city living. Will distance from the CBD matter if you can work or relax during your commute?

With thoughtful insights and evidence-backed analysis, this episode provides clarity on how key factors like government policy, urban development, and technological advances may affect long-term property prices. Investors will leave with a clearer view of why high-quality, investment-grade properties remain a smart bet for the future. Don’t miss this forward-looking take on property investing in Australia.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16262611 Wed, 18 Dec 2024 05:00:00 +1100 1805 335 full false Q&A: Investing in one ETF, upgrade home or invest, commercial property in SMSF and more... Q&A: Investing in one ETF, upgrade home or invest, commercial property in SMSF and more... In this Q&A episode, Stuart addresses a range of thought-provoking investment questions from listeners. He explores the simplicity and effectiveness of using a single diversified ETF, such as VDHG or DHHF, while highlighting the nuances and potential limitations of this strategy for larger portfolios. Stuart also offers tailored advice on whether to upgrade a primary residence or invest in Melbourne property, ultimately favouring the lifestyle and financial benefits of upgrading.

Listeners gain insights into how property value growth is measured, including the impact of capital improvements and why median growth rates may be misleading. He provides valuable guidance on whether self-employed individuals should leverage an SMSF to buy commercial property, advising caution around liquidity risks.

Stuart also tackles timely questions about possible changes to property investment tax laws, including potential adjustments to capital gains tax (CGT) and negative gearing. He explains how these changes could affect property yields and investor decisions.

Packed with actionable insights, this episode empowers listeners to make smarter financial choices. Whether you’re considering ETF investments, planning a property purchase, or contemplating SMSF options, Stuart’s well-rounded advice is sure to provide clarity and direction.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart addresses a range of thought-provoking investment questions from listeners. He explores the simplicity and effectiveness of using a single diversified ETF, such as VDHG or DHHF, while highlighting the nuances and potential limitations of this strategy for larger portfolios. Stuart also offers tailored advice on whether to upgrade a primary residence or invest in Melbourne property, ultimately favouring the lifestyle and financial benefits of upgrading.

Listeners gain insights into how property value growth is measured, including the impact of capital improvements and why median growth rates may be misleading. He provides valuable guidance on whether self-employed individuals should leverage an SMSF to buy commercial property, advising caution around liquidity risks.

Stuart also tackles timely questions about possible changes to property investment tax laws, including potential adjustments to capital gains tax (CGT) and negative gearing. He explains how these changes could affect property yields and investor decisions.

Packed with actionable insights, this episode empowers listeners to make smarter financial choices. Whether you’re considering ETF investments, planning a property purchase, or contemplating SMSF options, Stuart’s well-rounded advice is sure to provide clarity and direction.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16262592 Tue, 17 Dec 2024 05:00:00 +1100 1752 full false Ep 334: What important matters must you consider leading up to retirement? Ep 334: What important matters must you consider leading up to retirement? New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart Wemyss delves into the essential considerations for those planning to retire within the next five years. Drawing on his extensive expertise, Stuart outlines practical strategies to ensure a smooth transition into retirement, focusing on self-funded retirees.

Key topics include resetting loan terms to maximise flexibility, adjusting or cancelling insurance as financial independence grows, and optimising your banking arrangements while still employed. Stuart also explains the tax-saving benefits of timing capital gains events post-retirement and how superannuation strategies, such as recontributions and conservative asset allocations, can safeguard your wealth against market volatility.

For those considering a phased retirement, Stuart highlights the financial and emotional benefits of continuing part-time work, allowing investments to grow while maintaining a sense of purpose.

With actionable insights into cash flow management, superannuation liquidity, and the importance of personalising your approach, this episode is packed with valuable advice for anyone nearing retirement. Whether you’re looking to fine-tune your financial plan or explore new strategies, Stuart’s guidance ensures you’re equipped to make informed decisions for a secure and fulfilling retirement.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart Wemyss delves into the essential considerations for those planning to retire within the next five years. Drawing on his extensive expertise, Stuart outlines practical strategies to ensure a smooth transition into retirement, focusing on self-funded retirees.

Key topics include resetting loan terms to maximise flexibility, adjusting or cancelling insurance as financial independence grows, and optimising your banking arrangements while still employed. Stuart also explains the tax-saving benefits of timing capital gains events post-retirement and how superannuation strategies, such as recontributions and conservative asset allocations, can safeguard your wealth against market volatility.

For those considering a phased retirement, Stuart highlights the financial and emotional benefits of continuing part-time work, allowing investments to grow while maintaining a sense of purpose.

With actionable insights into cash flow management, superannuation liquidity, and the importance of personalising your approach, this episode is packed with valuable advice for anyone nearing retirement. Whether you’re looking to fine-tune your financial plan or explore new strategies, Stuart’s guidance ensures you’re equipped to make informed decisions for a secure and fulfilling retirement.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16229647 Wed, 11 Dec 2024 05:00:00 +1100 1915 334 full false Case Study: Outperforming long-term median property growth Case Study: Outperforming long-term median property growth New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

In this case study episode, Stuart Wemyss shares the 15-year wealth-building journey of long-term clients who successfully grew their investment assets from $479k to $3.9 million. Stuart details how this couple, now in their late 50s, strategically upgraded their family home, built a diversified property portfolio, and significantly enhanced their superannuation.

Starting in 2009 with a net worth of under $500k, their disciplined approach to asset selection and cash flow management has yielded impressive results, including outperforming median property price growth by 1–1.2% annually. Key milestones include purchasing five properties across various structures, investing in a low-cost superannuation strategy, and managing high living expenses with a combined family income of $500k.

Stuart highlights the importance of diversification, pointing out the contrasting performance of houses versus apartments in their portfolio, and how deliberate decisions, such as purchasing a property in super, ensured long-term financial security.

This episode provides valuable insights into building wealth with strategic planning and long-term focus, showcasing how Stuart’s evidence-based advice has helped clients navigate challenges while achieving remarkable financial growth. Whether you’re starting your investment journey or refining your strategy, this story is full of actionable lessons to help you succeed.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

In this case study episode, Stuart Wemyss shares the 15-year wealth-building journey of long-term clients who successfully grew their investment assets from $479k to $3.9 million. Stuart details how this couple, now in their late 50s, strategically upgraded their family home, built a diversified property portfolio, and significantly enhanced their superannuation.

Starting in 2009 with a net worth of under $500k, their disciplined approach to asset selection and cash flow management has yielded impressive results, including outperforming median property price growth by 1–1.2% annually. Key milestones include purchasing five properties across various structures, investing in a low-cost superannuation strategy, and managing high living expenses with a combined family income of $500k.

Stuart highlights the importance of diversification, pointing out the contrasting performance of houses versus apartments in their portfolio, and how deliberate decisions, such as purchasing a property in super, ensured long-term financial security.

This episode provides valuable insights into building wealth with strategic planning and long-term focus, showcasing how Stuart’s evidence-based advice has helped clients navigate challenges while achieving remarkable financial growth. Whether you’re starting your investment journey or refining your strategy, this story is full of actionable lessons to help you succeed.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16223444 Tue, 10 Dec 2024 06:00:00 +1100 1965 full false Ep 333: Future-proofing your children’s ability to buy property Ep 333: Future-proofing your children’s ability to buy property New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

Stuart highlights the growing concerns parents face about their children’s ability to enter the property market, offering a balanced strategy that prioritises parental financial security. The foundation of his advice is ensuring your own retirement is fully funded before considering financial support for your children. This prevents potential future dependency on them.

He explains that while parents may wish to help, their support should align with the child’s interest and motivation to buy property. Forcing the decision rarely works, as building wealth requires intrinsic motivation.

Stuart proposes a proactive strategy: parents purchasing an undervalued investment-grade apartment now, which can be sold to their children at a later date, potentially at a discounted rate. Melbourne’s stagnant apartment prices, combined with rising construction costs and low supply, make these properties an attractive investment likely to appreciate significantly over the next decade.

This approach ensures parents have control over their financial commitment while also providing a safety net for their children. If the child decides not to buy, parents can retain the property as an investment. Stuart advises professional guidance to navigate complexities like borrowing and inheritance planning, ensuring fairness if multiple children are involved.

Ultimately, he stresses putting your financial security first.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

Stuart highlights the growing concerns parents face about their children’s ability to enter the property market, offering a balanced strategy that prioritises parental financial security. The foundation of his advice is ensuring your own retirement is fully funded before considering financial support for your children. This prevents potential future dependency on them.

He explains that while parents may wish to help, their support should align with the child’s interest and motivation to buy property. Forcing the decision rarely works, as building wealth requires intrinsic motivation.

Stuart proposes a proactive strategy: parents purchasing an undervalued investment-grade apartment now, which can be sold to their children at a later date, potentially at a discounted rate. Melbourne’s stagnant apartment prices, combined with rising construction costs and low supply, make these properties an attractive investment likely to appreciate significantly over the next decade.

This approach ensures parents have control over their financial commitment while also providing a safety net for their children. If the child decides not to buy, parents can retain the property as an investment. Stuart advises professional guidance to navigate complexities like borrowing and inheritance planning, ensuring fairness if multiple children are involved.

Ultimately, he stresses putting your financial security first.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16179587 Wed, 04 Dec 2024 05:00:00 +1100 1764 333 full false Q&A: Moving into an investment, gearing, backyard space and choosing between two locations... Q&A: Moving into an investment, gearing, backyard space and choosing between two locations... In this Q&A episode, Stuart answers diverse listener questions, offering valuable insights into navigating complex financial decisions. Whether you’re considering moving into an investment property, leveraging equity to build a share portfolio, or deciding between two locations for your next property purchase, Stuart provides clear, actionable advice tailored to different life stages and financial goals.

He explores the implications of turning your investment property into your principal residence, unpacking tax considerations and how they impact long-term financial planning. For retirees with geared share portfolios, Stuart weighs the benefits of reducing debt versus maintaining market exposure, especially in a low-tax environment.

First home buyers aren’t left out—Stuart discusses the pros and cons of units with backyard space, their land value, and how they fit into broader investment strategies. He also tackles the age-old debate about property growth potential, addressing whether Australia’s property market can sustain its upward trajectory.

Whether you’re a seasoned investor, first-time buyer, or simply planning for the future, this episode is packed with practical advice to help you make informed decisions. Tune in for Stuart’s expert take on these questions and more!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart answers diverse listener questions, offering valuable insights into navigating complex financial decisions. Whether you’re considering moving into an investment property, leveraging equity to build a share portfolio, or deciding between two locations for your next property purchase, Stuart provides clear, actionable advice tailored to different life stages and financial goals.

He explores the implications of turning your investment property into your principal residence, unpacking tax considerations and how they impact long-term financial planning. For retirees with geared share portfolios, Stuart weighs the benefits of reducing debt versus maintaining market exposure, especially in a low-tax environment.

First home buyers aren’t left out—Stuart discusses the pros and cons of units with backyard space, their land value, and how they fit into broader investment strategies. He also tackles the age-old debate about property growth potential, addressing whether Australia’s property market can sustain its upward trajectory.

Whether you’re a seasoned investor, first-time buyer, or simply planning for the future, this episode is packed with practical advice to help you make informed decisions. Tune in for Stuart’s expert take on these questions and more!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16179386 Tue, 03 Dec 2024 05:00:00 +1100 1738 full false Ep 332: When should you sell an underperforming investment? Ep 332: When should you sell an underperforming investment? New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart tackles one of the toughest decisions investors face: when to hold onto an underperforming investment and when to cut your losses. While it’s tempting to sell and move on, legendary investor Charlie Munger reminds us, “The big money is not in the buying and the selling, but in the waiting.”

Stuart explores the natural cycles of markets—recovery, expansion, and downturn—and why timing matters. Some investments, like the S&P500 and the Nikkei 225, show that patience often pays off, even after prolonged periods of stagnation. But how do you distinguish between an investment that needs more time and one that’s fundamentally flawed?

He provides practical guidance for reassessing investments, highlighting the importance of revisiting your original decision, understanding opportunity costs, and knowing how to strategically exit when the timing is right. Stuart also shares real-world examples, from property markets to emerging markets, to help listeners make informed decisions.

Whether you’re a seasoned investor or just starting, this episode will equip you with the tools and insights to navigate the complex question of when to hold or sell. Tune in to learn how patience, perspective, and strategy can shape your investment success.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart tackles one of the toughest decisions investors face: when to hold onto an underperforming investment and when to cut your losses. While it’s tempting to sell and move on, legendary investor Charlie Munger reminds us, “The big money is not in the buying and the selling, but in the waiting.”

Stuart explores the natural cycles of markets—recovery, expansion, and downturn—and why timing matters. Some investments, like the S&P500 and the Nikkei 225, show that patience often pays off, even after prolonged periods of stagnation. But how do you distinguish between an investment that needs more time and one that’s fundamentally flawed?

He provides practical guidance for reassessing investments, highlighting the importance of revisiting your original decision, understanding opportunity costs, and knowing how to strategically exit when the timing is right. Stuart also shares real-world examples, from property markets to emerging markets, to help listeners make informed decisions.

Whether you’re a seasoned investor or just starting, this episode will equip you with the tools and insights to navigate the complex question of when to hold or sell. Tune in to learn how patience, perspective, and strategy can shape your investment success.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16172293 Wed, 27 Nov 2024 05:00:00 +1100 1922 332 full false Q&A: Tax-effective Bonus Share Plans, hedging investments, Queensland versus Melbourne, failed investments and more... Q&A: Tax-effective Bonus Share Plans, hedging investments, Queensland versus Melbourne, failed investments and more... In this Q&A episode, Stuart tackles some of the most pressing financial and property questions from listeners. With a focus on practical strategies, Stuart shares insights into managing paid-off investment properties and how leverage can impact long-term returns. He also explores tax-effective investment options, including innovative ways to reduce taxable income through bonus share plans.

For property investors, Stuart addresses concerns around rising land taxes in Victoria versus Queensland and whether investor sentiment aligns with actual holding costs. Additionally, he dives into strategies to hedge against currency fluctuations, particularly for those with significant international stock exposure, and explains how to safeguard wealth as retirement approaches.

Listeners will also gain perspective on broader market dynamics, including how forced savings, like superannuation and endowment funds, influence asset prices. Stuart doesn’t shy away from tough topics, discussing scenarios where investments haven’t performed as expected and the lessons learned from these experiences.

Whether you’re an experienced investor or just starting out, this episode is packed with actionable advice and thoughtful commentary to help you make smarter financial decisions. Tune in for Stuart’s straightforward approach to navigating complex investment landscapes!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart tackles some of the most pressing financial and property questions from listeners. With a focus on practical strategies, Stuart shares insights into managing paid-off investment properties and how leverage can impact long-term returns. He also explores tax-effective investment options, including innovative ways to reduce taxable income through bonus share plans.

For property investors, Stuart addresses concerns around rising land taxes in Victoria versus Queensland and whether investor sentiment aligns with actual holding costs. Additionally, he dives into strategies to hedge against currency fluctuations, particularly for those with significant international stock exposure, and explains how to safeguard wealth as retirement approaches.

Listeners will also gain perspective on broader market dynamics, including how forced savings, like superannuation and endowment funds, influence asset prices. Stuart doesn’t shy away from tough topics, discussing scenarios where investments haven’t performed as expected and the lessons learned from these experiences.

Whether you’re an experienced investor or just starting out, this episode is packed with actionable advice and thoughtful commentary to help you make smarter financial decisions. Tune in for Stuart’s straightforward approach to navigating complex investment landscapes!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16171486 Tue, 26 Nov 2024 05:00:00 +1100 2035 full false Ep 331: Maximising property returns: minimise holding costs while maximising growth (IRR) Ep 331: Maximising property returns: minimise holding costs while maximising growth (IRR) New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart Wemyss dives into the key strategies for maximising property investment returns by striking the right balance between holding costs and capital growth. Discover why compounding capital growth is the real driver of wealth accumulation and how to avoid common pitfalls of focusing too much on rental income.

Stuart explains the concept of the internal rate of return (IRR) and how it measures the relationship between your investment and return. Using real-world examples, he compares the outcomes of different property types, highlighting why high-growth, low-yield properties often outperform others in long-term wealth creation.

You’ll learn a practical two-step approach to maximise your IRR: first, by selecting a property with strong capital growth potential, and second, by taking steps to reduce holding costs. Stuart also shares a personal case study where simple cosmetic upgrades significantly boosted a property’s value, rental income, and IRR.

If you’re serious about building wealth through property, this episode is packed with actionable insights to help you choose the right asset, optimise returns, and accelerate your financial independence. Tune in to learn how to make smarter property investment decisions!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart Wemyss dives into the key strategies for maximising property investment returns by striking the right balance between holding costs and capital growth. Discover why compounding capital growth is the real driver of wealth accumulation and how to avoid common pitfalls of focusing too much on rental income.

Stuart explains the concept of the internal rate of return (IRR) and how it measures the relationship between your investment and return. Using real-world examples, he compares the outcomes of different property types, highlighting why high-growth, low-yield properties often outperform others in long-term wealth creation.

You’ll learn a practical two-step approach to maximise your IRR: first, by selecting a property with strong capital growth potential, and second, by taking steps to reduce holding costs. Stuart also shares a personal case study where simple cosmetic upgrades significantly boosted a property’s value, rental income, and IRR.

If you’re serious about building wealth through property, this episode is packed with actionable insights to help you choose the right asset, optimise returns, and accelerate your financial independence. Tune in to learn how to make smarter property investment decisions!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16131356 Wed, 20 Nov 2024 05:00:00 +1100 1918 331 full false Q&A: Rental growth rate assumptions, crypto, switching super funds, investment structures and more… Q&A: Rental growth rate assumptions, crypto, switching super funds, investment structures and more… In this week’s Q&A episode, Stuart dives into a range of compelling questions that challenge conventional wisdom on property investment, superannuation strategies, and emerging investment opportunities. Whether you’re curious about optimising your borrowing capacity, choosing the right ownership structure for property investments, or understanding the nuances of splitting super contributions, this episode delivers actionable insights tailored to today’s financial landscape.

Stuart also addresses thought-provoking topics like the relationship between property values and rental growth, the pros and cons of trust structures, and the implications of new access rules for Dimensional Funds. Plus, he shares his perspective on cryptocurrency as an asset class, offering a framework for evaluating new investment opportunities in an evolving market.

With real-world examples, detailed explanations, and Stuart’s trademark clarity, this episode is packed with practical advice for anyone looking to grow their wealth, minimise tax, and make informed financial decisions. Whether you’re an experienced investor or just starting to build your financial knowledge, there’s something here for everyone. Tune in to gain insights that could shape your financial future!












4o

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this week’s Q&A episode, Stuart dives into a range of compelling questions that challenge conventional wisdom on property investment, superannuation strategies, and emerging investment opportunities. Whether you’re curious about optimising your borrowing capacity, choosing the right ownership structure for property investments, or understanding the nuances of splitting super contributions, this episode delivers actionable insights tailored to today’s financial landscape.

Stuart also addresses thought-provoking topics like the relationship between property values and rental growth, the pros and cons of trust structures, and the implications of new access rules for Dimensional Funds. Plus, he shares his perspective on cryptocurrency as an asset class, offering a framework for evaluating new investment opportunities in an evolving market.

With real-world examples, detailed explanations, and Stuart’s trademark clarity, this episode is packed with practical advice for anyone looking to grow their wealth, minimise tax, and make informed financial decisions. Whether you’re an experienced investor or just starting to build your financial knowledge, there’s something here for everyone. Tune in to gain insights that could shape your financial future!












4o

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16124735 Tue, 19 Nov 2024 05:00:00 +1100 1984 full false Ep 330: Jumbo property investing: Is it worth the risk? Ep 330: Jumbo property investing: Is it worth the risk? New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart explores the concept of jumbo property investing: should you go all-in on a single high-value property or spread your investment across multiple, smaller properties? With average investment loans climbing past $600,000, many Australians face the question of whether to concentrate their budget or diversify. Stuart breaks down why a “jumbo” investment – such as buying a $3 million home in a high-demand area – might yield higher returns due to scarcity and alternative uses, like potential redevelopment. However, jumbo investing isn’t without risks, from fluctuating holding costs to limited flexibility if financial situations change.

Stuart also shares a real-world example of a client who purchased a unique property in Melbourne’s Prahran neighbourhood, turning it into a highly profitable investment. And while this approach may not be for everyone, Stuart’s insights on quality over quantity, understanding market demand, and avoiding limiting beliefs apply to all investors. Whether you’re a seasoned property investor or just beginning, this episode unpacks the risks, rewards, and essential strategies behind high-value property investing. Tune in to discover if jumbo property investing could be your path to greater returns and a robust property portfolio.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart explores the concept of jumbo property investing: should you go all-in on a single high-value property or spread your investment across multiple, smaller properties? With average investment loans climbing past $600,000, many Australians face the question of whether to concentrate their budget or diversify. Stuart breaks down why a “jumbo” investment – such as buying a $3 million home in a high-demand area – might yield higher returns due to scarcity and alternative uses, like potential redevelopment. However, jumbo investing isn’t without risks, from fluctuating holding costs to limited flexibility if financial situations change.

Stuart also shares a real-world example of a client who purchased a unique property in Melbourne’s Prahran neighbourhood, turning it into a highly profitable investment. And while this approach may not be for everyone, Stuart’s insights on quality over quantity, understanding market demand, and avoiding limiting beliefs apply to all investors. Whether you’re a seasoned property investor or just beginning, this episode unpacks the risks, rewards, and essential strategies behind high-value property investing. Tune in to discover if jumbo property investing could be your path to greater returns and a robust property portfolio.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16086357 Wed, 13 Nov 2024 05:00:00 +1100 1801 330 full false Q&A: Strategies for lower income earners, non-tax-resident investing, when to move money into super and more... Q&A: Strategies for lower income earners, non-tax-resident investing, when to move money into super and more... In this week’s Q&A episode, Stuart dives into diverse and practical strategies to help listeners navigate complex financial and investment decisions.

From a single-income family exploring the best ways to invest despite low borrowing capacity to advice for Australians living abroad, Stuart addresses the financial nuances that impact people at all stages of life. He shares tips on how a father can help his adult daughter purchase a home without jeopardising his own retirement plans, plus insights on consolidating super and investments to achieve steady cash flow in retirement.

Listeners also sought guidance on tax-efficient share investing strategies, balancing superannuation with share portfolios, and preparing for retirement abroad. For those facing similar financial dilemmas, this episode is a valuable resource filled with actionable advice and tailored financial insights.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this week’s Q&A episode, Stuart dives into diverse and practical strategies to help listeners navigate complex financial and investment decisions.

From a single-income family exploring the best ways to invest despite low borrowing capacity to advice for Australians living abroad, Stuart addresses the financial nuances that impact people at all stages of life. He shares tips on how a father can help his adult daughter purchase a home without jeopardising his own retirement plans, plus insights on consolidating super and investments to achieve steady cash flow in retirement.

Listeners also sought guidance on tax-efficient share investing strategies, balancing superannuation with share portfolios, and preparing for retirement abroad. For those facing similar financial dilemmas, this episode is a valuable resource filled with actionable advice and tailored financial insights.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16085407 Tue, 12 Nov 2024 05:00:00 +1100 2043 full false Ep 329: Avoiding costly mistakes: Choosing the right property ownership structure Ep 329: Avoiding costly mistakes: Choosing the right property ownership structure New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart dives into one of property investing's most critical decisions: choosing the right ownership structure. Since changing property ownership can trigger significant costs like stamp duty and capital gains tax, it’s essential to start with a structure that aligns with your long-term investment goals.

Stuart explains key considerations, including how tax implications, borrowing capacity, estate planning, exit strategy, and asset protection all play a role in finding the right fit. He also breaks down popular ownership options—like holding property in personal names, family trusts, companies, or self-managed super funds (SMSFs)—outlining the pros, cons, and tax implications for each.

Whether you’re looking for tax efficiency, greater flexibility, or asset protection, Stuart’s insights will help you navigate these options and avoid costly mistakes. Tune in to learn how a strategic ownership choice can maximise your returns and align with your overall financial goals.

Disclaimer: Tax and property regulations can change; consult a professional for up-to-date advice.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this episode, Stuart dives into one of property investing's most critical decisions: choosing the right ownership structure. Since changing property ownership can trigger significant costs like stamp duty and capital gains tax, it’s essential to start with a structure that aligns with your long-term investment goals.

Stuart explains key considerations, including how tax implications, borrowing capacity, estate planning, exit strategy, and asset protection all play a role in finding the right fit. He also breaks down popular ownership options—like holding property in personal names, family trusts, companies, or self-managed super funds (SMSFs)—outlining the pros, cons, and tax implications for each.

Whether you’re looking for tax efficiency, greater flexibility, or asset protection, Stuart’s insights will help you navigate these options and avoid costly mistakes. Tune in to learn how a strategic ownership choice can maximise your returns and align with your overall financial goals.

Disclaimer: Tax and property regulations can change; consult a professional for up-to-date advice.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16043159 Wed, 06 Nov 2024 05:00:00 +1100 2108 329 full false Q&A: Winding up a SMSF, CGT and whether to buy a property for your child now  Q&A: Winding up a SMSF, CGT and whether to buy a property for your child now  In this Q&A episode, Stuart covers several insightful financial scenarios, delving into when it makes sense to wind up a self-managed super fund (SMSF), strategies to manage capital gains tax (CGT), and guidance on property purchases to assist children in building wealth. Stuart examines how an SMSF with a lower balance can sometimes lead to higher costs, suggesting alternatives that may offer reduced fees and potentially better returns. Additionally, he addresses CGT concerns, highlighting tactics that can mitigate tax impacts for those facing a large one-time gain. 

A key takeaway is Stuart’s advice on supporting children’s property ownership; he explains the importance of timing, tax implications, and encouraging financial independence. His pragmatic approach underscores the need to weigh both the emotional and financial costs of early assistance, as well as the importance of financial education and empowerment. Stuart’s insights provide actionable steps for listeners at various stages of their financial journeys. Whether you’re looking to optimise your SMSF, reduce CGT, or invest for future family needs, this episode offers valuable guidance.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this Q&A episode, Stuart covers several insightful financial scenarios, delving into when it makes sense to wind up a self-managed super fund (SMSF), strategies to manage capital gains tax (CGT), and guidance on property purchases to assist children in building wealth. Stuart examines how an SMSF with a lower balance can sometimes lead to higher costs, suggesting alternatives that may offer reduced fees and potentially better returns. Additionally, he addresses CGT concerns, highlighting tactics that can mitigate tax impacts for those facing a large one-time gain. 

A key takeaway is Stuart’s advice on supporting children’s property ownership; he explains the importance of timing, tax implications, and encouraging financial independence. His pragmatic approach underscores the need to weigh both the emotional and financial costs of early assistance, as well as the importance of financial education and empowerment. Stuart’s insights provide actionable steps for listeners at various stages of their financial journeys. Whether you’re looking to optimise your SMSF, reduce CGT, or invest for future family needs, this episode offers valuable guidance.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16042979 Tue, 05 Nov 2024 05:00:00 +1100 1913 full false Ep 328: Smart strategies to manage the cost of personal insurances Ep 328: Smart strategies to manage the cost of personal insurances New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this podcast, Stuart shares smart strategies for managing the rising costs of personal insurance, covering income protection, life insurance, TPD, and trauma insurance. Recognising that insurance is often essential to avoid financial disaster, he explains that premiums for these products have significantly increased over the last decade. While many people see insurance as an all-or-nothing decision, Stuart suggests a more flexible approach: gradually reducing coverage as your financial position strengthens and your responsibilities shift, like when children reach independence.

Key points include prioritising income protection insurance, which Stuart ranks as the most crucial since it safeguards your ability to earn an income. Life insurance comes next, with TPD and trauma insurance following. Stuart also offers practical ways to manage costs, such as increasing your policy’s wait period or switching to indemnity value coverage, which can be more affordable if your income is stable. He emphasises maximising tax deductions on premiums where possible to reduce after-tax costs.

Ultimately, Stuart advocates for a long-term, adaptable strategy, reminding listeners to keep insurance in line with their evolving financial goals. This measured approach ensures essential coverage without overcommitting financially.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> New Report: The Evidence-Based Approach to Investing in Property & Shares: download here.

Read full blog here.

In this podcast, Stuart shares smart strategies for managing the rising costs of personal insurance, covering income protection, life insurance, TPD, and trauma insurance. Recognising that insurance is often essential to avoid financial disaster, he explains that premiums for these products have significantly increased over the last decade. While many people see insurance as an all-or-nothing decision, Stuart suggests a more flexible approach: gradually reducing coverage as your financial position strengthens and your responsibilities shift, like when children reach independence.

Key points include prioritising income protection insurance, which Stuart ranks as the most crucial since it safeguards your ability to earn an income. Life insurance comes next, with TPD and trauma insurance following. Stuart also offers practical ways to manage costs, such as increasing your policy’s wait period or switching to indemnity value coverage, which can be more affordable if your income is stable. He emphasises maximising tax deductions on premiums where possible to reduce after-tax costs.

Ultimately, Stuart advocates for a long-term, adaptable strategy, reminding listeners to keep insurance in line with their evolving financial goals. This measured approach ensures essential coverage without overcommitting financially.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16006919 Wed, 30 Oct 2024 05:00:00 +1100 1985 328 full false Case Study: Knowing when to hold ‘em and when to fold ‘em Case Study: Knowing when to hold ‘em and when to fold ‘em In this episode, Stuart delves into a real-life case study showcasing the journey of a couple who began working with him in 2016 with an extensive asset portfolio, substantial debt, and high income—but faced critical decisions in managing their investments effectively. Starting with their principal home valued at $1.85 million, two investment properties with marginal equity, and $900,000 in investment assets, Stuart walks through their progression to today’s robust financial position, including a debt-free home now worth $2.5 million, a holiday property, increased super, and investment assets that have nearly tripled.

Stuart emphasises that timing is key in investment success, showing how the couple’s decision to hold onto high-performing shares instead of selling them paid off. He also underlines the importance of strategy over impulsive action, with well-timed commercial property investments proving to be a lesson in patience and risk management. Key takeaways include the power of patience, quality over timing, and having a clear strategy for assets like SMSF. This episode is packed with insights into the delicate balance of knowing when to stay invested and when to make changes.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this episode, Stuart delves into a real-life case study showcasing the journey of a couple who began working with him in 2016 with an extensive asset portfolio, substantial debt, and high income—but faced critical decisions in managing their investments effectively. Starting with their principal home valued at $1.85 million, two investment properties with marginal equity, and $900,000 in investment assets, Stuart walks through their progression to today’s robust financial position, including a debt-free home now worth $2.5 million, a holiday property, increased super, and investment assets that have nearly tripled.

Stuart emphasises that timing is key in investment success, showing how the couple’s decision to hold onto high-performing shares instead of selling them paid off. He also underlines the importance of strategy over impulsive action, with well-timed commercial property investments proving to be a lesson in patience and risk management. Key takeaways include the power of patience, quality over timing, and having a clear strategy for assets like SMSF. This episode is packed with insights into the delicate balance of knowing when to stay invested and when to make changes.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-16005365 Tue, 29 Oct 2024 05:00:00 +1100 1887 full false Ep 327: Why financial advisors need in-depth knowledge & experience in BOTH property & shares Ep 327: Why financial advisors need in-depth knowledge & experience in BOTH property & shares Read full blog here.

DOWNLOAD our 97-point financial health checklist here

In this episode, Stuart discusses the significant impact property decisions have on your financial plan, which is often overlooked by financial planners. He explains that property decisions are typically life-long, whether it's purchasing a home or investment property. Many financial planners traditionally focus on shares, bonds, and superannuation, while ignoring property as part of a comprehensive financial strategy.

Stuart shares real-life client examples to highlight how property decisions intertwine with other financial choices, such as when to sell underperforming assets, managing debt during retirement, or deciding between renovating versus upgrading. He also explores strategies for buying investment properties or future homes, particularly for clients who plan to live overseas temporarily.

Stuart emphasizes that financial planners need to expand their knowledge in property to provide holistic financial advice. By integrating property into a comprehensive financial plan, planners can help clients make smarter, long-term decisions, maximising wealth potential and ensuring financial stability.

He concludes by addressing the division between financial planners and property advisors, noting that both fields must work together for optimal client outcomes, urging for more professionals to understand both asset classes.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

DOWNLOAD our 97-point financial health checklist here

In this episode, Stuart discusses the significant impact property decisions have on your financial plan, which is often overlooked by financial planners. He explains that property decisions are typically life-long, whether it's purchasing a home or investment property. Many financial planners traditionally focus on shares, bonds, and superannuation, while ignoring property as part of a comprehensive financial strategy.

Stuart shares real-life client examples to highlight how property decisions intertwine with other financial choices, such as when to sell underperforming assets, managing debt during retirement, or deciding between renovating versus upgrading. He also explores strategies for buying investment properties or future homes, particularly for clients who plan to live overseas temporarily.

Stuart emphasizes that financial planners need to expand their knowledge in property to provide holistic financial advice. By integrating property into a comprehensive financial plan, planners can help clients make smarter, long-term decisions, maximising wealth potential and ensuring financial stability.

He concludes by addressing the division between financial planners and property advisors, noting that both fields must work together for optimal client outcomes, urging for more professionals to understand both asset classes.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15947272 Wed, 23 Oct 2024 05:00:00 +1100 1990 327 full false Q&A: Commercial versus residential property, ownership structures and tax savings, Div.293 super tax and more... Q&A: Commercial versus residential property, ownership structures and tax savings, Div.293 super tax and more... In this episode, Stuart Wemyss dives into some great listener questions covering a mix of financial strategies. He kicks off with advice on debt recycling, sharing practical tips on how to construct a solid share portfolio for long-term growth. Stuart also unpacks strategies for boosting super balances, especially for those with unique super funds, offering ideas on how to make the most of salary sacrifice and contribution rules.

He then tackles a popular debate: residential versus commercial property as an investment. While commercial property might offer better returns, Stuart points out the risks and costs involved. For couples buying property together, he gives helpful tips on choosing the right ownership structure based on income differences.

There’s also a discussion about smart ways to invest for kids, with Stuart sharing thoughts on long-term strategies that keep taxes in check. Lastly, he touches on how high-income earners can deal with Division 293 tax, offering some smart planning strategies. Overall, it's packed with useful tips for managing wealth and growing investments.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this episode, Stuart Wemyss dives into some great listener questions covering a mix of financial strategies. He kicks off with advice on debt recycling, sharing practical tips on how to construct a solid share portfolio for long-term growth. Stuart also unpacks strategies for boosting super balances, especially for those with unique super funds, offering ideas on how to make the most of salary sacrifice and contribution rules.

He then tackles a popular debate: residential versus commercial property as an investment. While commercial property might offer better returns, Stuart points out the risks and costs involved. For couples buying property together, he gives helpful tips on choosing the right ownership structure based on income differences.

There’s also a discussion about smart ways to invest for kids, with Stuart sharing thoughts on long-term strategies that keep taxes in check. Lastly, he touches on how high-income earners can deal with Division 293 tax, offering some smart planning strategies. Overall, it's packed with useful tips for managing wealth and growing investments.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15947286 Tue, 22 Oct 2024 05:00:00 +1100 1779 full false Ep 326: Part 2: Pros and cons of using a wrap to invest your super Ep 326: Part 2: Pros and cons of using a wrap to invest your super Read full blog here.

DOWNLOAD our 97-point financial health checklist here

In this episode, Stuart Wemyss explores the benefits and drawbacks of using a wrap account to invest in superannuation. He explains that wrap accounts offer a similar level of transparency and control as self-managed super funds (SMSFs) but with lower costs and fewer administrative burdens. 

Stuart describes a wrap account as an investment platform that provides a wide array of options, including shares, ETFs, and managed funds, allowing users to build a diversified portfolio. It simplifies tax reporting, compliance, and performance tracking. One of the key benefits is tax efficiency—investors can avoid capital gains tax by holding assets long-term and transitioning to a pension phase upon retirement. 

However, wrap accounts come with administrative and investment fees, which, while lower than SMSFs, still need to be considered. Stuart advises that wrap accounts may be suitable for individuals with over $1 million in super, those confident in managing their investments, or those seeking financial advice. He also mentions Hub24 and Netwealth as highly rated platforms, though most wrap accounts are advisor-driven.

Ultimately, Stuart suggests wrap accounts are a solid option for investors seeking flexibility without the complexities of an SMSF.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

DOWNLOAD our 97-point financial health checklist here

In this episode, Stuart Wemyss explores the benefits and drawbacks of using a wrap account to invest in superannuation. He explains that wrap accounts offer a similar level of transparency and control as self-managed super funds (SMSFs) but with lower costs and fewer administrative burdens. 

Stuart describes a wrap account as an investment platform that provides a wide array of options, including shares, ETFs, and managed funds, allowing users to build a diversified portfolio. It simplifies tax reporting, compliance, and performance tracking. One of the key benefits is tax efficiency—investors can avoid capital gains tax by holding assets long-term and transitioning to a pension phase upon retirement. 

However, wrap accounts come with administrative and investment fees, which, while lower than SMSFs, still need to be considered. Stuart advises that wrap accounts may be suitable for individuals with over $1 million in super, those confident in managing their investments, or those seeking financial advice. He also mentions Hub24 and Netwealth as highly rated platforms, though most wrap accounts are advisor-driven.

Ultimately, Stuart suggests wrap accounts are a solid option for investors seeking flexibility without the complexities of an SMSF.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15924297 Wed, 16 Oct 2024 05:00:00 +1100 1631 326 full false Q&A: Inheritances, home loan or invest, high super balance and SMSF asset allocation Q&A: Inheritances, home loan or invest, high super balance and SMSF asset allocation DOWNLOAD our 97-point financial health checklist here.

In this engaging Q&A episode, Stuart answers pressing listener questions on financial strategies that touch on inheritance management, property decisions, SMSF contributions, and optimal allocation of discretionary income. He offers practical insights, such as whether it's more beneficial to invest surplus income or pay down a home loan, how to approach receiving an inheritance in your 20s, and what to consider if your super balance exceeds the $1.9m cap.

Stuart also dives into property investment, explaining why it might not be the right time to sell underperforming properties and when to consider reallocating funds to super. He addresses SMSF dilemmas, offering advice on whether to pay down a loan or invest in shares based on individual long-term goals. Stuart’s detailed answers help listeners navigate complex financial situations, offering clarity and actionable advice.

Whether you’re looking to grow your wealth or make smart investment decisions, this episode provides valuable strategies to consider. Listen now to hear Stuart’s thoughtful and straightforward guidance on balancing long-term growth with short-term financial choices.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> DOWNLOAD our 97-point financial health checklist here.

In this engaging Q&A episode, Stuart answers pressing listener questions on financial strategies that touch on inheritance management, property decisions, SMSF contributions, and optimal allocation of discretionary income. He offers practical insights, such as whether it's more beneficial to invest surplus income or pay down a home loan, how to approach receiving an inheritance in your 20s, and what to consider if your super balance exceeds the $1.9m cap.

Stuart also dives into property investment, explaining why it might not be the right time to sell underperforming properties and when to consider reallocating funds to super. He addresses SMSF dilemmas, offering advice on whether to pay down a loan or invest in shares based on individual long-term goals. Stuart’s detailed answers help listeners navigate complex financial situations, offering clarity and actionable advice.

Whether you’re looking to grow your wealth or make smart investment decisions, this episode provides valuable strategies to consider. Listen now to hear Stuart’s thoughtful and straightforward guidance on balancing long-term growth with short-term financial choices.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15924232 Tue, 15 Oct 2024 05:00:00 +1100 1622 full false Ep 325: Part 1: The best ways to invest your super Ep 325: Part 1: The best ways to invest your super Read full blog here.

DOWNLOAD our 97-point financial health checklist here

In this episode, Stuart provides a comprehensive overview of the best ways to invest your superannuation. He starts by exploring the landscape of industry and retail super funds, discussing the pros and cons of both. He critiques the scale and fee structures of industry super funds, noting that while they have grown significantly, their fees have not decreased proportionally. Stuart also touches on the increasing competitiveness of retail funds since the 2019 regulatory changes, highlighting Vanguard Super as a notable new player in the market.

For those seeking more control and transparency, he explains the advantages of Self-Managed Super Funds (SMSFs) but emphasises that they are only worth considering for specific types of investments, such as property. He introduces wrap products as an alternative, offering flexibility and control without the administrative burden of an SMSF. He concludes that these options can offer more control and potentially better cost-efficiency compared to traditional industry funds.

In part two of the podcast, Stuart promises to delve deeper into the costs and benefits of wrap products and help readers decide between industry, retail, wrap platforms, or SMSF based on their individual needs.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

DOWNLOAD our 97-point financial health checklist here

In this episode, Stuart provides a comprehensive overview of the best ways to invest your superannuation. He starts by exploring the landscape of industry and retail super funds, discussing the pros and cons of both. He critiques the scale and fee structures of industry super funds, noting that while they have grown significantly, their fees have not decreased proportionally. Stuart also touches on the increasing competitiveness of retail funds since the 2019 regulatory changes, highlighting Vanguard Super as a notable new player in the market.

For those seeking more control and transparency, he explains the advantages of Self-Managed Super Funds (SMSFs) but emphasises that they are only worth considering for specific types of investments, such as property. He introduces wrap products as an alternative, offering flexibility and control without the administrative burden of an SMSF. He concludes that these options can offer more control and potentially better cost-efficiency compared to traditional industry funds.

In part two of the podcast, Stuart promises to delve deeper into the costs and benefits of wrap products and help readers decide between industry, retail, wrap platforms, or SMSF based on their individual needs.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15886628 Wed, 09 Oct 2024 05:00:00 +1100 1660 325 full false Q&A- Barefoot Investor, ethical investing, how to make $1m to upgrade home in 5 years Q&A- Barefoot Investor, ethical investing, how to make $1m to upgrade home in 5 years DOWNLOAD our 97-point financial health checklist here.

In this insightful Q&A episode, Stuart Wemyss addresses a range of topics that are crucial for anyone looking to grow their wealth and make informed financial decisions. He shares his thoughts on choosing the right investment strategies, including how to balance fees and returns when selecting super funds. Stuart also explores the growing trend of ethical investing, discussing whether prioritising socially responsible investments could impact long-term returns.

For those looking to upgrade their homes or build wealth for a major purchase, Stuart offers practical advice on how to strategically plan and achieve financial goals within a set timeframe. He breaks down the key factors that drive wealth creation and provides tips on how to navigate market cycles.

Throughout the episode, Stuart’s clear and evidence-based approach offers listeners valuable insights, helping them align their investments with both personal values and long-term objectives. Whether you're close to retirement, planning a big move, or exploring the world of ethical investing, this episode provides practical strategies for anyone looking to maximise their financial potential.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> DOWNLOAD our 97-point financial health checklist here.

In this insightful Q&A episode, Stuart Wemyss addresses a range of topics that are crucial for anyone looking to grow their wealth and make informed financial decisions. He shares his thoughts on choosing the right investment strategies, including how to balance fees and returns when selecting super funds. Stuart also explores the growing trend of ethical investing, discussing whether prioritising socially responsible investments could impact long-term returns.

For those looking to upgrade their homes or build wealth for a major purchase, Stuart offers practical advice on how to strategically plan and achieve financial goals within a set timeframe. He breaks down the key factors that drive wealth creation and provides tips on how to navigate market cycles.

Throughout the episode, Stuart’s clear and evidence-based approach offers listeners valuable insights, helping them align their investments with both personal values and long-term objectives. Whether you're close to retirement, planning a big move, or exploring the world of ethical investing, this episode provides practical strategies for anyone looking to maximise their financial potential.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15880971 Tue, 08 Oct 2024 05:00:00 +1100 1923 full false Ep 324: Which indicators are most important to property investors? Ep 324: Which indicators are most important to property investors? DOWNLOAD our 97-point financial health checklist here.

Read full blog here.

In this episode, Stuart delves into the key indicators property investors should pay attention to, beyond the typical headlines. While economic factors like interest rates and unemployment often dominate discussions, Stuart explains why understanding the psychology of owner-occupiers and credit policy settings is crucial. With over two decades of experience, he shares insights from his recent interview with David Bassanese, highlighting how behavioural finance and lending conditions impact property price movements. Stuart also breaks down the importance of interstate migration trends, which reflect homeowner sentiment and can signal changes in the market. He critiques the overemphasis on housing supply shortages and discusses how credit restrictions are pushing investors towards more affordable areas, contributing to price growth in cities like Perth and Adelaide. This episode provides a deeper look into what truly drives property price growth and offers valuable advice for making informed investment decisions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> DOWNLOAD our 97-point financial health checklist here.

Read full blog here.

In this episode, Stuart delves into the key indicators property investors should pay attention to, beyond the typical headlines. While economic factors like interest rates and unemployment often dominate discussions, Stuart explains why understanding the psychology of owner-occupiers and credit policy settings is crucial. With over two decades of experience, he shares insights from his recent interview with David Bassanese, highlighting how behavioural finance and lending conditions impact property price movements. Stuart also breaks down the importance of interstate migration trends, which reflect homeowner sentiment and can signal changes in the market. He critiques the overemphasis on housing supply shortages and discusses how credit restrictions are pushing investors towards more affordable areas, contributing to price growth in cities like Perth and Adelaide. This episode provides a deeper look into what truly drives property price growth and offers valuable advice for making informed investment decisions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15826018 Wed, 02 Oct 2024 05:00:00 +1000 1849 324 full false Case Study: $60k of investment assets to $1.6 million in 8 years Case Study: $60k of investment assets to $1.6 million in 8 years DOWNLOAD our 97-point financial health checklist here.

In this episode, Stuart takes you through an incredible case study of a young couple who transformed their finances, growing their net worth from $60k of investment assets to over $1.6 million in just 8 years. When they started working with Stuart in 2016, they were 28 years old, and had a home valued at $400k, $60k in super, and $100k in HECS debt.

Stuart explains how they strategically purchased two investment properties, including a Queensland property that doubled in value to $1.6 million. They also acquired a dental practice, adding another $400k in equity. By 2024, their net worth had skyrocketed to over $3 million, thanks to their successful investments in property, super, and shares.

This episode highlights the importance of laying a strong investment foundation and using tailored advice to achieve long-term financial goals. Stuart shares valuable insights on timing, structuring, and even the challenges of overcapitalising. Whether you're starting out or looking to grow your wealth, this case study showcases how strategic planning and disciplined execution can lead to impressive financial growth.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> DOWNLOAD our 97-point financial health checklist here.

In this episode, Stuart takes you through an incredible case study of a young couple who transformed their finances, growing their net worth from $60k of investment assets to over $1.6 million in just 8 years. When they started working with Stuart in 2016, they were 28 years old, and had a home valued at $400k, $60k in super, and $100k in HECS debt.

Stuart explains how they strategically purchased two investment properties, including a Queensland property that doubled in value to $1.6 million. They also acquired a dental practice, adding another $400k in equity. By 2024, their net worth had skyrocketed to over $3 million, thanks to their successful investments in property, super, and shares.

This episode highlights the importance of laying a strong investment foundation and using tailored advice to achieve long-term financial goals. Stuart shares valuable insights on timing, structuring, and even the challenges of overcapitalising. Whether you're starting out or looking to grow your wealth, this case study showcases how strategic planning and disciplined execution can lead to impressive financial growth.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15841852 Tue, 01 Oct 2024 05:00:00 +1000 1789 full false Ep 323: Warning: Don’t base decisions on property data! Ep 323: Warning: Don’t base decisions on property data! DOWNLOAD our 97-point financial health checklist here.

Read full blog here.

In this episode, Stuart sheds light on the pitfalls of relying too heavily on property data when making investment decisions. While data can be a valuable tool, he explains why it's often misleading in the property market, especially compared to the more reliable stock market data. Stuart dives into the wide variations between different data publishers—highlighting examples where property price changes ranged from 3.3% to 16.7% in the same year! 

He breaks down the key limitations of suburb-level data, explaining how thinly traded markets and individual sales can distort the true value of a property. Stuart also cautions that factors like poor marketing campaigns or emotionally driven buyers can skew sales prices, making it even harder to rely solely on data.

For those serious about property investing, Stuart emphasises the importance of combining data with local expertise. He discusses why two-thirds of property buyers are motivated by lifestyle choices rather than financial gain, adding another layer of complexity to the market. 

If you’re looking to navigate the property market smartly, this episode is a must-listen, offering actionable advice on how to avoid data traps and make informed, confident investment decisions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> DOWNLOAD our 97-point financial health checklist here.

Read full blog here.

In this episode, Stuart sheds light on the pitfalls of relying too heavily on property data when making investment decisions. While data can be a valuable tool, he explains why it's often misleading in the property market, especially compared to the more reliable stock market data. Stuart dives into the wide variations between different data publishers—highlighting examples where property price changes ranged from 3.3% to 16.7% in the same year! 

He breaks down the key limitations of suburb-level data, explaining how thinly traded markets and individual sales can distort the true value of a property. Stuart also cautions that factors like poor marketing campaigns or emotionally driven buyers can skew sales prices, making it even harder to rely solely on data.

For those serious about property investing, Stuart emphasises the importance of combining data with local expertise. He discusses why two-thirds of property buyers are motivated by lifestyle choices rather than financial gain, adding another layer of complexity to the market. 

If you’re looking to navigate the property market smartly, this episode is a must-listen, offering actionable advice on how to avoid data traps and make informed, confident investment decisions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15802263 Wed, 25 Sep 2024 05:00:00 +1000 1693 323 full false Q&A: Index property v. direct, using a family trust, super strategy and more Q&A: Index property v. direct, using a family trust, super strategy and more DOWNLOAD our 97-point financial health checklist here.

In this Q&A episode, Stuart tackles a variety of listener questions.

Key topics include commercial property investment funds versus index funds, superannuation strategies, trust structures for investments, financial priorities during maternity leave, employee share risks, and eligibility for first home owner grants.  

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> DOWNLOAD our 97-point financial health checklist here.

In this Q&A episode, Stuart tackles a variety of listener questions.

Key topics include commercial property investment funds versus index funds, superannuation strategies, trust structures for investments, financial priorities during maternity leave, employee share risks, and eligibility for first home owner grants.  

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15798678 Tue, 24 Sep 2024 05:00:00 +1000 1612 full false Ep 322: 4 steps to take before meeting a financial advisor Ep 322: 4 steps to take before meeting a financial advisor DOWNLOAD our 97-point financial health checklist here.

Read full blog here.

In this episode, Stuart dives into the rising cost of financial advice and what it means for Australians. With ongoing advisor fees often starting at $5,000 per year, many advisors now focus on long-term client relationships, leaving fewer options for those seeking once-off advice. Stuart explains how this shift forces many to navigate financial decisions independently, a challenge that can be daunting but not impossible.

He shares four key steps to take before hiring a financial advisor: first, get a clear understanding of your cash flow; second, educate yourself on fundamental financial concepts like superannuation, property vs shares, and leveraging debt to invest; third, assess whether your next financial move is obvious or if you truly need strategic advice; and finally, make sure your financial house is in order by addressing any outstanding issues like consolidating super or building a savings buffer.

Stuart's advice empowers listeners to take proactive steps toward financial independence while highlighting when it might be necessary to seek professional help. Whether you're just starting your wealth-building journey or considering your next big move, this episode offers practical guidance to help you make smarter financial decisions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> DOWNLOAD our 97-point financial health checklist here.

Read full blog here.

In this episode, Stuart dives into the rising cost of financial advice and what it means for Australians. With ongoing advisor fees often starting at $5,000 per year, many advisors now focus on long-term client relationships, leaving fewer options for those seeking once-off advice. Stuart explains how this shift forces many to navigate financial decisions independently, a challenge that can be daunting but not impossible.

He shares four key steps to take before hiring a financial advisor: first, get a clear understanding of your cash flow; second, educate yourself on fundamental financial concepts like superannuation, property vs shares, and leveraging debt to invest; third, assess whether your next financial move is obvious or if you truly need strategic advice; and finally, make sure your financial house is in order by addressing any outstanding issues like consolidating super or building a savings buffer.

Stuart's advice empowers listeners to take proactive steps toward financial independence while highlighting when it might be necessary to seek professional help. Whether you're just starting your wealth-building journey or considering your next big move, this episode offers practical guidance to help you make smarter financial decisions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15757197 Wed, 18 Sep 2024 05:00:00 +1000 1538 322 full false Case Study: 5.9x increase in investment assets in only 6 years Case Study: 5.9x increase in investment assets in only 6 years DOWNLOAD our 97-point financial health checklist here.

In this episode, Stuart explores a remarkable case study of a client who increased their investment assets by 5.9 times in just six years. Starting in 2018 with a net worth of $2.9 million, primarily in home equity and superannuation, the client has grown their wealth to $5.1 million today, marking a 170% increase in net worth. Stuart breaks down the key factors behind this success, including the strategic purchase of a Queensland property in 2018, which gained over $700k in equity, and an Elwood apartment in 2022.

Stuart also highlights the importance of market timing, strong investment in superannuation, and careful cash flow management, which allowed the client to invest in renovations, super, and a corporate beneficiary. The case study underscores the value of timely advice and disciplined financial planning.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> DOWNLOAD our 97-point financial health checklist here.

In this episode, Stuart explores a remarkable case study of a client who increased their investment assets by 5.9 times in just six years. Starting in 2018 with a net worth of $2.9 million, primarily in home equity and superannuation, the client has grown their wealth to $5.1 million today, marking a 170% increase in net worth. Stuart breaks down the key factors behind this success, including the strategic purchase of a Queensland property in 2018, which gained over $700k in equity, and an Elwood apartment in 2022.

Stuart also highlights the importance of market timing, strong investment in superannuation, and careful cash flow management, which allowed the client to invest in renovations, super, and a corporate beneficiary. The case study underscores the value of timely advice and disciplined financial planning.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15757176 Tue, 17 Sep 2024 05:00:00 +1000 1665 full false Ep 321: Interest Rates in 2025: Cut or Comeback? Ep 321: Interest Rates in 2025: Cut or Comeback? DOWNLOAD our 97-point financial health checklist here.

Read full blog here.

In this episode, Stuart explores the ongoing debate about the future of interest rates and inflation, addressing key questions about when the Reserve Bank of Australia (RBA) might begin cutting rates. He highlights the disparity between the RBA’s forecasts, which predict inflation will only stabilise by 2026, and market expectations, which signal rate cuts as early as 2025. Drawing on historical trends and market insights, Stuart discusses the potential risks of prolonged inflation and how government spending and a tight labour market are contributing to this issue.

He also explains why Australia’s current strategy differs from other countries, noting that our reliance on variable-rate mortgages makes consumers more sensitive to rate changes. With historical data showing inflation often reaccelerates Stuart cautions that any potential rate cuts in 2025 could be short-lived, leading to further hikes.

Stuart offers a balanced view on whether the RBA can achieve the elusive "soft landing" or if more economic pain lies ahead. This episode is essential listening for anyone interested in understanding the complex factors shaping Australia's economic future.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> DOWNLOAD our 97-point financial health checklist here.

Read full blog here.

In this episode, Stuart explores the ongoing debate about the future of interest rates and inflation, addressing key questions about when the Reserve Bank of Australia (RBA) might begin cutting rates. He highlights the disparity between the RBA’s forecasts, which predict inflation will only stabilise by 2026, and market expectations, which signal rate cuts as early as 2025. Drawing on historical trends and market insights, Stuart discusses the potential risks of prolonged inflation and how government spending and a tight labour market are contributing to this issue.

He also explains why Australia’s current strategy differs from other countries, noting that our reliance on variable-rate mortgages makes consumers more sensitive to rate changes. With historical data showing inflation often reaccelerates Stuart cautions that any potential rate cuts in 2025 could be short-lived, leading to further hikes.

Stuart offers a balanced view on whether the RBA can achieve the elusive "soft landing" or if more economic pain lies ahead. This episode is essential listening for anyone interested in understanding the complex factors shaping Australia's economic future.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15722290 Wed, 11 Sep 2024 05:00:00 +1000 1769 full false Q&A: Regional v. blue-chip, sell 50% to my partner, when to take profits and more Q&A: Regional v. blue-chip, sell 50% to my partner, when to take profits and more DOWNLOAD our 97-point financial health checklist here.

In this Q&A episode, Stuart tackles a variety of listener questions on property investment, super contributions, and share portfolios. One listener asks whether it’s wise to leverage for an investment property now, even if it might need to be sold in the next five years. Stuart emphasises the long-term benefits of property ownership, combining gearing with time, and suggests a strategy to buy an upgraded home and rent it out.

Another listener seeks advice on redirecting voluntary super contributions to their mortgage for short-term cash flow relief amid rising interest rates. Stuart supports this approach, provided cash flow is well-managed, noting that adjusting investments during economic challenges is common.

There’s also a query about when to sell single stocks that have performed well. Stuart provides a straightforward framework to evaluate stocks based on value and growth prospects, offering practical advice on taking profits.

Stuart also advises on whether to convert a super fund into a wrap account 10 years before retirement, weighing the costs of capital gains tax and the potential benefits of professional advice. This episode provides valuable insights into key financial decisions across different life stages.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> DOWNLOAD our 97-point financial health checklist here.

In this Q&A episode, Stuart tackles a variety of listener questions on property investment, super contributions, and share portfolios. One listener asks whether it’s wise to leverage for an investment property now, even if it might need to be sold in the next five years. Stuart emphasises the long-term benefits of property ownership, combining gearing with time, and suggests a strategy to buy an upgraded home and rent it out.

Another listener seeks advice on redirecting voluntary super contributions to their mortgage for short-term cash flow relief amid rising interest rates. Stuart supports this approach, provided cash flow is well-managed, noting that adjusting investments during economic challenges is common.

There’s also a query about when to sell single stocks that have performed well. Stuart provides a straightforward framework to evaluate stocks based on value and growth prospects, offering practical advice on taking profits.

Stuart also advises on whether to convert a super fund into a wrap account 10 years before retirement, weighing the costs of capital gains tax and the potential benefits of professional advice. This episode provides valuable insights into key financial decisions across different life stages.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15722242 Tue, 10 Sep 2024 05:00:00 +1000 1725 full false Ep 320: How long does it take for an investment property to cover its costs? Ep 320: How long does it take for an investment property to cover its costs? DOWNLOAD our 97-point financial health checklist here.

Read full blog here.

In this episode, Stuart tackles a crucial question for property investors: How long does it take for an investment property to cover its costs? He delves into the cash flow dynamics of property investment, explaining why most properties start as cash flow negative and what you can do to improve this over time.

Stuart discusses the importance of understanding the timeline for your property to become cash flow neutral, especially in the context of retirement planning. He explores strategies like debt reduction through offset accounts, making capital improvements to boost rental income, and how these actions can accelerate your property’s journey to positive cash flow.

The episode also examines the potential trade-offs of selling a property to reduce debt and improve cash flow, highlighting when this might be a viable option. Stuart emphasizes the need for a long-term plan that includes both acquiring high-quality assets and proactively managing cash flow to ensure your property portfolio supports your financial goals, particularly as you approach retirement.

If you're navigating the complexities of property investment, this episode offers practical insights to help you make informed decisions and maximise your investment's potential.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> DOWNLOAD our 97-point financial health checklist here.

Read full blog here.

In this episode, Stuart tackles a crucial question for property investors: How long does it take for an investment property to cover its costs? He delves into the cash flow dynamics of property investment, explaining why most properties start as cash flow negative and what you can do to improve this over time.

Stuart discusses the importance of understanding the timeline for your property to become cash flow neutral, especially in the context of retirement planning. He explores strategies like debt reduction through offset accounts, making capital improvements to boost rental income, and how these actions can accelerate your property’s journey to positive cash flow.

The episode also examines the potential trade-offs of selling a property to reduce debt and improve cash flow, highlighting when this might be a viable option. Stuart emphasizes the need for a long-term plan that includes both acquiring high-quality assets and proactively managing cash flow to ensure your property portfolio supports your financial goals, particularly as you approach retirement.

If you're navigating the complexities of property investment, this episode offers practical insights to help you make informed decisions and maximise your investment's potential.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15667358 Wed, 04 Sep 2024 05:00:00 +1000 1753 320 full false Case Study: Cleaning up investments and ownership structures Case Study: Cleaning up investments and ownership structures In this case study episode, Stuart delves into the transformative journey of a couple who started working with Prosolution in their mid-40s, back in September 2016, with a $900k investment portfolio. Over the past eight years, they've grown their investment assets to $2.5 million, a remarkable 2.8x increase.

Stuart discusses how Prosolution played a crucial role in cleaning up their investments and ownership structures, including eliminating expensive managed funds, optimising direct shares, and strategically using a trust with a corporate beneficiary. The clients also benefited from expert guidance on superannuation and smart allocation of surplus cash flow.

One of the significant moves was purchasing an investment property in 2017, which has appreciated by $200k. Stuart also shares insights into the emotional relief the clients experienced by outsourcing complex financial decisions, allowing them to focus on their careers and personal lives.

Throughout the episode, Stuart highlights the importance of tax efficiency through corporate beneficiaries, super contributions, and gearing strategies, noting that while gearing hasn't fully matured yet, it's a solid foundation for future growth. This episode offers valuable lessons on wealth management and strategic financial planning.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this case study episode, Stuart delves into the transformative journey of a couple who started working with Prosolution in their mid-40s, back in September 2016, with a $900k investment portfolio. Over the past eight years, they've grown their investment assets to $2.5 million, a remarkable 2.8x increase.

Stuart discusses how Prosolution played a crucial role in cleaning up their investments and ownership structures, including eliminating expensive managed funds, optimising direct shares, and strategically using a trust with a corporate beneficiary. The clients also benefited from expert guidance on superannuation and smart allocation of surplus cash flow.

One of the significant moves was purchasing an investment property in 2017, which has appreciated by $200k. Stuart also shares insights into the emotional relief the clients experienced by outsourcing complex financial decisions, allowing them to focus on their careers and personal lives.

Throughout the episode, Stuart highlights the importance of tax efficiency through corporate beneficiaries, super contributions, and gearing strategies, noting that while gearing hasn't fully matured yet, it's a solid foundation for future growth. This episode offers valuable lessons on wealth management and strategic financial planning.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15667353 Tue, 03 Sep 2024 05:00:00 +1000 1787 full false Ep 319: How to determine whether financial advice is worth the cost Ep 319: How to determine whether financial advice is worth the cost DOWNLOAD our 97-point financial health checklist here.

Read full blog here.

In this episode, Stuart explores the critical question of whether financial advice is worth the cost. He delves into how the value of advice is closely tied to the amount you have to invest, the complexity of your financial needs, and the range of services required. 

Stuart highlights how professional advice can optimise investment returns, reduce taxes, and prevent costly mistakes through behavioural coaching. He also discusses the true value of advice, emphasising its role in helping you achieve long-term lifestyle goals rather than merely chasing returns. 

Additionally, Stuart provides a breakdown of the costs associated with financial advice and shares insights on when it might be better to take a DIY approach to managing your finances. 

This episode is packed with practical guidance for anyone considering whether to engage a financial advisor.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> DOWNLOAD our 97-point financial health checklist here.

Read full blog here.

In this episode, Stuart explores the critical question of whether financial advice is worth the cost. He delves into how the value of advice is closely tied to the amount you have to invest, the complexity of your financial needs, and the range of services required. 

Stuart highlights how professional advice can optimise investment returns, reduce taxes, and prevent costly mistakes through behavioural coaching. He also discusses the true value of advice, emphasising its role in helping you achieve long-term lifestyle goals rather than merely chasing returns. 

Additionally, Stuart provides a breakdown of the costs associated with financial advice and shares insights on when it might be better to take a DIY approach to managing your finances. 

This episode is packed with practical guidance for anyone considering whether to engage a financial advisor.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15647641 Wed, 28 Aug 2024 05:00:00 +1000 1800 319 full false Q&A: Answers to interesting listener questions Q&A: Answers to interesting listener questions DOWNLOAD our 97-point financial health checklist here.

In this Q&A episode, Stuart answers a range of insightful questions from listeners, covering various aspects of property investment, share market strategies, and borrowing capacity. He discusses the best vehicles for holding investments, such as companies, trusts, and superannuation, and offers his perspective on why the Adelaide property market has remained strong despite its economic challenges. Stuart also delves into the use of trust structures for building a property portfolio, weighing the benefits against the potential drawbacks like higher costs and reduced negative gearing benefits.

Listeners will also hear Stuart's thoughts on whether income-yielding locations can match the performance of high-growth cities over the long term and how to approach investments in affordable markets. Additionally, Stuart offers advice on navigating borrowing capacity issues when investing in property and whether renting might be a more strategic option when planning significant property projects.

This episode is packed with practical advice and expert insights tailored to the current market conditions, making it a must-listen for anyone looking to make informed decisions in their investment journey.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> DOWNLOAD our 97-point financial health checklist here.

In this Q&A episode, Stuart answers a range of insightful questions from listeners, covering various aspects of property investment, share market strategies, and borrowing capacity. He discusses the best vehicles for holding investments, such as companies, trusts, and superannuation, and offers his perspective on why the Adelaide property market has remained strong despite its economic challenges. Stuart also delves into the use of trust structures for building a property portfolio, weighing the benefits against the potential drawbacks like higher costs and reduced negative gearing benefits.

Listeners will also hear Stuart's thoughts on whether income-yielding locations can match the performance of high-growth cities over the long term and how to approach investments in affordable markets. Additionally, Stuart offers advice on navigating borrowing capacity issues when investing in property and whether renting might be a more strategic option when planning significant property projects.

This episode is packed with practical advice and expert insights tailored to the current market conditions, making it a must-listen for anyone looking to make informed decisions in their investment journey.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15628260 Tue, 27 Aug 2024 05:00:00 +1000 1593 full false Ep 318: Why does Australia’s share market always underperform? Ep 318: Why does Australia’s share market always underperform? DOWNLOAD our 97-point financial health checklist here.

Read full blog here.

In this episode, Stuart delves into why Australia’s share market often seems to underperform compared to global markets, despite occasional bright spots. He reflects on the recent 6% market drop followed by a modest recovery in Australia compared to the US. While historical data shows a relatively small difference in long-term returns between Australian and international markets, Stuart highlights how recent years have been driven by the tech boom, particularly in the US. Companies like the "Magnificent 7" have propelled global indexes, but Stuart cautions that their future growth may already be priced in, making them riskier investments moving forward.

He discusses forecasts by Research Affiliates, predicting strong future returns for the Australian market, largely driven by high dividend yields. With expected annual returns of 7.9% for Australian shares, Stuart argues that Australia could outperform global markets in the coming decade. However, he advises against neglecting international exposure, as Australia makes up only a small portion of global markets and is heavily concentrated in sectors like mining and banking. This episode is packed with insights for investors looking to optimise their portfolios for the future.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> DOWNLOAD our 97-point financial health checklist here.

Read full blog here.

In this episode, Stuart delves into why Australia’s share market often seems to underperform compared to global markets, despite occasional bright spots. He reflects on the recent 6% market drop followed by a modest recovery in Australia compared to the US. While historical data shows a relatively small difference in long-term returns between Australian and international markets, Stuart highlights how recent years have been driven by the tech boom, particularly in the US. Companies like the "Magnificent 7" have propelled global indexes, but Stuart cautions that their future growth may already be priced in, making them riskier investments moving forward.

He discusses forecasts by Research Affiliates, predicting strong future returns for the Australian market, largely driven by high dividend yields. With expected annual returns of 7.9% for Australian shares, Stuart argues that Australia could outperform global markets in the coming decade. However, he advises against neglecting international exposure, as Australia makes up only a small portion of global markets and is heavily concentrated in sectors like mining and banking. This episode is packed with insights for investors looking to optimise their portfolios for the future.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15604297 Wed, 21 Aug 2024 05:00:00 +1000 1744 318 full false Case Study: 3.2x investment asset in 9 years Case Study: 3.2x investment asset in 9 years DOWNLOAD our 97-point financial health checklist here: https://prosolution.com.au/download-checklist/

In this case study episode, Stuart takes listeners through a fascinating client journey that showcases a 3.2x growth in investment assets over nine years. Starting with a net worth of $2.7 million in 2015, the clients have seen their wealth soar to $6.5 million by leveraging smart financial strategies. Stuart shares how they helped these clients build a $3.5 million home, increase equity in a holiday property from $350k to $1.6 million, and boost their superannuation from $700k to $2.15 million. They also acquired an investment property in Clifton Hill, which is set to underpin future super growth despite modest initial returns.

The episode highlights key learnings, including the importance of having a clear strategy around repaying home debt, divesting employee shares to reduce debt, and optimising superannuation for maximum returns. Stuart reflects on how the COVID boom perfectly timed the holiday house investment and explains why planning is ultimately about achieving life goals, not just financial returns. Whether you're looking for practical insights or inspiration from real-life success, this episode delivers both.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> DOWNLOAD our 97-point financial health checklist here: https://prosolution.com.au/download-checklist/

In this case study episode, Stuart takes listeners through a fascinating client journey that showcases a 3.2x growth in investment assets over nine years. Starting with a net worth of $2.7 million in 2015, the clients have seen their wealth soar to $6.5 million by leveraging smart financial strategies. Stuart shares how they helped these clients build a $3.5 million home, increase equity in a holiday property from $350k to $1.6 million, and boost their superannuation from $700k to $2.15 million. They also acquired an investment property in Clifton Hill, which is set to underpin future super growth despite modest initial returns.

The episode highlights key learnings, including the importance of having a clear strategy around repaying home debt, divesting employee shares to reduce debt, and optimising superannuation for maximum returns. Stuart reflects on how the COVID boom perfectly timed the holiday house investment and explains why planning is ultimately about achieving life goals, not just financial returns. Whether you're looking for practical insights or inspiration from real-life success, this episode delivers both.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15604266 Tue, 20 Aug 2024 05:00:00 +1000 1568 full false Ep 317: Liveinvesting: is now the perfect time to consider this strategy? Ep 317: Liveinvesting: is now the perfect time to consider this strategy? DOWNLOAD our 97-point financial health checklist here: https://prosolution.com.au/download-checklist/

Read full blog here.

In this episode, Stuart revisits the concept of "liveinvesting," a strategy where you invest more in your family home to secure a prime location with strong growth potential. As property prices in cities like Melbourne are currently more affordable, Stuart explores whether now is the perfect time to implement this approach.

He explains how liveinvesting can offer significant tax-free capital growth, improve your lifestyle, and boost your retirement savings by downsizing later. However, Stuart also highlights the risks, including the lack of tax-deductible home loan interest, concentration risk, and the potential emotional challenge of downsizing in the future.

With Melbourne's property market poised for potential growth and interest rates likely to stabilize, Stuart discusses why this might be an opportune moment to consider liveinvesting. 

Tune in to learn more about this innovative strategy and whether it could be the right move for your financial future.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> DOWNLOAD our 97-point financial health checklist here: https://prosolution.com.au/download-checklist/

Read full blog here.

In this episode, Stuart revisits the concept of "liveinvesting," a strategy where you invest more in your family home to secure a prime location with strong growth potential. As property prices in cities like Melbourne are currently more affordable, Stuart explores whether now is the perfect time to implement this approach.

He explains how liveinvesting can offer significant tax-free capital growth, improve your lifestyle, and boost your retirement savings by downsizing later. However, Stuart also highlights the risks, including the lack of tax-deductible home loan interest, concentration risk, and the potential emotional challenge of downsizing in the future.

With Melbourne's property market poised for potential growth and interest rates likely to stabilize, Stuart discusses why this might be an opportune moment to consider liveinvesting. 

Tune in to learn more about this innovative strategy and whether it could be the right move for your financial future.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15568109 Wed, 14 Aug 2024 05:00:00 +1000 1755 317 full false Q&A: Answers to interesting listener questions Q&A: Answers to interesting listener questions Do you have a question? Email questions@investopoly.com.au and Stuart may answer it in the podcast.

In this episode, Stuart tackles a variety of financial questions, offering expert insights and practical advice on key dilemmas. He begins by discussing whether to sell an investment property to reduce a home loan or hold onto it for long-term growth, weighing the potential returns against the benefits of paying off a mortgage early.

Next, Stuart examines the pros and cons of maintaining an investment property in retirement versus selling it to invest the proceeds into superannuation, exploring the balance between capital growth and tax efficiency.

He then delves into the risks and timing considerations of leveraging home equity to invest in ETFs, cautioning against the potential pitfalls of borrowing to invest.

Stuart also touches on the implications of moving into the pension phase while living overseas, including tax residency considerations and how this might affect Australian superannuation.

Additionally, he provides guidance on constructing a well-diversified, ESG-compliant share portfolio, offering insights into selecting ETFs that align with long-term investment goals.

Finally, Stuart explains strategies for boosting superannuation, such as contribution splitting, to help maximize retirement savings. 

Tune in to gain valuable financial knowledge and learn how to navigate these complex topics with confidence.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Do you have a question? Email questions@investopoly.com.au and Stuart may answer it in the podcast.

In this episode, Stuart tackles a variety of financial questions, offering expert insights and practical advice on key dilemmas. He begins by discussing whether to sell an investment property to reduce a home loan or hold onto it for long-term growth, weighing the potential returns against the benefits of paying off a mortgage early.

Next, Stuart examines the pros and cons of maintaining an investment property in retirement versus selling it to invest the proceeds into superannuation, exploring the balance between capital growth and tax efficiency.

He then delves into the risks and timing considerations of leveraging home equity to invest in ETFs, cautioning against the potential pitfalls of borrowing to invest.

Stuart also touches on the implications of moving into the pension phase while living overseas, including tax residency considerations and how this might affect Australian superannuation.

Additionally, he provides guidance on constructing a well-diversified, ESG-compliant share portfolio, offering insights into selecting ETFs that align with long-term investment goals.

Finally, Stuart explains strategies for boosting superannuation, such as contribution splitting, to help maximize retirement savings. 

Tune in to gain valuable financial knowledge and learn how to navigate these complex topics with confidence.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15567852 Tue, 13 Aug 2024 05:00:00 +1000 1844 full false EP 316: 6 important considerations when selling a property EP 316: 6 important considerations when selling a property DOWNLOAD our 97-point financial health checklist here: https://prosolution.com.au/download-checklist/

Read full blog here.

In this episode, Stuart delves into the six crucial considerations for selling a property, offering valuable insights to maximise your success. He begins by emphasizing the importance of presentation and making small improvements to attract buyers and achieve a higher sale price. Stuart discusses the best times to sell, noting that while spring is popular, other seasons might be more advantageous depending on your property's unique features and location.

Choosing the right real estate agent is highlighted as a key factor, with Stuart advising on what to look for in an agent and the benefits of vendor advocates. He then covers the complexities of taxation, explaining how Capital Gains Tax (CGT) can impact your sale and offering strategies to minimize liability. Mortgage management is another critical topic, as Stuart outlines steps to ensure you retain control over the sale proceeds.

Finally, Stuart addresses tenancy agreements, providing guidance on selling tenanted properties and the importance of planning ahead. This episode is packed with practical advice and expert tips to help you navigate the property selling process with confidence and success. Don't miss it!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> DOWNLOAD our 97-point financial health checklist here: https://prosolution.com.au/download-checklist/

Read full blog here.

In this episode, Stuart delves into the six crucial considerations for selling a property, offering valuable insights to maximise your success. He begins by emphasizing the importance of presentation and making small improvements to attract buyers and achieve a higher sale price. Stuart discusses the best times to sell, noting that while spring is popular, other seasons might be more advantageous depending on your property's unique features and location.

Choosing the right real estate agent is highlighted as a key factor, with Stuart advising on what to look for in an agent and the benefits of vendor advocates. He then covers the complexities of taxation, explaining how Capital Gains Tax (CGT) can impact your sale and offering strategies to minimize liability. Mortgage management is another critical topic, as Stuart outlines steps to ensure you retain control over the sale proceeds.

Finally, Stuart addresses tenancy agreements, providing guidance on selling tenanted properties and the importance of planning ahead. This episode is packed with practical advice and expert tips to help you navigate the property selling process with confidence and success. Don't miss it!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15532028 Wed, 07 Aug 2024 05:00:00 +1000 2055 316 full false Case Study: Residential & commercial property + super + shares Case Study: Residential & commercial property + super + shares Do you have a question? Email questions@investopoly.com.au and Stuart may answer it in the podcast.

In this case study episode, Stuart explores the impressive journey of a couple who have transformed their net worth from $868k in 2010 to over $5.4m today. Starting with a modest portfolio that included a primary residence, a Tasmanian property, shares, and superannuation, the couple strategically diversified and expanded their investments. Stuart highlights key moves such as acquiring a commercial property for their business, investing in shares, and navigating the challenges of cash flow management while funding private school fees.

Listeners will learn valuable insights from their experiences, such as the impact of quality investments like their double-fronted Victorian home in Northcote, which contributed significantly to their wealth increase. Stuart also discusses the importance of timing and location in property investments, comparing different outcomes from commercial property purchases.

The episode underscores the power of patience and compounding, with Stuart noting that the couple's continued success now hinges on time rather than additional contributions. Key takeaways include the significance of cash flow management, the benefits of forced savings through mortgages, and the value of taking action within one's budget constraints. This episode is packed with practical lessons and inspiration for anyone looking to build and manage a successful investment portfolio.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Do you have a question? Email questions@investopoly.com.au and Stuart may answer it in the podcast.

In this case study episode, Stuart explores the impressive journey of a couple who have transformed their net worth from $868k in 2010 to over $5.4m today. Starting with a modest portfolio that included a primary residence, a Tasmanian property, shares, and superannuation, the couple strategically diversified and expanded their investments. Stuart highlights key moves such as acquiring a commercial property for their business, investing in shares, and navigating the challenges of cash flow management while funding private school fees.

Listeners will learn valuable insights from their experiences, such as the impact of quality investments like their double-fronted Victorian home in Northcote, which contributed significantly to their wealth increase. Stuart also discusses the importance of timing and location in property investments, comparing different outcomes from commercial property purchases.

The episode underscores the power of patience and compounding, with Stuart noting that the couple's continued success now hinges on time rather than additional contributions. Key takeaways include the significance of cash flow management, the benefits of forced savings through mortgages, and the value of taking action within one's budget constraints. This episode is packed with practical lessons and inspiration for anyone looking to build and manage a successful investment portfolio.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15528785 Tue, 06 Aug 2024 05:00:00 +1000 1277 full false EP 315: 2024: The best super fund is… EP 315: 2024: The best super fund is… Do you have a question? Email questions@investopoly.com.au and Stuart may answer it in the podcast.

Read full blog here.

In this episode, Stuart delves into the critical topic of selecting the best super fund for 2024. With many super funds delivering impressive double-digit returns in the past financial year, Stuart highlights the disparity among funds, particularly in terms of transparency and risk. He emphasizes the importance of scrutinizing funds' investments, especially those with unlisted assets, and the potential conflicts of interest tied to industry funds' connections with trade unions and political parties.

Stuart advises on the benefits of choosing super funds with a significant allocation to listed investments for better transparency and reliability. He also discusses the recent legislative changes allowing super funds to provide limited financial advice, noting the potential conflicts of interest.

For those with substantial super balances, Stuart suggests exploring alternatives to industry funds, such as wrap platforms, which offer greater transparency and potentially lower fees. He champions UniSuper as the top industry fund due to its consistent strong returns, low exposure to unlisted assets, and competitive fees.

Tune in to gain insights on maximizing your super returns and making informed decisions about your retirement savings.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Do you have a question? Email questions@investopoly.com.au and Stuart may answer it in the podcast.

Read full blog here.

In this episode, Stuart delves into the critical topic of selecting the best super fund for 2024. With many super funds delivering impressive double-digit returns in the past financial year, Stuart highlights the disparity among funds, particularly in terms of transparency and risk. He emphasizes the importance of scrutinizing funds' investments, especially those with unlisted assets, and the potential conflicts of interest tied to industry funds' connections with trade unions and political parties.

Stuart advises on the benefits of choosing super funds with a significant allocation to listed investments for better transparency and reliability. He also discusses the recent legislative changes allowing super funds to provide limited financial advice, noting the potential conflicts of interest.

For those with substantial super balances, Stuart suggests exploring alternatives to industry funds, such as wrap platforms, which offer greater transparency and potentially lower fees. He champions UniSuper as the top industry fund due to its consistent strong returns, low exposure to unlisted assets, and competitive fees.

Tune in to gain insights on maximizing your super returns and making informed decisions about your retirement savings.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15488959 Wed, 31 Jul 2024 05:00:00 +1000 1355 315 full false Q&A: Answers to interesting listener questions Q&A: Answers to interesting listener questions Do you have a question? Email questions@investopoly.com.au and Stuart may answer it in the podcast.

In this case study episode, Stuart Wemyss shifts from case studies to an interactive Q&A format, addressing several listener inquiries. The episode kicks off with strategies for early retirement, where Stuart discusses balancing investment approaches, living expenses, and aggressive gearing techniques to achieve financial independence in your 40s. He also delves into superannuation contributions and managing the transfer balance cap.

Next, he explores investment structures, focusing on family trusts and corporate beneficiaries. Stuart highlights the tax implications and benefits of these entities, providing practical insights into capital gains tax considerations. An example calculation demonstrates the significant financial impact of working longer versus drawing on superannuation, offering valuable advice for those contemplating their retirement timeline.

Stuart also tackles the challenge of finding holistic financial advice and providing tailored investment recommendations based on current assets and income. He suggests focusing on super contributions over additional property investments for a more balanced financial plan.

Listeners are encouraged to submit their questions for future Q&A episodes, and Stuart announces plans for upcoming webinars and live events to discuss advisor fees and selection criteria further. This interactive episode promises to equip listeners with actionable insights and personalized advice for their financial journeys.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Do you have a question? Email questions@investopoly.com.au and Stuart may answer it in the podcast.

In this case study episode, Stuart Wemyss shifts from case studies to an interactive Q&A format, addressing several listener inquiries. The episode kicks off with strategies for early retirement, where Stuart discusses balancing investment approaches, living expenses, and aggressive gearing techniques to achieve financial independence in your 40s. He also delves into superannuation contributions and managing the transfer balance cap.

Next, he explores investment structures, focusing on family trusts and corporate beneficiaries. Stuart highlights the tax implications and benefits of these entities, providing practical insights into capital gains tax considerations. An example calculation demonstrates the significant financial impact of working longer versus drawing on superannuation, offering valuable advice for those contemplating their retirement timeline.

Stuart also tackles the challenge of finding holistic financial advice and providing tailored investment recommendations based on current assets and income. He suggests focusing on super contributions over additional property investments for a more balanced financial plan.

Listeners are encouraged to submit their questions for future Q&A episodes, and Stuart announces plans for upcoming webinars and live events to discuss advisor fees and selection criteria further. This interactive episode promises to equip listeners with actionable insights and personalized advice for their financial journeys.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15488788 Tue, 30 Jul 2024 05:00:00 +1000 1804 full false EP 314: How much super do you need for retirement? EP 314: How much super do you need for retirement? Do you have a question? Email questions@investopoly.com.au and Stuart may answer it in the podcast.

Read full blog here.

In this episode, Stuart delves into the essential topic of how much superannuation you need for a comfortable retirement. Drawing on a recent discussion with James Kirby from The Australian newspaper, Stuart explores the complexities of retirement planning, including how long your retirement might last and the shortcomings of traditional super calculators. He emphasises the importance of a perpetual portfolio, where your investment returns exceed your living expenses, ensuring your capital remains intact.

Stuart breaks down two key scenarios: relying solely on super and combining super with property investments. He explains how each approach can provide financial security and highlights the critical factors to consider, such as initial investment base and asset allocation. With practical advice and real-world examples, Stuart offers listeners a comprehensive guide to planning for a financially secure retirement, helping you decide whether a perpetual portfolio or a mix of super and property is right for you. Tune in to learn how to achieve a sustainable retirement plan that safeguards against longevity risk and ensures peace of mind for the future.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Do you have a question? Email questions@investopoly.com.au and Stuart may answer it in the podcast.

Read full blog here.

In this episode, Stuart delves into the essential topic of how much superannuation you need for a comfortable retirement. Drawing on a recent discussion with James Kirby from The Australian newspaper, Stuart explores the complexities of retirement planning, including how long your retirement might last and the shortcomings of traditional super calculators. He emphasises the importance of a perpetual portfolio, where your investment returns exceed your living expenses, ensuring your capital remains intact.

Stuart breaks down two key scenarios: relying solely on super and combining super with property investments. He explains how each approach can provide financial security and highlights the critical factors to consider, such as initial investment base and asset allocation. With practical advice and real-world examples, Stuart offers listeners a comprehensive guide to planning for a financially secure retirement, helping you decide whether a perpetual portfolio or a mix of super and property is right for you. Tune in to learn how to achieve a sustainable retirement plan that safeguards against longevity risk and ensures peace of mind for the future.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15433684 Wed, 24 Jul 2024 05:00:00 +1000 1698 314 full false Case Study: Property, then shares and now lifestyle Case Study: Property, then shares and now lifestyle Do you have a question? Email questions@investopoly.com.au and Stuart may answer it in the podcast.

In this case study episode, Stuart takes us through the financial journey of a high-income client who started with mortgage advice in 2007 and expanded to holistic financial advice in 2014. The client's initial assets included a primary residence worth $1.2 million. Significant property investments followed, including a $3.8 million Camberwell property and several other strategic acquisitions.

In 2016, the client began share investing, contributing $10,000 per month, which has grown substantially. By 2022, the client diversified into a lifestyle asset with a $2.4 million holiday home in Lorne. Now, with a net worth exceeding $15 million, including their home, the client is embarking on a major renovation of their primary residence.

Key insights include the importance of gearing early to leverage future growth, strategic investing to control cash flow, and the financial freedom to invest in lifestyle assets. 

This episode offers valuable lessons on reducing debt, building wealth, and achieving financial security.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Do you have a question? Email questions@investopoly.com.au and Stuart may answer it in the podcast.

In this case study episode, Stuart takes us through the financial journey of a high-income client who started with mortgage advice in 2007 and expanded to holistic financial advice in 2014. The client's initial assets included a primary residence worth $1.2 million. Significant property investments followed, including a $3.8 million Camberwell property and several other strategic acquisitions.

In 2016, the client began share investing, contributing $10,000 per month, which has grown substantially. By 2022, the client diversified into a lifestyle asset with a $2.4 million holiday home in Lorne. Now, with a net worth exceeding $15 million, including their home, the client is embarking on a major renovation of their primary residence.

Key insights include the importance of gearing early to leverage future growth, strategic investing to control cash flow, and the financial freedom to invest in lifestyle assets. 

This episode offers valuable lessons on reducing debt, building wealth, and achieving financial security.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15439212 Tue, 23 Jul 2024 05:00:00 +1000 1019 full false EP 313: 4 alternative rules-based share index strategies EP 313: 4 alternative rules-based share index strategies Do you have a question? Email questions@investopoly.com.au and Stuart may answer it in the podcast.

Read full blog here.

In this episode, Stuart dives into the world of share investing by exploring four alternative rules-based indexing strategies beyond the traditional market cap approach. He starts with a brief history of market cap indexing and highlights its major shortcomings, such as overexposure to overvalued stocks and rebalancing inefficiencies. Stuart then introduces four compelling alternatives:

1. Equal Weight Indexing: This strategy allocates an equal amount to each company in an index, reducing the dominance of large-cap stocks and providing balanced exposure across all company sizes.
   
2. Dimensional Indexing: Backed by rigorous academic research, this approach adjusts conventional indices based on factors like value, size, and profitability, aiming for higher long-term returns.
   
3. Quality Factor Indexing: This method selects stocks based on objective quality metrics, offering a defensive strategy against economic downturns by focusing on profitable, low-debt companies.
   
4. Value Indexing: By investing in attractively priced stocks, this strategy aims to capitalize on undervaluation for above-average future returns.

Stuart also discusses the importance of considering factors such as liquidity, fees, and diversification before investing in any ETF. Whether you have a small or large portfolio, this episode provides invaluable insights to help you navigate the complex world of share investing.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Do you have a question? Email questions@investopoly.com.au and Stuart may answer it in the podcast.

Read full blog here.

In this episode, Stuart dives into the world of share investing by exploring four alternative rules-based indexing strategies beyond the traditional market cap approach. He starts with a brief history of market cap indexing and highlights its major shortcomings, such as overexposure to overvalued stocks and rebalancing inefficiencies. Stuart then introduces four compelling alternatives:

1. Equal Weight Indexing: This strategy allocates an equal amount to each company in an index, reducing the dominance of large-cap stocks and providing balanced exposure across all company sizes.
   
2. Dimensional Indexing: Backed by rigorous academic research, this approach adjusts conventional indices based on factors like value, size, and profitability, aiming for higher long-term returns.
   
3. Quality Factor Indexing: This method selects stocks based on objective quality metrics, offering a defensive strategy against economic downturns by focusing on profitable, low-debt companies.
   
4. Value Indexing: By investing in attractively priced stocks, this strategy aims to capitalize on undervaluation for above-average future returns.

Stuart also discusses the importance of considering factors such as liquidity, fees, and diversification before investing in any ETF. Whether you have a small or large portfolio, this episode provides invaluable insights to help you navigate the complex world of share investing.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15397432 Wed, 17 Jul 2024 05:00:00 +1000 1971 313 full false Case Study: Quality is king Case Study: Quality is king In this case study episode, Stuart delves into the transformative journey of a couple who embraced the principle that quality trumps quantity in property investment. Beginning their journey in 2015 with a net worth of $1.35 million, their portfolio included several underperforming properties. Through strategic advice, they sold these assets and reinvested in higher-quality properties, significantly boosting their financial position. Key moves included purchasing a property in South Yarra and a home in Haberfield with an investment lens, which later sold for impressive gains.

Fast forward to 2024, their net worth has almost tripled to nearly $4.1 million. Stuart highlights crucial insights: the importance of replacing underperforming assets with high-quality ones, the power of focusing on fewer, superior properties, and the flexibility to pivot investment strategies based on changing financial circumstances. Additionally, he underscores the value of investing in one's home as a potent strategy for wealth building.

This episode is packed with practical lessons on how prioritising quality and adaptability can lead to substantial financial growth, making it a must-listen for anyone looking to optimise their property investment strategy.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this case study episode, Stuart delves into the transformative journey of a couple who embraced the principle that quality trumps quantity in property investment. Beginning their journey in 2015 with a net worth of $1.35 million, their portfolio included several underperforming properties. Through strategic advice, they sold these assets and reinvested in higher-quality properties, significantly boosting their financial position. Key moves included purchasing a property in South Yarra and a home in Haberfield with an investment lens, which later sold for impressive gains.

Fast forward to 2024, their net worth has almost tripled to nearly $4.1 million. Stuart highlights crucial insights: the importance of replacing underperforming assets with high-quality ones, the power of focusing on fewer, superior properties, and the flexibility to pivot investment strategies based on changing financial circumstances. Additionally, he underscores the value of investing in one's home as a potent strategy for wealth building.

This episode is packed with practical lessons on how prioritising quality and adaptability can lead to substantial financial growth, making it a must-listen for anyone looking to optimise their property investment strategy.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15402727 Tue, 16 Jul 2024 05:00:00 +1000 690 full false Ep 312: Warning: Impact of cost-of-living ‘crisis’ on your retirement Ep 312: Warning: Impact of cost-of-living ‘crisis’ on your retirement Do you have a question? Email questions@investopoly.com.au and Stuart may answer it in the podcast.

Read full blog here.

In this episode, Stuart Wemyss delves into the significant impact of the current cost-of-living crisis on retirement planning. Stuart highlights how the sharp rise in everyday expenses over the past four years, often outpacing general inflation, can hinder your ability to save for retirement. He explains that maintaining your standard of living now requires a larger wealth base, potentially delaying retirement plans. 

Stuart provides actionable advice on managing this crisis, including the importance of making spending visible to better control cash flow and the potential benefits of taking on more investment risk through growth assets and leveraging. He emphasises the necessity of small sacrifices now to avoid larger compromises in retirement. 

Drawing on real-life examples and expert insights, Stuart outlines strategies to combat rising costs, such as diversifying investments, particularly focusing on shares and property, and the importance of geographical diversification. He also discusses the value of ongoing, independent advice to navigate conflicting strategies and maximise investment returns. 

Tune in to learn how to effectively adjust your financial planning to ensure a secure and comfortable retirement despite the challenges posed by the cost-of-living crisis. 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Do you have a question? Email questions@investopoly.com.au and Stuart may answer it in the podcast.

Read full blog here.

In this episode, Stuart Wemyss delves into the significant impact of the current cost-of-living crisis on retirement planning. Stuart highlights how the sharp rise in everyday expenses over the past four years, often outpacing general inflation, can hinder your ability to save for retirement. He explains that maintaining your standard of living now requires a larger wealth base, potentially delaying retirement plans. 

Stuart provides actionable advice on managing this crisis, including the importance of making spending visible to better control cash flow and the potential benefits of taking on more investment risk through growth assets and leveraging. He emphasises the necessity of small sacrifices now to avoid larger compromises in retirement. 

Drawing on real-life examples and expert insights, Stuart outlines strategies to combat rising costs, such as diversifying investments, particularly focusing on shares and property, and the importance of geographical diversification. He also discusses the value of ongoing, independent advice to navigate conflicting strategies and maximise investment returns. 

Tune in to learn how to effectively adjust your financial planning to ensure a secure and comfortable retirement despite the challenges posed by the cost-of-living crisis. 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15365042 Wed, 10 Jul 2024 05:00:00 +1000 1164 312 full false Case Study: Property in super, shares and the need for diversification Case Study: Property in super, shares and the need for diversification In this case study episode, Stuart Wemyss explores the journey of a client who has successfully navigated property investment within their superannuation, shares, and the importance of diversification. Working with the client since 2009, Stuart details their progression from an initial $4.8 million in assets to an impressive $9 million. The episode highlights the client's strategic acquisition of five apartments in Sydney and Melbourne, achieving significant long-term growth rates of 6.3% and 7.1% per annum, respectively.

Stuart delves into the client's approach, which included geographical diversification and the strategic allocation of funds into shares within their superannuation. He also shares valuable insights on cash flow management and the impact of providing financial assistance to their children. However, Stuart also discusses areas where the client could have improved, such as considering different property types and the value of ongoing, independent advice.

Listeners will gain a comprehensive understanding of the client's successes and the lessons learned from their investment journey. Stuart's expert analysis provides actionable takeaways for anyone looking to diversify their investment portfolio and maximise returns. 

Tune in to discover how a well-rounded investment strategy can lead to substantial wealth growth and financial security.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this case study episode, Stuart Wemyss explores the journey of a client who has successfully navigated property investment within their superannuation, shares, and the importance of diversification. Working with the client since 2009, Stuart details their progression from an initial $4.8 million in assets to an impressive $9 million. The episode highlights the client's strategic acquisition of five apartments in Sydney and Melbourne, achieving significant long-term growth rates of 6.3% and 7.1% per annum, respectively.

Stuart delves into the client's approach, which included geographical diversification and the strategic allocation of funds into shares within their superannuation. He also shares valuable insights on cash flow management and the impact of providing financial assistance to their children. However, Stuart also discusses areas where the client could have improved, such as considering different property types and the value of ongoing, independent advice.

Listeners will gain a comprehensive understanding of the client's successes and the lessons learned from their investment journey. Stuart's expert analysis provides actionable takeaways for anyone looking to diversify their investment portfolio and maximise returns. 

Tune in to discover how a well-rounded investment strategy can lead to substantial wealth growth and financial security.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15365046 Tue, 09 Jul 2024 05:00:00 +1000 842 full false Ep 311: 6 reasons to not invest in property! Ep 311: 6 reasons to not invest in property! Do you have a question? Email questions@investopoly.com.au and Stuart will answer in the podcast from next week onwards.

Read full blog here.

In this episode, Stuart delves into the often-overlooked downsides of property investing. While the benefits are frequently highlighted, it's crucial to recognise and mitigate the potential drawbacks. Stuart outlines six key reasons why property might not be the best investment choice for everyone. He explains how compounding returns require decades to materialise fully, making property a long-term commitment. He also discusses the hands-on nature of property management, the typically low and unreliable rental income, and the illiquidity of property compared to other assets like shares. 

Additionally, property investments are susceptible to legislative and tax changes, posing significant risks. Stuart emphasises the substantial financial commitment involved in buying investment-grade property and the importance of being prepared for this commitment. Throughout the episode, Stuart provides practical mitigants for each downside, such as diversifying investments and ensuring a solid financial plan. 

By the end of the episode, listeners will gain a balanced perspective on property investing, understanding both the potential rewards and the inherent risks. Stuart's insights aim to equip investors with the knowledge to make informed decisions and build a resilient, diversified investment portfolio. 

Tune in to learn more about the complexities of property investment and how to navigate them effectively.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Do you have a question? Email questions@investopoly.com.au and Stuart will answer in the podcast from next week onwards.

Read full blog here.

In this episode, Stuart delves into the often-overlooked downsides of property investing. While the benefits are frequently highlighted, it's crucial to recognise and mitigate the potential drawbacks. Stuart outlines six key reasons why property might not be the best investment choice for everyone. He explains how compounding returns require decades to materialise fully, making property a long-term commitment. He also discusses the hands-on nature of property management, the typically low and unreliable rental income, and the illiquidity of property compared to other assets like shares. 

Additionally, property investments are susceptible to legislative and tax changes, posing significant risks. Stuart emphasises the substantial financial commitment involved in buying investment-grade property and the importance of being prepared for this commitment. Throughout the episode, Stuart provides practical mitigants for each downside, such as diversifying investments and ensuring a solid financial plan. 

By the end of the episode, listeners will gain a balanced perspective on property investing, understanding both the potential rewards and the inherent risks. Stuart's insights aim to equip investors with the knowledge to make informed decisions and build a resilient, diversified investment portfolio. 

Tune in to learn more about the complexities of property investment and how to navigate them effectively.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15346818 Wed, 03 Jul 2024 05:00:00 +1000 1029 311 full false Case Study: Anti property investor Case Study: Anti property investor In this case study episode, Stuart delves into the impressive financial journey of a client who staunchly avoids property investment. Starting in 2016 with $760k in shares and $595k in debt, the client had a combined super of $324k and no home loan on a $2.5m residence. With an income of $440k and living expenses of $96k, his net investment assets stood at $490k. Fast forward to today, his shares have grown to $2.15m with a $725k loan and super has increased to $1.07m. Additionally, he acquired a $1.7m holiday house with a $1m debt. Despite receiving a $400k inheritance in 2016, his net investment assets have tripled to $3.2m.

Key insights from this journey include the benefits of strategic gearing, disciplined tracking of wealth and performance, and effective cash flow management. The client’s portfolio, focused on growth with a mix of direct stocks and ETFs, benefitted from timely investments in Macquarie and US markets (VTS). A lifestyle-driven decision to purchase a coastal property through a buyer’s agent in 2020 has also paid off, appreciating from $1.4m to $1.7m. Stuart highlights how these strategies and decisions have collectively contributed to a threefold increase in net assets.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this case study episode, Stuart delves into the impressive financial journey of a client who staunchly avoids property investment. Starting in 2016 with $760k in shares and $595k in debt, the client had a combined super of $324k and no home loan on a $2.5m residence. With an income of $440k and living expenses of $96k, his net investment assets stood at $490k. Fast forward to today, his shares have grown to $2.15m with a $725k loan and super has increased to $1.07m. Additionally, he acquired a $1.7m holiday house with a $1m debt. Despite receiving a $400k inheritance in 2016, his net investment assets have tripled to $3.2m.

Key insights from this journey include the benefits of strategic gearing, disciplined tracking of wealth and performance, and effective cash flow management. The client’s portfolio, focused on growth with a mix of direct stocks and ETFs, benefitted from timely investments in Macquarie and US markets (VTS). A lifestyle-driven decision to purchase a coastal property through a buyer’s agent in 2020 has also paid off, appreciating from $1.4m to $1.7m. Stuart highlights how these strategies and decisions have collectively contributed to a threefold increase in net assets.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15344591 Tue, 02 Jul 2024 07:00:00 +1000 630 full false Ep 310: Should you invest 100% of your super into shares? Ep 310: Should you invest 100% of your super into shares? Read full blog here.

In this episode, Stuart delves into the intriguing question: should you invest 100% of your super in shares? He explores the conventional wisdom of diversified asset allocation, highlighting the potential benefits of focusing entirely on shares given the long-term nature of superannuation. Stuart explains how pre-mixed investment options and lifecycle strategies manage your super, often diluting potential returns. 

He argues that volatility isn't a concern for long-term investors, and shares historically deliver higher returns over decades. Stuart also addresses potential risks, such as market concentration, and advises on using rules-based, low-cost index strategies to mitigate these. He cautions that an all-in shares approach might not suit everyone, especially nervous investors or those nearing retirement.

Additionally, Stuart discusses the role of listed property and the considerations for using geared ETFs within super. He challenges conventional financial advice, advocating for a more aggressive investment strategy for those with a long horizon and suitable risk tolerance.

Tune in to hear Stuart's insights on maximising your super's growth and whether a 100% shares investment strategy could be right for you.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In this episode, Stuart delves into the intriguing question: should you invest 100% of your super in shares? He explores the conventional wisdom of diversified asset allocation, highlighting the potential benefits of focusing entirely on shares given the long-term nature of superannuation. Stuart explains how pre-mixed investment options and lifecycle strategies manage your super, often diluting potential returns. 

He argues that volatility isn't a concern for long-term investors, and shares historically deliver higher returns over decades. Stuart also addresses potential risks, such as market concentration, and advises on using rules-based, low-cost index strategies to mitigate these. He cautions that an all-in shares approach might not suit everyone, especially nervous investors or those nearing retirement.

Additionally, Stuart discusses the role of listed property and the considerations for using geared ETFs within super. He challenges conventional financial advice, advocating for a more aggressive investment strategy for those with a long horizon and suitable risk tolerance.

Tune in to hear Stuart's insights on maximising your super's growth and whether a 100% shares investment strategy could be right for you.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15311050 Wed, 26 Jun 2024 05:00:00 +1000 1127 310 full false Case Study: Successful long term property investor Case Study: Successful long term property investor In this case study episode, Stuart shares the long-term success story of a client he has worked with for over two decades. Starting with mortgage broking 20 years ago, this client has built an impressive investment property portfolio worth $23.5 million. The key to their success? Patience and strategic property selection. With an average holding period of 25 years, this client has seen properties grow at an average annual rate of 6.8%, resulting in substantial wealth accumulation.

Stuart highlights the importance of investing in blue-chip suburbs and unique properties with high demand, while also noting the impact of geographical diversification and thoughtful ownership structures. Despite some properties performing better than others, the overall portfolio has consistently delivered strong returns. Stuart emphasises that the next 30 years may require even more careful selection due to changing borrowing capacities and market conditions.

Listeners will gain valuable insights into the benefits of long-term property investment, the significance of location and uniqueness, and the need for a strategic approach. This episode is a testament to the power of patience, careful planning, and the right investment decisions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this case study episode, Stuart shares the long-term success story of a client he has worked with for over two decades. Starting with mortgage broking 20 years ago, this client has built an impressive investment property portfolio worth $23.5 million. The key to their success? Patience and strategic property selection. With an average holding period of 25 years, this client has seen properties grow at an average annual rate of 6.8%, resulting in substantial wealth accumulation.

Stuart highlights the importance of investing in blue-chip suburbs and unique properties with high demand, while also noting the impact of geographical diversification and thoughtful ownership structures. Despite some properties performing better than others, the overall portfolio has consistently delivered strong returns. Stuart emphasises that the next 30 years may require even more careful selection due to changing borrowing capacities and market conditions.

Listeners will gain valuable insights into the benefits of long-term property investment, the significance of location and uniqueness, and the need for a strategic approach. This episode is a testament to the power of patience, careful planning, and the right investment decisions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15300651 Tue, 25 Jun 2024 05:00:00 +1000 771 full false Ep 309: Investment property holdings costs have skyrocketed. Is it still worthwhile? Ep 309: Investment property holdings costs have skyrocketed. Is it still worthwhile? Read full blog here.

In this episode, Stuart explores the soaring costs of holding investment properties and whether they still make financial sense. Over the past four years, significant hikes in expenses like insurance, council rates, and maintenance, coupled with a cash rate increase from 0.10% to 4.35%, have challenged property investors. Despite anticipated rental income growth, the discussion reveals that higher holding costs demand properties to achieve even greater capital growth to maintain desired returns.

Stuart delves into long-term investing assumptions, noting the historical and current trends in expenses and interest rates. The analysis shows that while property returns are sensitive to interest rates, they are less so to holding costs. Stuart emphasises the importance of selecting properties with strong potential for long-term capital growth and provides practical tips for managing expenses. 

Tune in for insightful strategies to navigate the current property investment landscape and maximise your returns. Don't miss out on the detailed analysis and expert advice in this episode. 

Listen now: [Is It Still Worthwhile to Invest in Property?](https://www.buzzsprout.com/2005600/12521153).

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In this episode, Stuart explores the soaring costs of holding investment properties and whether they still make financial sense. Over the past four years, significant hikes in expenses like insurance, council rates, and maintenance, coupled with a cash rate increase from 0.10% to 4.35%, have challenged property investors. Despite anticipated rental income growth, the discussion reveals that higher holding costs demand properties to achieve even greater capital growth to maintain desired returns.

Stuart delves into long-term investing assumptions, noting the historical and current trends in expenses and interest rates. The analysis shows that while property returns are sensitive to interest rates, they are less so to holding costs. Stuart emphasises the importance of selecting properties with strong potential for long-term capital growth and provides practical tips for managing expenses. 

Tune in for insightful strategies to navigate the current property investment landscape and maximise your returns. Don't miss out on the detailed analysis and expert advice in this episode. 

Listen now: [Is It Still Worthwhile to Invest in Property?](https://www.buzzsprout.com/2005600/12521153).

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15266019 Wed, 19 Jun 2024 05:00:00 +1000 916 309 full false Case Study: The road to early retirement Case Study: The road to early retirement In this case study episode, Stuart explores the remarkable journey of a couple on the road to early retirement. When they began working together in 2015, the couple had a net worth of $420k. Fast forward to today, their net worth has soared to $2.5m, driven by strategic property decisions and smart investment moves. They purchased their first investment-grade apartment in 2016 for $488k, followed by a house in Brisbane in 2019 for $885k, which is now worth $1.4m. They also upgraded their home in 2022 and have accumulated $220k in shares through diverse ETFs.

The couple's family income has seen a substantial increase from $270k in 2017 to $570k today. With this growing income, they have balanced improving their lifestyle and making prudent long-term investments. Stuart highlights their unique approach of being very hands-on with tracking their wealth and cash flow while also diligently following professional advice.

The next phase of their strategy involves investing in shares to build what Stuart calls a "third super fund," aiming to retire within the next decade. This episode offers valuable insights into achieving financial independence through disciplined planning and investment.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this case study episode, Stuart explores the remarkable journey of a couple on the road to early retirement. When they began working together in 2015, the couple had a net worth of $420k. Fast forward to today, their net worth has soared to $2.5m, driven by strategic property decisions and smart investment moves. They purchased their first investment-grade apartment in 2016 for $488k, followed by a house in Brisbane in 2019 for $885k, which is now worth $1.4m. They also upgraded their home in 2022 and have accumulated $220k in shares through diverse ETFs.

The couple's family income has seen a substantial increase from $270k in 2017 to $570k today. With this growing income, they have balanced improving their lifestyle and making prudent long-term investments. Stuart highlights their unique approach of being very hands-on with tracking their wealth and cash flow while also diligently following professional advice.

The next phase of their strategy involves investing in shares to build what Stuart calls a "third super fund," aiming to retire within the next decade. This episode offers valuable insights into achieving financial independence through disciplined planning and investment.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15258993 Tue, 18 Jun 2024 05:00:00 +1000 575 full false Ep 308: Warning: Does one spouse deal with all financial matters? Ep 308: Warning: Does one spouse deal with all financial matters? Read full blog here.

In this episode, Stuart issues a crucial warning to couples: don't let one spouse handle all the financial matters. While it's natural for one partner to take the lead, it's vital for both to stay involved and informed. Stuart highlights the importance of understanding and communicating about financial documents, ensuring both partners know what they’re signing. He stresses the need for both spouses to be prepared for any eventuality, from navigating financial decisions in the event of a loss to handling a relationship breakdown.

Listeners will learn practical tips to engage their spouse in financial discussions, such as scheduling regular financial check-ins and simplifying complex topics. Stuart also advises on the importance of having a comprehensive spreadsheet of assets and liabilities, and how to prepare a letter of wishes for guidance. 

With insights into maintaining financial independence and the potential pitfalls of relying solely on one partner, this episode is a must-listen for anyone seeking to safeguard their financial future and ensure both partners are equally empowered and prepared. Tune in to understand why protecting yourself financially is a shared responsibility, not one to be delegated entirely to your spouse.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In this episode, Stuart issues a crucial warning to couples: don't let one spouse handle all the financial matters. While it's natural for one partner to take the lead, it's vital for both to stay involved and informed. Stuart highlights the importance of understanding and communicating about financial documents, ensuring both partners know what they’re signing. He stresses the need for both spouses to be prepared for any eventuality, from navigating financial decisions in the event of a loss to handling a relationship breakdown.

Listeners will learn practical tips to engage their spouse in financial discussions, such as scheduling regular financial check-ins and simplifying complex topics. Stuart also advises on the importance of having a comprehensive spreadsheet of assets and liabilities, and how to prepare a letter of wishes for guidance. 

With insights into maintaining financial independence and the potential pitfalls of relying solely on one partner, this episode is a must-listen for anyone seeking to safeguard their financial future and ensure both partners are equally empowered and prepared. Tune in to understand why protecting yourself financially is a shared responsibility, not one to be delegated entirely to your spouse.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15217299 Wed, 12 Jun 2024 05:00:00 +1000 669 308 full false Case Study: Financial freedom through property and super: a 15-year success story Case Study: Financial freedom through property and super: a 15-year success story In this case study episode, Stuart and Frencham unveil a compelling 15-year journey towards financial freedom through property and superannuation. Beginning with a modest net worth of $2.4 million in 2008, their client's portfolio has surged to nearly $10 million today. Through strategic property investments, including homes in desirable locations like Hawthorn and Toorak, and optimising superannuation investments, they've achieved remarkable growth.

Key insights reveal the importance of aligning property investments with long-term goals and having a clear strategy for homeownership without debt. The success story underscores the pivotal role of superannuation in wealth accumulation and the value of professional guidance throughout the journey.

Tune in to discover how prudent property investments and smart superannuation strategies can pave the way to financial independence and long-term prosperity.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this case study episode, Stuart and Frencham unveil a compelling 15-year journey towards financial freedom through property and superannuation. Beginning with a modest net worth of $2.4 million in 2008, their client's portfolio has surged to nearly $10 million today. Through strategic property investments, including homes in desirable locations like Hawthorn and Toorak, and optimising superannuation investments, they've achieved remarkable growth.

Key insights reveal the importance of aligning property investments with long-term goals and having a clear strategy for homeownership without debt. The success story underscores the pivotal role of superannuation in wealth accumulation and the value of professional guidance throughout the journey.

Tune in to discover how prudent property investments and smart superannuation strategies can pave the way to financial independence and long-term prosperity.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15217364 Tue, 11 Jun 2024 05:00:00 +1000 633 full false Ep 307: How do you know if you’ve been too risk adverse? Ep 307: How do you know if you’ve been too risk adverse? Read full blog here.

In this episode, Stuart explores the often-overlooked dangers of being too risk-averse in financial planning. He argues that an excessive focus on reducing perceived financial risk can jeopardise your lifestyle goals due to the high opportunity costs involved. Many people fall into the trap of continuously repaying debt at the expense of exploring other investment opportunities, resulting in a limited risk tolerance that may not serve them well in the long run.

Stuart emphasises the importance of becoming comfortable with perceived risk and adopting a long-term investment strategy. He explains that most people share a similar risk profile, seeking average returns over time rather than chasing high-risk, high-reward scenarios. He focuses on evidence-based and rules-based investing and illustrates how market volatility is less concerning when viewed over extended periods.

Education is highlighted as the key to reducing perceived risk. Investors can make informed decisions without fear by understanding basic investment principles and seeking professional advice. Stuart also suggests starting small to build confidence and familiarity with investments.

Listeners will gain valuable insights into balancing risk and reward, and how taking calculated risks is essential for achieving financial and lifestyle goals. Tune in to learn if you're taking enough risk in your financial strategy.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In this episode, Stuart explores the often-overlooked dangers of being too risk-averse in financial planning. He argues that an excessive focus on reducing perceived financial risk can jeopardise your lifestyle goals due to the high opportunity costs involved. Many people fall into the trap of continuously repaying debt at the expense of exploring other investment opportunities, resulting in a limited risk tolerance that may not serve them well in the long run.

Stuart emphasises the importance of becoming comfortable with perceived risk and adopting a long-term investment strategy. He explains that most people share a similar risk profile, seeking average returns over time rather than chasing high-risk, high-reward scenarios. He focuses on evidence-based and rules-based investing and illustrates how market volatility is less concerning when viewed over extended periods.

Education is highlighted as the key to reducing perceived risk. Investors can make informed decisions without fear by understanding basic investment principles and seeking professional advice. Stuart also suggests starting small to build confidence and familiarity with investments.

Listeners will gain valuable insights into balancing risk and reward, and how taking calculated risks is essential for achieving financial and lifestyle goals. Tune in to learn if you're taking enough risk in your financial strategy.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Buzzsprout-15187822 Wed, 05 Jun 2024 05:00:00 +1000 869 307 full false Case Study: What to do with employee shares Case Study: What to do with employee shares In this case study episode, Stuart delves into the financial journey of a client he began working with in 2012. Back then, the client had $800k in net investment assets, including shares primarily in Rio Tinto, superannuation, and a property in Hawthorn East. Today, that figure has grown to almost $2.8 million.

Despite challenges, such as underperforming investment properties and a shift to consulting work post-2017, strategic decisions have led to significant growth. A key move was gradually selling down Rio shares, especially after their value peaked at over $130, and redirecting the proceeds into superannuation.

Listeners will gain valuable insights into the importance of not having your wealth tied to the same industry as your income and the critical role of superannuation performance. The episode highlights the balance between holding and selling investment properties and underscores a gradual strategy to increase the proportion of wealth in superannuation.

This case study exemplifies how careful planning and strategic asset management can lead to substantial financial growth, even when faced with market fluctuations and changes in employment. Tune in to learn more about achieving financial stability and growth through diversified investments and proactive superannuation contributions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this case study episode, Stuart delves into the financial journey of a client he began working with in 2012. Back then, the client had $800k in net investment assets, including shares primarily in Rio Tinto, superannuation, and a property in Hawthorn East. Today, that figure has grown to almost $2.8 million.

Despite challenges, such as underperforming investment properties and a shift to consulting work post-2017, strategic decisions have led to significant growth. A key move was gradually selling down Rio shares, especially after their value peaked at over $130, and redirecting the proceeds into superannuation.

Listeners will gain valuable insights into the importance of not having your wealth tied to the same industry as your income and the critical role of superannuation performance. The episode highlights the balance between holding and selling investment properties and underscores a gradual strategy to increase the proportion of wealth in superannuation.

This case study exemplifies how careful planning and strategic asset management can lead to substantial financial growth, even when faced with market fluctuations and changes in employment. Tune in to learn more about achieving financial stability and growth through diversified investments and proactive superannuation contributions.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15187673 Tue, 04 Jun 2024 05:00:00 +1000 560 full false Ep 306: Should you buy an investment-grade apartment or a house in a secondary location? Ep 306: Should you buy an investment-grade apartment or a house in a secondary location? Read full blog here.

In this episode, Stuart tackles a common investment dilemma: should you buy an investment-grade apartment in a blue-chip location or a house in a secondary area? He delves into the key factors influencing your decision, such as land value, potential for capital growth, and maintenance costs. Stuart explains why houses typically offer higher returns due to their land value but also highlights the hidden potential in older apartments with significant land components. He examines the middle ground with villa units and discusses the impact of your budget on the best investment choice. Additionally, Stuart explores market cycles, the importance of location quality, and future growth prospects. Whether you're eyeing a city apartment or a suburban house, this episode provides crucial insights to help you make an informed investment decision. Tune in to understand which property type aligns best with your financial goals and market conditions. 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In this episode, Stuart tackles a common investment dilemma: should you buy an investment-grade apartment in a blue-chip location or a house in a secondary area? He delves into the key factors influencing your decision, such as land value, potential for capital growth, and maintenance costs. Stuart explains why houses typically offer higher returns due to their land value but also highlights the hidden potential in older apartments with significant land components. He examines the middle ground with villa units and discusses the impact of your budget on the best investment choice. Additionally, Stuart explores market cycles, the importance of location quality, and future growth prospects. Whether you're eyeing a city apartment or a suburban house, this episode provides crucial insights to help you make an informed investment decision. Tune in to understand which property type aligns best with your financial goals and market conditions. 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15152095 Wed, 29 May 2024 05:00:00 +1000 1139 306 full false Case Study: Beginning building wealth later in life   Case Study: Beginning building wealth later in life   In this case study episode, Stuart delves into the financial journey of a couple who began building wealth later in life. Starting in 2009, they purchased an entry-level apartment in South Yarra for $390k. Fast forward to 2015, Stuart joined them, and their wealth-building strategy took a serious turn. By 2016, they acquired an investment property in Richmond for $1.3m and restructured their superannuation, moving one spouse from a subpar fund to a wrap account while the other stayed with a solid industry fund. 

Over the past nine years, their focus on maximising cash in offset accounts and making substantial super contributions has paid off, growing their superannuation from $770k in 2015 to over $2.3m today. Key insights include the benefits of starting investments earlier, the importance of asset quality, and the power of diversification. Stuart highlights that reaching a critical mass in super allows returns to significantly boost wealth, setting the stage for a comfortable retirement. This episode is a compelling listen for anyone looking to understand the impact of strategic financial decisions made later in life.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this case study episode, Stuart delves into the financial journey of a couple who began building wealth later in life. Starting in 2009, they purchased an entry-level apartment in South Yarra for $390k. Fast forward to 2015, Stuart joined them, and their wealth-building strategy took a serious turn. By 2016, they acquired an investment property in Richmond for $1.3m and restructured their superannuation, moving one spouse from a subpar fund to a wrap account while the other stayed with a solid industry fund. 

Over the past nine years, their focus on maximising cash in offset accounts and making substantial super contributions has paid off, growing their superannuation from $770k in 2015 to over $2.3m today. Key insights include the benefits of starting investments earlier, the importance of asset quality, and the power of diversification. Stuart highlights that reaching a critical mass in super allows returns to significantly boost wealth, setting the stage for a comfortable retirement. This episode is a compelling listen for anyone looking to understand the impact of strategic financial decisions made later in life.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15146051 Tue, 28 May 2024 05:00:00 +1000 589 full false Ep 305: End of financial year tax planning tips for 2023/24 Ep 305: End of financial year tax planning tips for 2023/24 Read full blog here.

In this episode, Stuart provides a comprehensive guide to end-of-financial-year tax planning strategies that can help maximise your tax savings. With a wealth of practical tips and considerations, he breaks down complex tax concepts into easily digestible insights.

Whether you're a high-income earner, a business owner, or simply looking to optimise your tax position, Stuart's advice covers a range of scenarios and opportunities. From maximising super contributions and utilising unused caps to navigating tax brackets and deductions, he offers actionable steps to potentially save thousands in tax liabilities.

Stuart's holistic approach also explores strategies for spouses, trusts, and businesses, ensuring no stone is left unturned in the quest for tax efficiency. His clear explanations demystify the intricacies of tax planning, empowering listeners to make informed decisions.

With the end of the financial year rapidly approaching, this episode is a must-listen for anyone seeking to minimise their tax burden while staying compliant. Tune in to gain valuable knowledge and unlock potential savings that could significantly impact your overall financial well-being.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In this episode, Stuart provides a comprehensive guide to end-of-financial-year tax planning strategies that can help maximise your tax savings. With a wealth of practical tips and considerations, he breaks down complex tax concepts into easily digestible insights.

Whether you're a high-income earner, a business owner, or simply looking to optimise your tax position, Stuart's advice covers a range of scenarios and opportunities. From maximising super contributions and utilising unused caps to navigating tax brackets and deductions, he offers actionable steps to potentially save thousands in tax liabilities.

Stuart's holistic approach also explores strategies for spouses, trusts, and businesses, ensuring no stone is left unturned in the quest for tax efficiency. His clear explanations demystify the intricacies of tax planning, empowering listeners to make informed decisions.

With the end of the financial year rapidly approaching, this episode is a must-listen for anyone seeking to minimise their tax burden while staying compliant. Tune in to gain valuable knowledge and unlock potential savings that could significantly impact your overall financial well-being.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15105927 Wed, 22 May 2024 05:00:00 +1000 1048 full false Case Study: Property investors: know when to diversify Case Study: Property investors: know when to diversify In this case study episode, Stuart shares an insightful journey with long-term property investor clients. He highlights key lessons learned about the importance of diversification and adapting strategies over time. 

Despite diligently managing cash flow and contributions, the clients' concentrated property portfolio delivered underwhelming returns initially. However, Stuart reveals how diversifying into other asset classes and taking an evidence-based approach ultimately put them on track for a comfortable retirement.

Along the way, he provides valuable insights on pitfalls to avoid when investing in property, recognising when professional advice is warranted, and the merits of strategic portfolio diversification. Stuart will leave listeners with a better understanding of the nuances involved in building a resilient investment portfolio over the long haul.

Whether you're a property investor or just starting out, this episode offers a relatable and thought-provoking perspective you won't want to miss. Tune in to learn from these clients' experiences and gain practical tips to enhance your own wealth-building journey.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this case study episode, Stuart shares an insightful journey with long-term property investor clients. He highlights key lessons learned about the importance of diversification and adapting strategies over time. 

Despite diligently managing cash flow and contributions, the clients' concentrated property portfolio delivered underwhelming returns initially. However, Stuart reveals how diversifying into other asset classes and taking an evidence-based approach ultimately put them on track for a comfortable retirement.

Along the way, he provides valuable insights on pitfalls to avoid when investing in property, recognising when professional advice is warranted, and the merits of strategic portfolio diversification. Stuart will leave listeners with a better understanding of the nuances involved in building a resilient investment portfolio over the long haul.

Whether you're a property investor or just starting out, this episode offers a relatable and thought-provoking perspective you won't want to miss. Tune in to learn from these clients' experiences and gain practical tips to enhance your own wealth-building journey.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15099136 Tue, 21 May 2024 05:00:00 +1000 558 full false EP 304: What is a strategic asset allocation? Why does it matter? EP 304: What is a strategic asset allocation? Why does it matter? Read full blog here

In this episode, Stuart delves into the concept of strategic asset allocation and its critical importance in maximising long-term investment returns. He presents evidence demonstrating the unpredictability of short-term returns across asset classes, highlighting the need for diversification. However, Stuart argues that long-term returns are more predictable due to the principle of mean reversion.

He advocates for an approach that involves actively allocating new capital towards undervalued asset classes or geographical markets, rather than blindly following a one-size-fits-all asset allocation model. Stuart believes that this strategy, though potentially leading to imbalanced portfolios in the short term, positions investors for superior long-term performance by capitalising on opportunities for above-average future returns.

Throughout the episode, Stuart emphasises the importance of maintaining a long-term perspective, employing evidence-based investment strategies, and resisting the temptation to chase short-term returns. He challenges the conventional wisdom of adhering to theoretical asset allocation models, arguing that maximising client returns should be the primary objective, even if it means adopting an unconventional approach.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here

In this episode, Stuart delves into the concept of strategic asset allocation and its critical importance in maximising long-term investment returns. He presents evidence demonstrating the unpredictability of short-term returns across asset classes, highlighting the need for diversification. However, Stuart argues that long-term returns are more predictable due to the principle of mean reversion.

He advocates for an approach that involves actively allocating new capital towards undervalued asset classes or geographical markets, rather than blindly following a one-size-fits-all asset allocation model. Stuart believes that this strategy, though potentially leading to imbalanced portfolios in the short term, positions investors for superior long-term performance by capitalising on opportunities for above-average future returns.

Throughout the episode, Stuart emphasises the importance of maintaining a long-term perspective, employing evidence-based investment strategies, and resisting the temptation to chase short-term returns. He challenges the conventional wisdom of adhering to theoretical asset allocation models, arguing that maximising client returns should be the primary objective, even if it means adopting an unconventional approach.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15058344 Wed, 15 May 2024 05:00:00 +1000 766 304 full false Case Study: Make life easier for your loved ones Case Study: Make life easier for your loved ones In this case study episode, Stuart shares a poignant experience to highlight the importance of involving loved ones in financial planning and ensuring they are well informed and prepared. He recounts working with a client, Grant, since 2009, focusing on debt reduction, superannuation, and share investing.

Tragically, Grant passed away suddenly in 2018, leaving his wife in an unfamiliar situation, having never been involved in the financial decision-making process. Stuart had to guide Grant's wife through understanding their investments, making important decisions about their home, and properly managing the estate.

While everything eventually worked out, and Grant's wife is now in a comfortable position for retirement, Stuart emphasises the significant stress and challenges that could have been avoided had proper measures been taken earlier.

The key lessons include ensuring spouses are aware of the financial situation, introducing them to advisors, and keeping important documents like wills and passwords up-to-date. Stuart reminds listeners of the critical importance of proactive financial planning, not just for themselves but also for the well-being of their loved ones.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this case study episode, Stuart shares a poignant experience to highlight the importance of involving loved ones in financial planning and ensuring they are well informed and prepared. He recounts working with a client, Grant, since 2009, focusing on debt reduction, superannuation, and share investing.

Tragically, Grant passed away suddenly in 2018, leaving his wife in an unfamiliar situation, having never been involved in the financial decision-making process. Stuart had to guide Grant's wife through understanding their investments, making important decisions about their home, and properly managing the estate.

While everything eventually worked out, and Grant's wife is now in a comfortable position for retirement, Stuart emphasises the significant stress and challenges that could have been avoided had proper measures been taken earlier.

The key lessons include ensuring spouses are aware of the financial situation, introducing them to advisors, and keeping important documents like wills and passwords up-to-date. Stuart reminds listeners of the critical importance of proactive financial planning, not just for themselves but also for the well-being of their loved ones.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15057945 Tue, 14 May 2024 05:00:00 +1000 483 full false Ep 303: Melbourne property will deliver the strongest growth over the next decade Ep 303: Melbourne property will deliver the strongest growth over the next decade Read full blog here.

In this episode, Stuart makes a compelling case for why the Melbourne property market is poised to deliver the strongest capital growth among Australian capital cities over the next decade. Despite negative sentiment driven by factors like stricter tenancy laws, increased taxation, and concerns over the state's escalating debt, Stuart argues that Melbourne's property prices are currently undervalued relative to other cities like Sydney.

He presents data illustrating how Melbourne's median house prices have underperformed in recent years, suggesting that the market is due for a rebound in line with the principle of mean reversion. Stuart emphasises that while Perth may offer higher percentage growth, Melbourne's higher starting property values could translate into more substantial dollar-based returns, which are more crucial for retirement planning.

Stuart also discusses the investment potential of Melbourne's investment-grade apartments, which he believes are intrinsically undervalued. Overall, the episode provides a data-driven and contrarian perspective on why investors should consider Melbourne as a prime investment destination for the coming decade, despite the current negative sentiment surrounding the market.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In this episode, Stuart makes a compelling case for why the Melbourne property market is poised to deliver the strongest capital growth among Australian capital cities over the next decade. Despite negative sentiment driven by factors like stricter tenancy laws, increased taxation, and concerns over the state's escalating debt, Stuart argues that Melbourne's property prices are currently undervalued relative to other cities like Sydney.

He presents data illustrating how Melbourne's median house prices have underperformed in recent years, suggesting that the market is due for a rebound in line with the principle of mean reversion. Stuart emphasises that while Perth may offer higher percentage growth, Melbourne's higher starting property values could translate into more substantial dollar-based returns, which are more crucial for retirement planning.

Stuart also discusses the investment potential of Melbourne's investment-grade apartments, which he believes are intrinsically undervalued. Overall, the episode provides a data-driven and contrarian perspective on why investors should consider Melbourne as a prime investment destination for the coming decade, despite the current negative sentiment surrounding the market.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15015935 Wed, 08 May 2024 05:00:00 +1000 1078 303 full false Case Study: Restructuring a share portfolio across two ownership structures Case Study: Restructuring a share portfolio across two ownership structures In this case study episode, Stuart shares insights from working with a high-income client who initially focused on building a property portfolio but later diversified into shares. The client's share portfolio was initially held in his wife's name due to their circumstances at the time, but a portion was later moved into a trust structure for tax efficiency.

Stuart emphasises the importance of considering all components of investment returns, including income, growth, and tax credits. He also highlights how market corrections can present opportunities for investors. The episode offers a practical example of how Stuart's approach to formulating advice has been applied, considering factors like ownership structures, asset allocation, and tax implications.

By sharing this real-life case study, Stuart aims to provide listeners with a relatable and informative illustration of the principles and methodologies he discusses in his regular weekly episodes. Listeners can expect to gain valuable insights into holistic wealth-building strategies and the practical considerations involved in implementing them effectively.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this case study episode, Stuart shares insights from working with a high-income client who initially focused on building a property portfolio but later diversified into shares. The client's share portfolio was initially held in his wife's name due to their circumstances at the time, but a portion was later moved into a trust structure for tax efficiency.

Stuart emphasises the importance of considering all components of investment returns, including income, growth, and tax credits. He also highlights how market corrections can present opportunities for investors. The episode offers a practical example of how Stuart's approach to formulating advice has been applied, considering factors like ownership structures, asset allocation, and tax implications.

By sharing this real-life case study, Stuart aims to provide listeners with a relatable and informative illustration of the principles and methodologies he discusses in his regular weekly episodes. Listeners can expect to gain valuable insights into holistic wealth-building strategies and the practical considerations involved in implementing them effectively.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-15015436 Tue, 07 May 2024 05:00:00 +1000 533 full false Ep 302: To what extent should you factor in an inheritance? Ep 302: To what extent should you factor in an inheritance? Read full blog here.

In this episode, Stuart discusses the importance of considering potential inheritances when developing long-term financial plans. He acknowledges that with the vast amount of wealth expected to be passed down in Australia over the next two decades, many individuals are likely to receive an inheritance at some point in their lives.

Stuart explores the various factors to consider when determining the extent to which an inheritance should be factored into one's investment strategy. He suggests adopting a conservative approach, as relying too heavily on an inheritance can carry risks, especially if the benefactor is relatively young and in good health.

The episode delves into how incorporating an inheritance into one's financial plan might impact decisions such as home loan repayment, investment debt reduction, and risk tolerance. Stuart also provides insights on managing inheritances efficiently, including options like testamentary trusts, superannuation contributions, and debt reduction. He emphasises the importance of seeking professional advice to navigate the tax and legal implications of inheritances.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In this episode, Stuart discusses the importance of considering potential inheritances when developing long-term financial plans. He acknowledges that with the vast amount of wealth expected to be passed down in Australia over the next two decades, many individuals are likely to receive an inheritance at some point in their lives.

Stuart explores the various factors to consider when determining the extent to which an inheritance should be factored into one's investment strategy. He suggests adopting a conservative approach, as relying too heavily on an inheritance can carry risks, especially if the benefactor is relatively young and in good health.

The episode delves into how incorporating an inheritance into one's financial plan might impact decisions such as home loan repayment, investment debt reduction, and risk tolerance. Stuart also provides insights on managing inheritances efficiently, including options like testamentary trusts, superannuation contributions, and debt reduction. He emphasises the importance of seeking professional advice to navigate the tax and legal implications of inheritances.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14972034 Wed, 01 May 2024 05:00:00 +1000 887 302 full false Case Study: SMSF are often not necessary Case Study: SMSF are often not necessary In this case study episode, Stuart shares a real-life example of how his approach to financial planning helped a client transition from an underperforming self-managed super fund (SMSF) to a more efficient and transparent investment structure.

The client had an SMSF managed by stockbrokers, heavily concentrated in Australian shares with minimal international exposure. After reviewing the fund's performance, Stuart found it had underperformed an industry fund by over 3% per annum.

Rather than divesting the existing shareholdings, which were trading below fair value, Stuart recommended transferring the assets in-specie into separate super wrap accounts for the client and their spouse. This allowed the client to maintain transparency over their direct investment holdings while eliminating the compliance obligations and costs associated with running an SMSF.

Stuart highlights the advantages of super wrap accounts, including the ability to defer capital gains tax until assets are sold, and the potential for substantial tax savings over time, especially for large balances with minimal turnover.

The episode emphasises the importance of regularly benchmarking investment performance and considering cost-effective alternatives to SMSFs, such as wrap platforms, which can provide full transparency while minimising administrative burdens and compliance costs.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this case study episode, Stuart shares a real-life example of how his approach to financial planning helped a client transition from an underperforming self-managed super fund (SMSF) to a more efficient and transparent investment structure.

The client had an SMSF managed by stockbrokers, heavily concentrated in Australian shares with minimal international exposure. After reviewing the fund's performance, Stuart found it had underperformed an industry fund by over 3% per annum.

Rather than divesting the existing shareholdings, which were trading below fair value, Stuart recommended transferring the assets in-specie into separate super wrap accounts for the client and their spouse. This allowed the client to maintain transparency over their direct investment holdings while eliminating the compliance obligations and costs associated with running an SMSF.

Stuart highlights the advantages of super wrap accounts, including the ability to defer capital gains tax until assets are sold, and the potential for substantial tax savings over time, especially for large balances with minimal turnover.

The episode emphasises the importance of regularly benchmarking investment performance and considering cost-effective alternatives to SMSFs, such as wrap platforms, which can provide full transparency while minimising administrative burdens and compliance costs.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14972057 Tue, 30 Apr 2024 05:00:00 +1000 578 full false Ep 301: Advice for first time property buyers and their parents Ep 301: Advice for first time property buyers and their parents Read full blog here.

In this episode, Stuart provides valuable insights and practical advice for first-time property buyers and their parents. He emphasises the importance of adopting an investment mindset when purchasing a home, focusing on areas with consistent supply-demand imbalances, analysing past growth patterns, and maximising land value. Stuart highlights government assistance programs like the First Home Super Saver and Home Guarantee Scheme, which can provide significant financial benefits. 

He also discusses how parents can help their children, such as offering family guarantees or cash gifts while considering potential legal and tax implications. Stuart shares a real-life example of how his team helped a first-time buyer maximise their borrowing capacity, leverage tax benefits, and protect their capital gains tax exemption.

Overall, this episode equips listeners with a comprehensive understanding of the property market, government incentives, and strategies for parents to support their children's first home purchases effectively.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In this episode, Stuart provides valuable insights and practical advice for first-time property buyers and their parents. He emphasises the importance of adopting an investment mindset when purchasing a home, focusing on areas with consistent supply-demand imbalances, analysing past growth patterns, and maximising land value. Stuart highlights government assistance programs like the First Home Super Saver and Home Guarantee Scheme, which can provide significant financial benefits. 

He also discusses how parents can help their children, such as offering family guarantees or cash gifts while considering potential legal and tax implications. Stuart shares a real-life example of how his team helped a first-time buyer maximise their borrowing capacity, leverage tax benefits, and protect their capital gains tax exemption.

Overall, this episode equips listeners with a comprehensive understanding of the property market, government incentives, and strategies for parents to support their children's first home purchases effectively.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14936867 Wed, 24 Apr 2024 05:00:00 +1000 1046 301 full false Case Study: Overcapitalising isn’t necessarily a big deal Case Study: Overcapitalising isn’t necessarily a big deal In this episode, Stuart presents a fascinating case study that challenges the traditional view on overcapitalising on a home. The clients in focus own a profitable business and have been strategically building their investment portfolio. Despite planning to spend a significant amount on constructing their dream home, Stuart reveals that overcapitalising may not be a major concern if certain conditions are met. 

The clients in question own a share in a thriving business generating over $1m pre-tax profit. They have a diverse investment portfolio and a desire to build their dream home. Despite spending almost $7m on this home, the potential for financial loss is diminished by their ability to continue investing in other assets and a solid exit strategy. Stuart highlights the importance of affordability, continued wealth-building outside of the home, and having a viable exit strategy. 

Listeners are encouraged to consider this unconventional approach to home investment, emphasising the balance between enjoying the present and securing future financial stability. This insightful episode challenges conventional wisdom and offers a fresh perspective on wealth-building strategies.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this episode, Stuart presents a fascinating case study that challenges the traditional view on overcapitalising on a home. The clients in focus own a profitable business and have been strategically building their investment portfolio. Despite planning to spend a significant amount on constructing their dream home, Stuart reveals that overcapitalising may not be a major concern if certain conditions are met. 

The clients in question own a share in a thriving business generating over $1m pre-tax profit. They have a diverse investment portfolio and a desire to build their dream home. Despite spending almost $7m on this home, the potential for financial loss is diminished by their ability to continue investing in other assets and a solid exit strategy. Stuart highlights the importance of affordability, continued wealth-building outside of the home, and having a viable exit strategy. 

Listeners are encouraged to consider this unconventional approach to home investment, emphasising the balance between enjoying the present and securing future financial stability. This insightful episode challenges conventional wisdom and offers a fresh perspective on wealth-building strategies.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14929459 Tue, 23 Apr 2024 05:00:00 +1000 372 full false Ep 300: Is it safe to borrow to invest in shares? If so, how? Ep 300: Is it safe to borrow to invest in shares? If so, how? Read full blog here.

In this episode, Stuart discusses the feasibility and strategies of borrowing to invest in shares. He compares the practice of leveraging for share investments with the more commonly accepted approach of borrowing for property investments in Australia. Stuart highlights that gearing contributes significantly to property investment returns and the same principles can be applied to share investments. 

The episode explores three borrowing options: margin loans, investment mortgages, and internally geared ETFs. Stuart addresses the higher volatility associated with shares and suggests mitigating strategies like regular investing and maintaining a conservative loan-to-value ratio.

He presents a case study demonstrating how an investor could accumulate substantial wealth by consistently investing borrowed funds alongside personal savings over an extended period of 24 years. Stuart estimates the investor would have tripled their investment by the end.

The episode concludes with Stuart's recommendations - for smaller portfolios under $500,000, he suggests internally geared ETFs, while for larger investments, he advises seeking professional guidance to ensure proper diversification and risk management through a mix of ETFs and low-cost managed funds.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In this episode, Stuart discusses the feasibility and strategies of borrowing to invest in shares. He compares the practice of leveraging for share investments with the more commonly accepted approach of borrowing for property investments in Australia. Stuart highlights that gearing contributes significantly to property investment returns and the same principles can be applied to share investments. 

The episode explores three borrowing options: margin loans, investment mortgages, and internally geared ETFs. Stuart addresses the higher volatility associated with shares and suggests mitigating strategies like regular investing and maintaining a conservative loan-to-value ratio.

He presents a case study demonstrating how an investor could accumulate substantial wealth by consistently investing borrowed funds alongside personal savings over an extended period of 24 years. Stuart estimates the investor would have tripled their investment by the end.

The episode concludes with Stuart's recommendations - for smaller portfolios under $500,000, he suggests internally geared ETFs, while for larger investments, he advises seeking professional guidance to ensure proper diversification and risk management through a mix of ETFs and low-cost managed funds.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14875535 Wed, 17 Apr 2024 05:00:00 +1000 1032 300 full false Case Study: Spending more in the first 15 years of retirement Case Study: Spending more in the first 15 years of retirement In this case study episode, Stuart takes us through a real-life scenario of a client who retired at 55 with ambitious spending goals. The client wanted to spend a hefty $300,000 per year for the first 15 years of retirement, followed by reduced spending of $200,000 and then $150,000 annually in later years. With a substantial asset base including $2 million from selling their home, $2.5 million in super, and a $4 million beach house, proper planning was crucial.

Stuart outlines the multi-faceted strategy they devised, involving property elements like investing the home sale proceeds, buying a city property, and restructuring to minimise capital gains and land taxes. Navigating investment entities and structures to optimise imputation credits was also key. Perhaps the biggest challenge was generating a high income stream, especially before the client could access their super.

This case study highlights the importance of comprehensive retirement planning that accounts for desired spending levels, makes prudent return assumptions, seamlessly integrates tax planning, and strategically utilises all available assets and income sources. An engaging listen for anyone looking to master their retirement game plan.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this case study episode, Stuart takes us through a real-life scenario of a client who retired at 55 with ambitious spending goals. The client wanted to spend a hefty $300,000 per year for the first 15 years of retirement, followed by reduced spending of $200,000 and then $150,000 annually in later years. With a substantial asset base including $2 million from selling their home, $2.5 million in super, and a $4 million beach house, proper planning was crucial.

Stuart outlines the multi-faceted strategy they devised, involving property elements like investing the home sale proceeds, buying a city property, and restructuring to minimise capital gains and land taxes. Navigating investment entities and structures to optimise imputation credits was also key. Perhaps the biggest challenge was generating a high income stream, especially before the client could access their super.

This case study highlights the importance of comprehensive retirement planning that accounts for desired spending levels, makes prudent return assumptions, seamlessly integrates tax planning, and strategically utilises all available assets and income sources. An engaging listen for anyone looking to master their retirement game plan.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14875601 Tue, 16 Apr 2024 05:00:00 +1000 510 full false Ep 299: 20 years of poor property growth… is the property party over? Ep 299: 20 years of poor property growth… is the property party over? Read full blog here.

In this episode, Stuart delves into statistical analyses and economic insights, dissecting the nuanced factors influencing property market trends over the past two decades and speculating on their implications for future investment strategies.

Commencing with a comparative analysis of median house price growth rates across major capital cities, Stuart uncovers a stark contrast between the preceding two-decade periods. He scrutinises inflation-adjusted growth figures, attributing a significant portion of the disparity to evolving economic landscapes and regulatory shifts.

He delves into pivotal events such as the Global Financial Crisis and recent pandemics, examining their impact on borrowing capacity and market sentiment. Through an exploration of historical borrowing trends and regulatory interventions, Stuart illuminates the evolving dynamics shaping property investment landscapes.

Drawing on empirical data and forward-looking projections, he advocates for a conservative approach to property investment, emphasising the importance of proactive portfolio management and market intelligence. From identifying potentially undervalued markets to leveraging value-added opportunities, Stuart empowers listeners with actionable insights to navigate uncertain terrain and maximise investment returns.

Stuart offers a prudent reminder: while the property market's future trajectory remains uncertain, strategic planning and informed decision-making can mitigate risks and position investors for long-term success. Tune in to gain invaluable perspectives on adapting to evolving market dynamics and safeguarding your property investment portfolio.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In this episode, Stuart delves into statistical analyses and economic insights, dissecting the nuanced factors influencing property market trends over the past two decades and speculating on their implications for future investment strategies.

Commencing with a comparative analysis of median house price growth rates across major capital cities, Stuart uncovers a stark contrast between the preceding two-decade periods. He scrutinises inflation-adjusted growth figures, attributing a significant portion of the disparity to evolving economic landscapes and regulatory shifts.

He delves into pivotal events such as the Global Financial Crisis and recent pandemics, examining their impact on borrowing capacity and market sentiment. Through an exploration of historical borrowing trends and regulatory interventions, Stuart illuminates the evolving dynamics shaping property investment landscapes.

Drawing on empirical data and forward-looking projections, he advocates for a conservative approach to property investment, emphasising the importance of proactive portfolio management and market intelligence. From identifying potentially undervalued markets to leveraging value-added opportunities, Stuart empowers listeners with actionable insights to navigate uncertain terrain and maximise investment returns.

Stuart offers a prudent reminder: while the property market's future trajectory remains uncertain, strategic planning and informed decision-making can mitigate risks and position investors for long-term success. Tune in to gain invaluable perspectives on adapting to evolving market dynamics and safeguarding your property investment portfolio.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14832213 Wed, 10 Apr 2024 05:00:00 +1000 931 299 full false Case Study: Rebuilding wealth post-divorce Case Study: Rebuilding wealth post-divorce In this captivating case study episode, Stuart delves into the real-life journey of rebuilding wealth post-divorce, offering invaluable lessons along the way.

Following a client's separation in 2018, Stuart outlines the financial implications and strategic decisions made during the subsequent settlement in 2019. Despite the challenges, Stuart's guidance steered the client towards retaining key assets and formulating a plan for future financial security.

Through meticulous planning and prudent investment choices, including property acquisitions and retirement strategies, Stuart demonstrates how resilience and strategic foresight can lead to successful wealth rebuilding post-divorce.

Listeners gain actionable insights into navigating complex life transitions, the importance of financial planning, and the potential for rebuilding even amidst adversity. 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this captivating case study episode, Stuart delves into the real-life journey of rebuilding wealth post-divorce, offering invaluable lessons along the way.

Following a client's separation in 2018, Stuart outlines the financial implications and strategic decisions made during the subsequent settlement in 2019. Despite the challenges, Stuart's guidance steered the client towards retaining key assets and formulating a plan for future financial security.

Through meticulous planning and prudent investment choices, including property acquisitions and retirement strategies, Stuart demonstrates how resilience and strategic foresight can lead to successful wealth rebuilding post-divorce.

Listeners gain actionable insights into navigating complex life transitions, the importance of financial planning, and the potential for rebuilding even amidst adversity. 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14832226 Tue, 09 Apr 2024 05:00:00 +1000 460 full false Ep 298: Six essential considerations when upgrading your home Ep 298: Six essential considerations when upgrading your home Read full blog here.

In this insightful episode, Stuart dives into the critical factors to weigh when upgrading your home - a decision with both significant lifestyle and financial implications. He emphasises the importance of approaching it with an investment mindset, aiming to purchase a high-quality home that aligns with your aspirations while also maximising long-term capital growth potential. 

Key topics explored include strategically stretching your borrowing capacity to afford the best property possible without overextending yourself. He provides guidance on evaluating whether to retain your existing home as an investment, the ideal sequence of buying before selling, financing options like bridging loans and assembling the right professional team.

Stuart underscores the need to remain as unemotional as possible throughout the process, leveraging the objectivity of experts like buyers' agents. He also addresses skillfully timing real estate market cycles to optimise buying and selling decisions.

With valuable real-world insights, this episode equips you to confidently navigate the complexities of upgrading your home. Maximise this impactful investment by considering all angles - from finances and tax implications to lifestyle priorities. Don't miss the expert advice on transforming your home upgrade into a wealth-building opportunity.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In this insightful episode, Stuart dives into the critical factors to weigh when upgrading your home - a decision with both significant lifestyle and financial implications. He emphasises the importance of approaching it with an investment mindset, aiming to purchase a high-quality home that aligns with your aspirations while also maximising long-term capital growth potential. 

Key topics explored include strategically stretching your borrowing capacity to afford the best property possible without overextending yourself. He provides guidance on evaluating whether to retain your existing home as an investment, the ideal sequence of buying before selling, financing options like bridging loans and assembling the right professional team.

Stuart underscores the need to remain as unemotional as possible throughout the process, leveraging the objectivity of experts like buyers' agents. He also addresses skillfully timing real estate market cycles to optimise buying and selling decisions.

With valuable real-world insights, this episode equips you to confidently navigate the complexities of upgrading your home. Maximise this impactful investment by considering all angles - from finances and tax implications to lifestyle priorities. Don't miss the expert advice on transforming your home upgrade into a wealth-building opportunity.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14784650 Wed, 03 Apr 2024 05:00:00 +1100 1195 298 full false Case Study: Estate planning, tax minimisation and portfolio management Case Study: Estate planning, tax minimisation and portfolio management In this compelling case study episode, Stuart shares a real-life example that masterfully combines estate planning, tax minimisation, and portfolio management strategies. He walks through the steps taken to optimise an unexpected multi-million dollar inheritance for a client.

The pivotal move? Establishing a testamentary trust as outlined in the will, enabling the transfer of the inherited share portfolio into this strategic structure. By distributing the income and capital gains to the client's seven grandchildren, a remarkable tax-free outcome was achieved by leveraging their lower marginal rates. 

Stuart's team then transitioned the concentrated Australian share portfolio to a more diversified, rules-based, and evidence-backed approach—reducing risk while still capturing impressive growth from $4 million in 2020 to $4.8 million today despite drawing income.

This case serves as a powerful testament to the compounding benefits of seeking timely advice and properly structuring assets.

Tune in for an insightful look at how professional guidance can potentially unlock substantial value, even from unexpected windfalls. Don't miss these real-world lessons!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this compelling case study episode, Stuart shares a real-life example that masterfully combines estate planning, tax minimisation, and portfolio management strategies. He walks through the steps taken to optimise an unexpected multi-million dollar inheritance for a client.

The pivotal move? Establishing a testamentary trust as outlined in the will, enabling the transfer of the inherited share portfolio into this strategic structure. By distributing the income and capital gains to the client's seven grandchildren, a remarkable tax-free outcome was achieved by leveraging their lower marginal rates. 

Stuart's team then transitioned the concentrated Australian share portfolio to a more diversified, rules-based, and evidence-backed approach—reducing risk while still capturing impressive growth from $4 million in 2020 to $4.8 million today despite drawing income.

This case serves as a powerful testament to the compounding benefits of seeking timely advice and properly structuring assets.

Tune in for an insightful look at how professional guidance can potentially unlock substantial value, even from unexpected windfalls. Don't miss these real-world lessons!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14784783 Tue, 02 Apr 2024 05:00:00 +1100 419 full false Ep 297: Here’s what I think about crypto Ep 297: Here’s what I think about crypto Read the full blog here.

In this episode, Stuart presents a compelling analysis of the merits and pitfalls of investing in digital assets. Despite recent surges in Bitcoin's price and endorsements from influential figures like Blackrock's CEO, he expresses significant scepticism about cryptocurrencies as a worthwhile investment. 

Stuart acknowledges the growing presence of fund managers and the proliferation of Bitcoin Exchange-Traded Funds (ETFs) as potential avenues for investment. However, he cautions against undue optimism, highlighting the commercial incentives of asset managers and the uncertain impact of ETFs on crypto's volatility. He argues that after over a decade, crypto has failed to gain wide adoption as a means of exchange beyond speculative investing and illicit activities. It lacks the fundamental utility underpinning traditional investments tied to products or services. Stuart likens crypto to a social Ponzi scheme reliant on continuously convincing new buyers.

Major drawbacks he outlines include extreme volatility undermining crypto's viability as a store of value, along with significant custody risks from unregulated exchanges vulnerable to hacking or bankruptcy. If crypto did achieve mainstream success, Stuart argues regulation would strip away its touted decentralised nature.

While some have gotten rich from crypto's rise, he cautions it operates on a zero-sum basis with equal losers. If investing, Stuart recommends only allocating what you can afford to lose within a fundamentally sound overall portfolio strategy, as the "music could stop any time on this speculative party."

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read the full blog here.

In this episode, Stuart presents a compelling analysis of the merits and pitfalls of investing in digital assets. Despite recent surges in Bitcoin's price and endorsements from influential figures like Blackrock's CEO, he expresses significant scepticism about cryptocurrencies as a worthwhile investment. 

Stuart acknowledges the growing presence of fund managers and the proliferation of Bitcoin Exchange-Traded Funds (ETFs) as potential avenues for investment. However, he cautions against undue optimism, highlighting the commercial incentives of asset managers and the uncertain impact of ETFs on crypto's volatility. He argues that after over a decade, crypto has failed to gain wide adoption as a means of exchange beyond speculative investing and illicit activities. It lacks the fundamental utility underpinning traditional investments tied to products or services. Stuart likens crypto to a social Ponzi scheme reliant on continuously convincing new buyers.

Major drawbacks he outlines include extreme volatility undermining crypto's viability as a store of value, along with significant custody risks from unregulated exchanges vulnerable to hacking or bankruptcy. If crypto did achieve mainstream success, Stuart argues regulation would strip away its touted decentralised nature.

While some have gotten rich from crypto's rise, he cautions it operates on a zero-sum basis with equal losers. If investing, Stuart recommends only allocating what you can afford to lose within a fundamentally sound overall portfolio strategy, as the "music could stop any time on this speculative party."

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14733924 Wed, 27 Mar 2024 05:00:00 +1100 799 297 full false Case Study: Property decisions have major long-term consequences Case Study: Property decisions have major long-term consequences In this episode, Stuart delves into the gravity of property decisions and their far-reaching consequences. He recounts a particularly challenging scenario where his expertise was pivotal in guiding clients through the maze of property investment considerations.

The dilemma was whether to purchase a home now or defer the decision to a later date. Many factors came into play, including borrowing capacity, taxation implications such as unrealised capital gains, and the looming prospect of escalating property prices in the future.

Striking the delicate balance between leveraging debt for investment while preserving flexibility for future home purchases demanded a comprehensive understanding of property markets, investment fundamentals, and tax implications. Stuart's approach encompassed financial modelling, taxation expertise, and traditional financial planning acumen, culminating in a meticulously crafted strategy.

The complexity of the task highlights the rarity of advisors capable of navigating such intricate terrain. Stuart emphasises the necessity of a multidisciplinary approach, acknowledging the limitations of specialists confined within their respective domains.

This case study serves as a poignant reminder of property decisions' profound impact, extending beyond mere investment returns to shape long-term financial well-being. It underscores the imperative for informed decision-making, where expertise across diverse fields converges to chart a course towards financial security and prosperity.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this episode, Stuart delves into the gravity of property decisions and their far-reaching consequences. He recounts a particularly challenging scenario where his expertise was pivotal in guiding clients through the maze of property investment considerations.

The dilemma was whether to purchase a home now or defer the decision to a later date. Many factors came into play, including borrowing capacity, taxation implications such as unrealised capital gains, and the looming prospect of escalating property prices in the future.

Striking the delicate balance between leveraging debt for investment while preserving flexibility for future home purchases demanded a comprehensive understanding of property markets, investment fundamentals, and tax implications. Stuart's approach encompassed financial modelling, taxation expertise, and traditional financial planning acumen, culminating in a meticulously crafted strategy.

The complexity of the task highlights the rarity of advisors capable of navigating such intricate terrain. Stuart emphasises the necessity of a multidisciplinary approach, acknowledging the limitations of specialists confined within their respective domains.

This case study serves as a poignant reminder of property decisions' profound impact, extending beyond mere investment returns to shape long-term financial well-being. It underscores the imperative for informed decision-making, where expertise across diverse fields converges to chart a course towards financial security and prosperity.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14717881 Tue, 26 Mar 2024 05:00:00 +1100 560 full false Ep 296: Should you ever prioritise short-term returns? Ep 296: Should you ever prioritise short-term returns? Read full blog here.

In this episode, Stuart Wemyss delves into the nuanced debate of prioritising short-term returns versus adopting a steadfast long-term investment strategy. Drawing from his extensive experience, Wemyss navigates the complexities of financial planning, urging listeners to reevaluate their approach amidst fluctuating market conditions.

He articulates the inherent advantages of a long-term perspective, emphasising its ability to filter out short-term noise and minimise risks and costs associated with frequent trading. Through insightful analysis, he elucidates the unparalleled power of compounding returns, vividly depicting wealth accumulation over time.

However, Wemyss acknowledges the allure of short-term gains and the potential benefits for novice investors seeking to bolster their financial position. Yet, he cautions against the pitfalls of addiction to short-term thinking, stressing the importance of setting clear deadlines for transitioning to a long-term approach.

He challenges conventional investment paradigms, urging listeners to prioritise patience and foresight over instant gratification. As Charlie Munger aptly states, "The big money is not in the buying and selling but in the waiting."

For investors navigating the intricate landscape of financial planning, this podcast episode offers invaluable insights and strategic perspectives to inform sound investment decisions in an ever-evolving market environment.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In this episode, Stuart Wemyss delves into the nuanced debate of prioritising short-term returns versus adopting a steadfast long-term investment strategy. Drawing from his extensive experience, Wemyss navigates the complexities of financial planning, urging listeners to reevaluate their approach amidst fluctuating market conditions.

He articulates the inherent advantages of a long-term perspective, emphasising its ability to filter out short-term noise and minimise risks and costs associated with frequent trading. Through insightful analysis, he elucidates the unparalleled power of compounding returns, vividly depicting wealth accumulation over time.

However, Wemyss acknowledges the allure of short-term gains and the potential benefits for novice investors seeking to bolster their financial position. Yet, he cautions against the pitfalls of addiction to short-term thinking, stressing the importance of setting clear deadlines for transitioning to a long-term approach.

He challenges conventional investment paradigms, urging listeners to prioritise patience and foresight over instant gratification. As Charlie Munger aptly states, "The big money is not in the buying and selling but in the waiting."

For investors navigating the intricate landscape of financial planning, this podcast episode offers invaluable insights and strategic perspectives to inform sound investment decisions in an ever-evolving market environment.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14671808 Wed, 20 Mar 2024 05:00:00 +1100 738 296 full false Case Study: How personal and business advice is often inextricably intertwined Case Study: How personal and business advice is often inextricably intertwined In this episode, Stuart delves into the intricate interplay between personal and business advice, offering practical wisdom gleaned from real-life scenarios.

In just 2.5 years, our clients' journey illustrates the fusion of business and personal financial strategies. From optimising business structures to navigating government regulations, we've streamlined operations for growth. Meanwhile, on the personal front, we've tackled property investments, leveraged borrowing capacities, and strategised for overseas living—all while safeguarding against risks like estate planning and insurance.

The key revelation lies in the symbiosis between business success and personal aspirations. As their business flourishes, their financial framework must evolve to support personal goals. Our case study underscores the necessity of adaptability in investment decisions and tax planning amidst dynamic circumstances.

Tune in to explore how a holistic approach to financial management can seamlessly align business growth with individual wealth objectives. Invest in your future by understanding the intricate dance between personal and business finances.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this episode, Stuart delves into the intricate interplay between personal and business advice, offering practical wisdom gleaned from real-life scenarios.

In just 2.5 years, our clients' journey illustrates the fusion of business and personal financial strategies. From optimising business structures to navigating government regulations, we've streamlined operations for growth. Meanwhile, on the personal front, we've tackled property investments, leveraged borrowing capacities, and strategised for overseas living—all while safeguarding against risks like estate planning and insurance.

The key revelation lies in the symbiosis between business success and personal aspirations. As their business flourishes, their financial framework must evolve to support personal goals. Our case study underscores the necessity of adaptability in investment decisions and tax planning amidst dynamic circumstances.

Tune in to explore how a holistic approach to financial management can seamlessly align business growth with individual wealth objectives. Invest in your future by understanding the intricate dance between personal and business finances.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14671670 Tue, 19 Mar 2024 05:00:00 +1100 505 full false Ep 295: Should you sell an underperforming apartment? Part 2 Ep 295: Should you sell an underperforming apartment? Part 2 Read full blog here.

In Part 1, the podcast scrutinised the performance of apartment markets in major Australian cities over the past decade, uncovering reasons behind their underperformance and prospects for a new growth cycle. 

In this podcast episode, Stuart Wemyss provides a deep dive into the critical decision of whether to sell underperforming apartments in Australia's real estate market. Wemyss meticulously analyses the performance of apartment markets in Melbourne, Sydney, and Brisbane over the past decade, shedding light on factors influencing their growth potential.

Listeners gain valuable insights into the contrasting dynamics of apartment markets across major Australian cities, from rising values in Brisbane to affordability indicators in Sydney and potential challenges in Melbourne due to market dynamics and tax implications.

Wemyss presents a practical 4-question framework to guide listeners through the decision-making process, from assessing apartment quality to exploring reinvestment options and considering block selling opportunities. He emphasises the importance of tailored advice and engaging professionals like buyers' agents, mortgage brokers, accountants, and financial advisors to make informed decisions aligned with individual financial goals.

Tune in to this episode for expert guidance on navigating the complexities of the apartment market and optimising investment strategies for maximum returns in an evolving real estate landscape.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

In Part 1, the podcast scrutinised the performance of apartment markets in major Australian cities over the past decade, uncovering reasons behind their underperformance and prospects for a new growth cycle. 

In this podcast episode, Stuart Wemyss provides a deep dive into the critical decision of whether to sell underperforming apartments in Australia's real estate market. Wemyss meticulously analyses the performance of apartment markets in Melbourne, Sydney, and Brisbane over the past decade, shedding light on factors influencing their growth potential.

Listeners gain valuable insights into the contrasting dynamics of apartment markets across major Australian cities, from rising values in Brisbane to affordability indicators in Sydney and potential challenges in Melbourne due to market dynamics and tax implications.

Wemyss presents a practical 4-question framework to guide listeners through the decision-making process, from assessing apartment quality to exploring reinvestment options and considering block selling opportunities. He emphasises the importance of tailored advice and engaging professionals like buyers' agents, mortgage brokers, accountants, and financial advisors to make informed decisions aligned with individual financial goals.

Tune in to this episode for expert guidance on navigating the complexities of the apartment market and optimising investment strategies for maximum returns in an evolving real estate landscape.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14641973 Wed, 13 Mar 2024 05:00:00 +1100 954 295 full false Ep 294: Should you sell an underperforming apartment? Part 1 Ep 294: Should you sell an underperforming apartment? Part 1 Read the full blog here.

In this podcast episode, Stuart Wemyss delves into the intriguing dilemma of whether to sell underperforming apartments in Australia's real estate market. He dissects the prolonged underperformance of apartments in Melbourne, Sydney, and Brisbane, spanning over a decade, challenging investors to reconsider their strategies in light of stagnant growth rates.
The episode navigates through the complexities of supply-demand dynamics, construction quality concerns, and shifting rental yields versus owner-occupier interest rates. Moreover, Wemyss offers insights into the evolving relationship between apartment and house prices, highlighting the current affordability gap and its implications for investment decisions.
Through meticulous analysis and astute observations, he unveils the potential triggers for a market resurgence, including dwindling new apartment starts and increasing construction costs. The episode concludes with a thought-provoking examination of the cost-benefit analysis between renting and owning, providing listeners with valuable considerations for navigating the evolving real estate landscape.
For investors seeking clarity amidst market uncertainty, this podcast episode serves as an indispensable guide, offering actionable insights and strategic perspectives to inform their investment decisions in the ever-evolving apartment market landscape.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read the full blog here.

In this podcast episode, Stuart Wemyss delves into the intriguing dilemma of whether to sell underperforming apartments in Australia's real estate market. He dissects the prolonged underperformance of apartments in Melbourne, Sydney, and Brisbane, spanning over a decade, challenging investors to reconsider their strategies in light of stagnant growth rates.
The episode navigates through the complexities of supply-demand dynamics, construction quality concerns, and shifting rental yields versus owner-occupier interest rates. Moreover, Wemyss offers insights into the evolving relationship between apartment and house prices, highlighting the current affordability gap and its implications for investment decisions.
Through meticulous analysis and astute observations, he unveils the potential triggers for a market resurgence, including dwindling new apartment starts and increasing construction costs. The episode concludes with a thought-provoking examination of the cost-benefit analysis between renting and owning, providing listeners with valuable considerations for navigating the evolving real estate landscape.
For investors seeking clarity amidst market uncertainty, this podcast episode serves as an indispensable guide, offering actionable insights and strategic perspectives to inform their investment decisions in the ever-evolving apartment market landscape.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14580506 Wed, 06 Mar 2024 05:00:00 +1100 997 294 full false Case Study: Downsizing, business exit, inheritance and more Case Study: Downsizing, business exit, inheritance and more In this episode, Stuart Wemyss unpacks a real-life case study covering downsizing, business exits, and inheritance. The client initially received fragmented advice, leading to confusion and inefficiencies in their financial strategy.

Through our integrated approach, we optimised their SMSF investments, streamlined portfolios, and strategically sold underperforming assets. With proactive business restructuring and astute estate planning, we achieved substantial tax savings.

In just 2.5 years, our collaborative efforts spanned business advice, portfolio management, tax structuring, and property guidance. This holistic approach highlights the value of a unified advisory team.

Join Stuart as he simplifies financial planning, showcasing the transformative power of integrated guidance across disciplines. This episode illustrates how synergy can unlock significant value for clients.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this episode, Stuart Wemyss unpacks a real-life case study covering downsizing, business exits, and inheritance. The client initially received fragmented advice, leading to confusion and inefficiencies in their financial strategy.

Through our integrated approach, we optimised their SMSF investments, streamlined portfolios, and strategically sold underperforming assets. With proactive business restructuring and astute estate planning, we achieved substantial tax savings.

In just 2.5 years, our collaborative efforts spanned business advice, portfolio management, tax structuring, and property guidance. This holistic approach highlights the value of a unified advisory team.

Join Stuart as he simplifies financial planning, showcasing the transformative power of integrated guidance across disciplines. This episode illustrates how synergy can unlock significant value for clients.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14581533 Tue, 05 Mar 2024 05:00:00 +1100 560 full false Ep 293: Why do some locations outperform blue-chip suburbs? Ep 293: Why do some locations outperform blue-chip suburbs? Read the full blog here.

In this podcast, Stuart Wemyss delves into the intriguing dynamics of property investment, challenging the conventional wisdom that blue-chip suburbs are always the safest bet. The episode begins by scrutinising misleading claims made by some buyers' agents, emphasising the importance of thorough due diligence in a market often lacking regulatory protection. The host addresses the recent boom in regional towns, exploring why seemingly secondary suburbs can outperform blue-chip counterparts.

Drawing on extensive research and real-life examples, the podcast highlights the pitfalls of short-term performance data and the significance of focusing on long-term investment fundamentals. Through a comparison of properties with rapid initial growth and consistent, moderate growth, the host demonstrates the lasting benefits of investment-grade locations.

The episode also examines the surprising success stories of secondary suburbs like Moorabbin, Bentleigh, and McKinnon, shedding light on factors like the affordability ripple effect and gentrification. The discussion culminates in a crucial takeaway: while there may be short-term outliers, blue-chip, investment-grade locations are ultimately the least risky and more likely to withstand market fluctuations. For potential investors seeking a nuanced perspective on property investment, this podcast offers valuable insights and challenges preconceived notions, making it a must-listen in the ever-evolving landscape of real estate.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read the full blog here.

In this podcast, Stuart Wemyss delves into the intriguing dynamics of property investment, challenging the conventional wisdom that blue-chip suburbs are always the safest bet. The episode begins by scrutinising misleading claims made by some buyers' agents, emphasising the importance of thorough due diligence in a market often lacking regulatory protection. The host addresses the recent boom in regional towns, exploring why seemingly secondary suburbs can outperform blue-chip counterparts.

Drawing on extensive research and real-life examples, the podcast highlights the pitfalls of short-term performance data and the significance of focusing on long-term investment fundamentals. Through a comparison of properties with rapid initial growth and consistent, moderate growth, the host demonstrates the lasting benefits of investment-grade locations.

The episode also examines the surprising success stories of secondary suburbs like Moorabbin, Bentleigh, and McKinnon, shedding light on factors like the affordability ripple effect and gentrification. The discussion culminates in a crucial takeaway: while there may be short-term outliers, blue-chip, investment-grade locations are ultimately the least risky and more likely to withstand market fluctuations. For potential investors seeking a nuanced perspective on property investment, this podcast offers valuable insights and challenges preconceived notions, making it a must-listen in the ever-evolving landscape of real estate.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14484423 Wed, 28 Feb 2024 05:00:00 +1100 1145 292 full false Ep 292: Warning: Share market close to all-time high. What to do… Ep 292: Warning: Share market close to all-time high. What to do… Read the full blog here.

In this insightful podcast, listeners delve into the intriguing relationship between interest rates and growth company valuations. Contrary to conventional wisdom, higher interest rates haven't significantly dampened stock market valuations, challenging prevailing expectations. With 72% of S&P 500 companies reporting higher-than-expected earnings, the resilience of the US economy stands out. However, the discussion extends beyond the US, exploring future expected returns across different geographical markets. Japan and emerging markets lead with projected 10-year returns of 9.1%, while US large caps lag at 3.0%.

The podcast doesn't just analyse; it provides actionable insights. Listeners gain strategies for navigating these market dynamics, from diversifying portfolios across Australian and ex-US markets to incorporating sustainable investments. The evidence-based approach advocated here offers a roadmap for maximising returns while mitigating risks. Whether you're a seasoned investor or just getting started, this podcast equips you with the knowledge and strategies needed to thrive in today's dynamic market landscape.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read the full blog here.

In this insightful podcast, listeners delve into the intriguing relationship between interest rates and growth company valuations. Contrary to conventional wisdom, higher interest rates haven't significantly dampened stock market valuations, challenging prevailing expectations. With 72% of S&P 500 companies reporting higher-than-expected earnings, the resilience of the US economy stands out. However, the discussion extends beyond the US, exploring future expected returns across different geographical markets. Japan and emerging markets lead with projected 10-year returns of 9.1%, while US large caps lag at 3.0%.

The podcast doesn't just analyse; it provides actionable insights. Listeners gain strategies for navigating these market dynamics, from diversifying portfolios across Australian and ex-US markets to incorporating sustainable investments. The evidence-based approach advocated here offers a roadmap for maximising returns while mitigating risks. Whether you're a seasoned investor or just getting started, this podcast equips you with the knowledge and strategies needed to thrive in today's dynamic market landscape.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14501576 Wed, 21 Feb 2024 05:00:00 +1100 1134 292 full false Case study: Property advice is crucial Case study: Property advice is crucial In my regular weekly episode, I talk about the theories, methodologies, and principles associated with investing. These case study episodes aim to share how the application of our approach to formulating advice has worked in a real-life situation. 

Case study: Property advice is crucial 

How wealth advice, property advice, and lifestyle goals are often very interrelated.  

Approached us for advice in 2019. Male-owned new-build apartment with $200k of equity. Female-owned house and land package with $260k of equity in it. They had high incomes, but also spent a lot.  

Neither of their properties would be considered investment grade.  

Advice: sell both, and invest $460k of equity in the highest quality house they can afford. Retain as much cash as possible. Don’t worry about building. Use a buyers’ agent.  

In July 2020, they bought a home for $2m. They borrowed around $1.9m = forced savings. Used family guarantee (mum’s ppty) so that they could retain cash.  

Their property is now worth $3.5m. $1.5m tax-free gain.  

It was a 10+ year strategy, and we couldn’t have anticipated that they’d be so well off after only 3 years, but it’s a good example.  

What can we learn? 

Well-rounded advice is very important.  

  • A financial advisor wouldn't have the knowledge and experience to appreciate what their next best move was.  
  • Mortgage brokers don't have the full picture.  
  • Often, buyers and agents will be too influenced by the clients’ desires. 

It's only with the benefit of hindsight do you know how valuable it can be to stretch yourself. Being too conservative can be costly.  

Cannot underestimate the tremendous lifestyle impact of upgrading the home. 

A forced savings strategy is very good for people who are spendthrifts.  

Structuring the mortgage currently was important to (1) ensure he maintained a buffer and (2) took advantage of low rates – we staggered expiries.  

 

 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In my regular weekly episode, I talk about the theories, methodologies, and principles associated with investing. These case study episodes aim to share how the application of our approach to formulating advice has worked in a real-life situation. 

Case study: Property advice is crucial 

How wealth advice, property advice, and lifestyle goals are often very interrelated.  

Approached us for advice in 2019. Male-owned new-build apartment with $200k of equity. Female-owned house and land package with $260k of equity in it. They had high incomes, but also spent a lot.  

Neither of their properties would be considered investment grade.  

Advice: sell both, and invest $460k of equity in the highest quality house they can afford. Retain as much cash as possible. Don’t worry about building. Use a buyers’ agent.  

In July 2020, they bought a home for $2m. They borrowed around $1.9m = forced savings. Used family guarantee (mum’s ppty) so that they could retain cash.  

Their property is now worth $3.5m. $1.5m tax-free gain.  

It was a 10+ year strategy, and we couldn’t have anticipated that they’d be so well off after only 3 years, but it’s a good example.  

What can we learn? 

Well-rounded advice is very important.  

  • A financial advisor wouldn't have the knowledge and experience to appreciate what their next best move was.  
  • Mortgage brokers don't have the full picture.  
  • Often, buyers and agents will be too influenced by the clients’ desires. 

It's only with the benefit of hindsight do you know how valuable it can be to stretch yourself. Being too conservative can be costly.  

Cannot underestimate the tremendous lifestyle impact of upgrading the home. 

A forced savings strategy is very good for people who are spendthrifts.  

Structuring the mortgage currently was important to (1) ensure he maintained a buffer and (2) took advantage of low rates – we staggered expiries.  

 

 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14493534 Tue, 20 Feb 2024 05:00:00 +1100 650 full false Ep 291: Investment bonds: what are they and are they worthwhile? Ep 291: Investment bonds: what are they and are they worthwhile? Read the full blog here.

Unlock the secrets of investment bonds in this podcast, diving into their tax-efficient allure, especially for children's investments. Discover the nuances of these financial products, their advantages, and potential drawbacks. Delve into the 10-year tax-free withdrawal strategy, the '125% rule,' and administration costs ranging from 0.40% to 0.60% p.a.

Join the discussion comparing investment bonds against low-cost index funds like Vanguard High Growth, unveiling the potential tax benefits and drawbacks over a 10-year period. Explore alternative options such as repaying home loans, investing in a lower-income spouse's name, and strategic approaches to minimize Capital Gains Tax (CGT).

Gain insights into the comprehensive financial planning needed for effective decision-making, with tips like park money in your home loan, consolidate investments, and create accounts for minors. Uncover the potential pitfalls and advantages of investment bonds, and why, in practice, they are rarely recommended. For a deeper understanding of wealth-building strategies and alternatives, tune in to this insightful podcast.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read the full blog here.

Unlock the secrets of investment bonds in this podcast, diving into their tax-efficient allure, especially for children's investments. Discover the nuances of these financial products, their advantages, and potential drawbacks. Delve into the 10-year tax-free withdrawal strategy, the '125% rule,' and administration costs ranging from 0.40% to 0.60% p.a.

Join the discussion comparing investment bonds against low-cost index funds like Vanguard High Growth, unveiling the potential tax benefits and drawbacks over a 10-year period. Explore alternative options such as repaying home loans, investing in a lower-income spouse's name, and strategic approaches to minimize Capital Gains Tax (CGT).

Gain insights into the comprehensive financial planning needed for effective decision-making, with tips like park money in your home loan, consolidate investments, and create accounts for minors. Uncover the potential pitfalls and advantages of investment bonds, and why, in practice, they are rarely recommended. For a deeper understanding of wealth-building strategies and alternatives, tune in to this insightful podcast.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14479977 Wed, 14 Feb 2024 05:00:00 +1100 1047 291 full false Ep 290: Accelerate home loan repayment: There are only 4 ways Ep 290: Accelerate home loan repayment: There are only 4 ways Read the full blog here.

Unlock the secrets to turbocharge your journey to a mortgage-free life! Forget the noise of countless tips – I've distilled it down to the essential, powerful strategies that truly make a difference. 

Uncover the 3-4 game-changing methods that will accelerate your home loan repayment. No fluff, just results!

Crack the Code to Lower Interest Rates: Your loyalty is costing you! Learn how to negotiate lower rates, decode the bank's retention strategy, and save big. A good mortgage broker can be your secret weapon.

Offset, Repayments, and Cash Flow Magic: Maximize the power of offset accounts, make extra repayments with confidence, and manage your cash flow like a pro. Your mortgage will thank you with interest savings that compound over time!

Flexible Strategies with Plan B: Life happens, so be prepared. Explore alternative strategies like downsizing, smart investments, or tapping into your super. Plan B ensures you're always in control.

Self-Employed? Your Accountant Holds the Key: Get personalized advice from a holistic accountant on business structures and tax optimizations tailored to your situation. We've helped many self-employed individuals fast-track their mortgage repayments – find out how!

So, don't get lost in a sea of unimportant or inferior ideas. More than 95% of success lies in a focused approach. Minimize debt costs, leverage an offset, and channel your cash flow – that's the winning formula.

Ready to revolutionize your approach to mortgage repayment? Embrace simplicity and effectiveness. Your mortgage-free future starts here!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read the full blog here.

Unlock the secrets to turbocharge your journey to a mortgage-free life! Forget the noise of countless tips – I've distilled it down to the essential, powerful strategies that truly make a difference. 

Uncover the 3-4 game-changing methods that will accelerate your home loan repayment. No fluff, just results!

Crack the Code to Lower Interest Rates: Your loyalty is costing you! Learn how to negotiate lower rates, decode the bank's retention strategy, and save big. A good mortgage broker can be your secret weapon.

Offset, Repayments, and Cash Flow Magic: Maximize the power of offset accounts, make extra repayments with confidence, and manage your cash flow like a pro. Your mortgage will thank you with interest savings that compound over time!

Flexible Strategies with Plan B: Life happens, so be prepared. Explore alternative strategies like downsizing, smart investments, or tapping into your super. Plan B ensures you're always in control.

Self-Employed? Your Accountant Holds the Key: Get personalized advice from a holistic accountant on business structures and tax optimizations tailored to your situation. We've helped many self-employed individuals fast-track their mortgage repayments – find out how!

So, don't get lost in a sea of unimportant or inferior ideas. More than 95% of success lies in a focused approach. Minimize debt costs, leverage an offset, and channel your cash flow – that's the winning formula.

Ready to revolutionize your approach to mortgage repayment? Embrace simplicity and effectiveness. Your mortgage-free future starts here!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14434081 Wed, 07 Feb 2024 05:00:00 +1100 1121 290 full false Case Study: 14+ years of playing the long game Case Study: 14+ years of playing the long game In this podcast episode, Stuart discusses a captivating case study spanning over 14 years, showcasing the positive impact of their advisory process on clients. The clients, initially with a $2 million investment base, have seen their net worth grow to $6.4 million, excluding homes, through conservative asset allocation and astute financial management. Despite a volatile market, their compounding annual growth rate stands at an impressive 8.7%. The clients, now comfortably retired, attribute their success to long-term thinking, a willingness to seek and follow advice, and the ability to stay focused on their goals amid short-term market fluctuations.

The diverse asset allocation includes investments in property, bonds, infrastructure, global property, and a mix of Australian and international shares. Stuart emphasizes the importance of understanding one's risk profile and aligning it with financial goals. The clients' disciplined cash flow management, coupled with a strategic approach to spending, has contributed to their financial security. This case study underscores the significance of a trusted advisory relationship, patience in long-term investing, and staying committed to financial goals.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In this podcast episode, Stuart discusses a captivating case study spanning over 14 years, showcasing the positive impact of their advisory process on clients. The clients, initially with a $2 million investment base, have seen their net worth grow to $6.4 million, excluding homes, through conservative asset allocation and astute financial management. Despite a volatile market, their compounding annual growth rate stands at an impressive 8.7%. The clients, now comfortably retired, attribute their success to long-term thinking, a willingness to seek and follow advice, and the ability to stay focused on their goals amid short-term market fluctuations.

The diverse asset allocation includes investments in property, bonds, infrastructure, global property, and a mix of Australian and international shares. Stuart emphasizes the importance of understanding one's risk profile and aligning it with financial goals. The clients' disciplined cash flow management, coupled with a strategic approach to spending, has contributed to their financial security. This case study underscores the significance of a trusted advisory relationship, patience in long-term investing, and staying committed to financial goals.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14436010 Tue, 06 Feb 2024 05:00:00 +1100 614 full false Ep 289: 2024 Property Outlook: Analysing the impact of inflation, tax cuts and market dynamics Ep 289: 2024 Property Outlook: Analysing the impact of inflation, tax cuts and market dynamics  Read the full blog here.

Unlock the secrets to a prosperous 2024 in the real estate market with the "2024 Property Outlook" podcast. In this insightful episode, experts delve into the intricacies of the property landscape, offering a comprehensive analysis of the potential impact of key factors such as inflation, tax cuts, and market dynamics.

Listeners can expect a deep dive into the effects of inflation on property values and rental markets, gaining valuable insights into how economic trends may shape investment opportunities. The podcast explores the nuances of tax cuts and their influence on property ownership, providing practical advice for investors looking to maximize returns in a changing fiscal environment.

One of the highlights of the episode is the examination of market dynamics, where experts break down current trends and forecast future developments. From the urban jungle to suburban havens, the podcast paints a vivid picture of what the property landscape may look like in the coming year, helping listeners make informed decisions about their real estate ventures.

Whether you're a seasoned investor or a first-time homebuyer, this podcast offers actionable intelligence to navigate the evolving property market. The hosts skillfully distill complex economic concepts into easily digestible information, ensuring that listeners walk away with a clear understanding of how inflation, tax cuts, and market dynamics may impact their property portfolios.

Don't miss out on the opportunity to stay ahead of the curve in 2024. Tune in to the "2024 Property Outlook" podcast for a strategic roadmap to navigate the ever-changing real estate terrain and position yourself for success in the year ahead.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]>  Read the full blog here.

Unlock the secrets to a prosperous 2024 in the real estate market with the "2024 Property Outlook" podcast. In this insightful episode, experts delve into the intricacies of the property landscape, offering a comprehensive analysis of the potential impact of key factors such as inflation, tax cuts, and market dynamics.

Listeners can expect a deep dive into the effects of inflation on property values and rental markets, gaining valuable insights into how economic trends may shape investment opportunities. The podcast explores the nuances of tax cuts and their influence on property ownership, providing practical advice for investors looking to maximize returns in a changing fiscal environment.

One of the highlights of the episode is the examination of market dynamics, where experts break down current trends and forecast future developments. From the urban jungle to suburban havens, the podcast paints a vivid picture of what the property landscape may look like in the coming year, helping listeners make informed decisions about their real estate ventures.

Whether you're a seasoned investor or a first-time homebuyer, this podcast offers actionable intelligence to navigate the evolving property market. The hosts skillfully distill complex economic concepts into easily digestible information, ensuring that listeners walk away with a clear understanding of how inflation, tax cuts, and market dynamics may impact their property portfolios.

Don't miss out on the opportunity to stay ahead of the curve in 2024. Tune in to the "2024 Property Outlook" podcast for a strategic roadmap to navigate the ever-changing real estate terrain and position yourself for success in the year ahead.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14375125 Wed, 31 Jan 2024 05:00:00 +1100 1045 289 full false Three steps to avoid becoming a banking scam victim Three steps to avoid becoming a banking scam victim  Read the full blog here. 

In this podcast, discover the alarming impact of scams on Australians, costing the government an estimated $3.1 billion annually. With the increasing digitalisation of our lives, particularly in banking and financial services, individuals are more vulnerable than ever to scams, making it imperative to take proactive steps to protect one's money.

The National Anti-Scam Centre reveals that scams primarily occur through phone calls, emails, and text messages, with phishing attacks comprising 44% of the most common scams. Other prevalent scams include false billing, online shopping fraud, hacking, and identity theft. While Australian banks often provide zero-liability policies for unauthorised transactions, a comprehensive Scams Code Framework is in development to enhance protection and compensation measures for victims.

Listeners are advised to adopt practical measures such as using password managers to enhance online security and being vigilant with emails, texts, and phone calls. Daily banking logins can help detect fraudulent transactions promptly while avoiding sharing sensitive information via insecure channels is emphasised. Regular software updates and the use of digital debit and credit cards are also recommended to minimise fraud risk.

The podcast sheds light on the consequences of banks' efforts to combat scams, which may result in inconveniences for customers due to account locks and increased scrutiny during certain transactions. For businesses, regular cybersecurity training for staff and secure management of excess cash are crucial elements in mitigating scam risks.

As scams become more sophisticated, staying vigilant is emphasised as a collective responsibility. By following the practical steps outlined in the podcast, listeners can significantly enhance the protection of their assets in an evolving digital landscape where scams pose an escalating threat.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]>  Read the full blog here. 

In this podcast, discover the alarming impact of scams on Australians, costing the government an estimated $3.1 billion annually. With the increasing digitalisation of our lives, particularly in banking and financial services, individuals are more vulnerable than ever to scams, making it imperative to take proactive steps to protect one's money.

The National Anti-Scam Centre reveals that scams primarily occur through phone calls, emails, and text messages, with phishing attacks comprising 44% of the most common scams. Other prevalent scams include false billing, online shopping fraud, hacking, and identity theft. While Australian banks often provide zero-liability policies for unauthorised transactions, a comprehensive Scams Code Framework is in development to enhance protection and compensation measures for victims.

Listeners are advised to adopt practical measures such as using password managers to enhance online security and being vigilant with emails, texts, and phone calls. Daily banking logins can help detect fraudulent transactions promptly while avoiding sharing sensitive information via insecure channels is emphasised. Regular software updates and the use of digital debit and credit cards are also recommended to minimise fraud risk.

The podcast sheds light on the consequences of banks' efforts to combat scams, which may result in inconveniences for customers due to account locks and increased scrutiny during certain transactions. For businesses, regular cybersecurity training for staff and secure management of excess cash are crucial elements in mitigating scam risks.

As scams become more sophisticated, staying vigilant is emphasised as a collective responsibility. By following the practical steps outlined in the podcast, listeners can significantly enhance the protection of their assets in an evolving digital landscape where scams pose an escalating threat.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14343348 Wed, 24 Jan 2024 07:00:00 +1100 1029 288 full false Investment curveballs in 2023: 4 important lessons to remember for 2024 Investment curveballs in 2023: 4 important lessons to remember for 2024 Click here to read this blog online. 

Sidebar: Wealth Editor, James Kirby and I recorded an episode of The Australia’s Money Puzzle podcast yesterday discussing our expectations for the property market in 2024: see here.

In this insightful podcast, Stuart Wemyss shares four key investment lessons gleaned from the tumultuous market of 2023, offering a compelling guide for potential listeners. Lesson one underscores the volatility of market expectations, urging investors to prioritise long-term goals over short-term forecasts. Lesson two explores the resilience required when faced with unexpected market deviations, emphasising the importance of maintaining confidence in established strategies. The third lesson advocates for steadfastness in the face of economic uncertainties, showcasing how minimal portfolio adjustments often lead to higher returns over time. Lesson four delves into the unpredictability of market conditions, cautioning against betting against prevailing trends and emphasising the potential risks of underestimating the duration of irrational market behavior.

Listeners can expect a thought-provoking discussion on the challenges and rewards of navigating the investment landscape, supported by real-world examples from 2023. The host's emphasis on data-driven decision-making, drawn from diverse sources including renowned economist John Keynes and Warren Buffett, adds a pragmatic touch to the narrative. As the podcast challenges conventional wisdom and encourages a critical examination of market insights, it promises to be an engaging resource for both seasoned and novice investors looking to refine their strategies in 2024.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Click here to read this blog online. 

Sidebar: Wealth Editor, James Kirby and I recorded an episode of The Australia’s Money Puzzle podcast yesterday discussing our expectations for the property market in 2024: see here.

In this insightful podcast, Stuart Wemyss shares four key investment lessons gleaned from the tumultuous market of 2023, offering a compelling guide for potential listeners. Lesson one underscores the volatility of market expectations, urging investors to prioritise long-term goals over short-term forecasts. Lesson two explores the resilience required when faced with unexpected market deviations, emphasising the importance of maintaining confidence in established strategies. The third lesson advocates for steadfastness in the face of economic uncertainties, showcasing how minimal portfolio adjustments often lead to higher returns over time. Lesson four delves into the unpredictability of market conditions, cautioning against betting against prevailing trends and emphasising the potential risks of underestimating the duration of irrational market behavior.

Listeners can expect a thought-provoking discussion on the challenges and rewards of navigating the investment landscape, supported by real-world examples from 2023. The host's emphasis on data-driven decision-making, drawn from diverse sources including renowned economist John Keynes and Warren Buffett, adds a pragmatic touch to the narrative. As the podcast challenges conventional wisdom and encourages a critical examination of market insights, it promises to be an engaging resource for both seasoned and novice investors looking to refine their strategies in 2024.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14307444 Wed, 17 Jan 2024 07:00:00 +1100 1169 287 full false Best of 2023 #1: How to buy the highest quality property within your budget Best of 2023 #1: How to buy the highest quality property within your budget Unlock the secrets to securing prime real estate without breaking the bank, as I, Stuart Wemyss, walk you through the strategic maze of property investment. Get ready to learn how even with modest means, you can pinpoint properties set to soar in value, thanks to the invaluable insights offered in this episode. We're scrutinizing the real estate market's ever-present supply and demand imbalance and understanding why this could be your golden ticket. I'll also reveal why the economic underpinnings of your investments are more than just background noise—they're the pulse that could dictate the heartbeat of your financial future.

Dive deeper with me as we dissect the non-negotiable characteristics of a property that's worth its weight in gold. From the undeniable influence of location to the critical contribution of land value, we leave no stone unturned. Empower yourself with the tools to assess a property's past performance and unravel the mystery of its potential, using data that demystifies the art of smart investing. And for those of you with tighter purse strings, rest assured—I've got the roadmap that will lead you to investment-grade gems in the rough, just a suburb over. This episode isn't just about property; it's about making your aspirations of wealth through savvy investing an attainable reality.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Unlock the secrets to securing prime real estate without breaking the bank, as I, Stuart Wemyss, walk you through the strategic maze of property investment. Get ready to learn how even with modest means, you can pinpoint properties set to soar in value, thanks to the invaluable insights offered in this episode. We're scrutinizing the real estate market's ever-present supply and demand imbalance and understanding why this could be your golden ticket. I'll also reveal why the economic underpinnings of your investments are more than just background noise—they're the pulse that could dictate the heartbeat of your financial future.

Dive deeper with me as we dissect the non-negotiable characteristics of a property that's worth its weight in gold. From the undeniable influence of location to the critical contribution of land value, we leave no stone unturned. Empower yourself with the tools to assess a property's past performance and unravel the mystery of its potential, using data that demystifies the art of smart investing. And for those of you with tighter purse strings, rest assured—I've got the roadmap that will lead you to investment-grade gems in the rough, just a suburb over. This episode isn't just about property; it's about making your aspirations of wealth through savvy investing an attainable reality.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14172288 Wed, 10 Jan 2024 07:00:00 +1100 1531 full false Best of 2023 - #2: Rent crisis, property prices, borrowing capacity and fundamentals – how will it affect you Best of 2023 - #2: Rent crisis, property prices, borrowing capacity and fundamentals – how will it affect you Ready to conquer the Australian rental crisis and spot the next big investment opportunity? Our latest Investopoly podcast is your treasure map through the tumultuous terrain of the property market. As the rental squeeze tightens its grip, we dissect the factors at play, from vanishing vacancies to skyrocketing rents. This isn't just a breakdown of the problem—it's a rallying cry for private investors and landlords to re-enter the game. We confront the so-called mortgage fixed rate cliff and dismantle the myths that have been circulating, showcasing why Australians are more resilient in the face of rate hikes than you might think.

Beneath the surface of the rental crisis lurks a complex web of cause and effect. Over six years, a dwindling supply of rental properties has collided with steady demand to create a perfect storm. We peel back the legislative layers to reveal how recent property market shifts have starved the rental pool, and why proposals like increased social housing or build-to-rent schemes might not be the silver bullets they're made out to be. Instead, I champion a more immediate solution: empowering the private investor. With a candid look at borrowing constraints and rising interest rates, I navigate the currents of change and pinpoint how to harness these challenges for investment success.

As we usher in an era of variable mortgage rates, the whispers of market sentiment change grow louder. I share decades of industry wisdom to explain why the transition might not spell the forewarned financial fallout and how Australia's robust economic backbone supports homeowners. And finally, as property prices teeter on the edge, I revisit my prediction of an imminent market floor. This episode isn't just about weathering the storm; it's about setting sail at the first sign of clear skies. For veterans and first-time property investors alike, now could be the moment to anchor your portfolio in tomorrow's victories.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Ready to conquer the Australian rental crisis and spot the next big investment opportunity? Our latest Investopoly podcast is your treasure map through the tumultuous terrain of the property market. As the rental squeeze tightens its grip, we dissect the factors at play, from vanishing vacancies to skyrocketing rents. This isn't just a breakdown of the problem—it's a rallying cry for private investors and landlords to re-enter the game. We confront the so-called mortgage fixed rate cliff and dismantle the myths that have been circulating, showcasing why Australians are more resilient in the face of rate hikes than you might think.

Beneath the surface of the rental crisis lurks a complex web of cause and effect. Over six years, a dwindling supply of rental properties has collided with steady demand to create a perfect storm. We peel back the legislative layers to reveal how recent property market shifts have starved the rental pool, and why proposals like increased social housing or build-to-rent schemes might not be the silver bullets they're made out to be. Instead, I champion a more immediate solution: empowering the private investor. With a candid look at borrowing constraints and rising interest rates, I navigate the currents of change and pinpoint how to harness these challenges for investment success.

As we usher in an era of variable mortgage rates, the whispers of market sentiment change grow louder. I share decades of industry wisdom to explain why the transition might not spell the forewarned financial fallout and how Australia's robust economic backbone supports homeowners. And finally, as property prices teeter on the edge, I revisit my prediction of an imminent market floor. This episode isn't just about weathering the storm; it's about setting sail at the first sign of clear skies. For veterans and first-time property investors alike, now could be the moment to anchor your portfolio in tomorrow's victories.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14183969 Wed, 03 Jan 2024 07:00:00 +1100 1513 full false Best of 2023 #3: What should be your priority: repaying your home loan or invest? Best of 2023 #3: What should be your priority: repaying your home loan or invest? Are skyrocketing interest rates making you question your investment strategy? I'm Stuart Wemyss, and on the Investopoly podcast, we tackle the dilemma facing many investors today: whether to pump surplus cash into investments or chip away at that home mortgage. As we bid farewell to the comfort of low interest rates and brace for the impact of significant hikes, this episode guides you through the emotional and financial intricacies of debt management versus investment growth.

Bearing witness to history's lowest interest rates, many of us are now reeling from the sharp climb, questioning our next financial move. Join me as we dissect the implications of a 5.8% home loan interest rate on your cash flow and compare the long-term benefits of extra loan repayments against the potential returns from growth investments. We'll navigate the complexities of after-tax returns and savings, helping you make an informed choice to secure your financial future amidst the current economic landscape.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Are skyrocketing interest rates making you question your investment strategy? I'm Stuart Wemyss, and on the Investopoly podcast, we tackle the dilemma facing many investors today: whether to pump surplus cash into investments or chip away at that home mortgage. As we bid farewell to the comfort of low interest rates and brace for the impact of significant hikes, this episode guides you through the emotional and financial intricacies of debt management versus investment growth.

Bearing witness to history's lowest interest rates, many of us are now reeling from the sharp climb, questioning our next financial move. Join me as we dissect the implications of a 5.8% home loan interest rate on your cash flow and compare the long-term benefits of extra loan repayments against the potential returns from growth investments. We'll navigate the complexities of after-tax returns and savings, helping you make an informed choice to secure your financial future amidst the current economic landscape.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14184817 Wed, 27 Dec 2023 07:00:00 +1100 834 full false Unraveling the Differences: Melbourne vs Sydney Property Markets and What's Ahead for 2024 Unraveling the Differences: Melbourne vs Sydney Property Markets and What's Ahead for 2024  Read the full blog here. 

Ever wondered why the Melbourne and Sydney housing markets are as different as chalk and cheese? Well, it's time to quench your curiosity! I'm your host, Stuart Wemyss, and in this fascinating episode, we'll be demystifying the disparities between these two major Australian cities. We'll dive deep into historical growth rates, scrutinise current property prices, and explore unique factors such as population demographics and geographical features that are making waves in these markets. We'll also confront the elephant in the room - the escalating issue of traffic congestion in both cities.

But that's not all! We are ringing in the festive season with our heartiest Christmas wishes to you, dear listeners. As we gear up for the New Year, we're thrilled to reveal a sneak peek into the marvellous content we're cooking up for our blog and website. With new team members joining us, we have more hands to curate and craft informative and engaging content to fill your 2024 with thought-provoking discussions. So buckle up and join us on this journey as we chart the course for an insightful year ahead!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]>  Read the full blog here. 

Ever wondered why the Melbourne and Sydney housing markets are as different as chalk and cheese? Well, it's time to quench your curiosity! I'm your host, Stuart Wemyss, and in this fascinating episode, we'll be demystifying the disparities between these two major Australian cities. We'll dive deep into historical growth rates, scrutinise current property prices, and explore unique factors such as population demographics and geographical features that are making waves in these markets. We'll also confront the elephant in the room - the escalating issue of traffic congestion in both cities.

But that's not all! We are ringing in the festive season with our heartiest Christmas wishes to you, dear listeners. As we gear up for the New Year, we're thrilled to reveal a sneak peek into the marvellous content we're cooking up for our blog and website. With new team members joining us, we have more hands to curate and craft informative and engaging content to fill your 2024 with thought-provoking discussions. So buckle up and join us on this journey as we chart the course for an insightful year ahead!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14096184 Wed, 13 Dec 2023 07:00:00 +1100 1076 286 full false Why common-sense tax reform is vital to Australia’s future Why common-sense tax reform is vital to Australia’s future Read the full blog here.

Are you ready to unravel the complexities of tax reform and its potential impact on Australia's fiscal landscape? Together with my co-hosts of Investopoly Podcast, we're set to examine the advantages of GST reform as a fiscal policy tool for economic management and debt reduction, rather than relying solely on monetary policy. We'll discuss the potential benefits of increasing the GST rate for non-essential goods and services as well as shedding light on how this could result in a more balanced wealth distribution across the nation. 

As we venture further into the topic, we'll cast a lens on the economic disparities within Australia, and how these might be addressed through GST reform. We'll scrutinize the current economic landscape, the rising cost of living, and how a revised GST structure might alleviate the income tax burden for many Aussies. While the probability of such a reform is low, it's certainly worth discussing and could be a step towards a stronger Australian economy. So, join us as we compare, contrast, and consider the role of tax reform in redefining the future economy of Australia.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read the full blog here.

Are you ready to unravel the complexities of tax reform and its potential impact on Australia's fiscal landscape? Together with my co-hosts of Investopoly Podcast, we're set to examine the advantages of GST reform as a fiscal policy tool for economic management and debt reduction, rather than relying solely on monetary policy. We'll discuss the potential benefits of increasing the GST rate for non-essential goods and services as well as shedding light on how this could result in a more balanced wealth distribution across the nation. 

As we venture further into the topic, we'll cast a lens on the economic disparities within Australia, and how these might be addressed through GST reform. We'll scrutinize the current economic landscape, the rising cost of living, and how a revised GST structure might alleviate the income tax burden for many Aussies. While the probability of such a reform is low, it's certainly worth discussing and could be a step towards a stronger Australian economy. So, join us as we compare, contrast, and consider the role of tax reform in redefining the future economy of Australia.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-14044773 Wed, 06 Dec 2023 07:00:00 +1100 983 285 full false What does the rental yield tell you about a property? What does the rental yield tell you about a property? Read the full blog here.

Why is the property rental yield an invaluable tool in the world of property investment? How can you interpret it to make smart decisions? Today, we're joined by Stuart Wemyss to pull back the curtain on this lucrative topic. Not only will you understand what rental yield is and how it's calculated, but we'll also dive into why they generally range between 2% and 5% in Australia. 

We'll be exploring the two main factors that influence rental yields: the size and condition of the property and its location. Stuart will share valuable insights into four possible explanations for a property's rental yield, and how to use this information to determine if a property is investment grade or not. We'll be discussing the importance of understanding the proportion of land versus building value, why a high rental yield may indicate low capital growth, and how to spot if a property is undervalued. If you're interested in property investment, this is a not-to-be-missed episode!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read the full blog here.

Why is the property rental yield an invaluable tool in the world of property investment? How can you interpret it to make smart decisions? Today, we're joined by Stuart Wemyss to pull back the curtain on this lucrative topic. Not only will you understand what rental yield is and how it's calculated, but we'll also dive into why they generally range between 2% and 5% in Australia. 

We'll be exploring the two main factors that influence rental yields: the size and condition of the property and its location. Stuart will share valuable insights into four possible explanations for a property's rental yield, and how to use this information to determine if a property is investment grade or not. We'll be discussing the importance of understanding the proportion of land versus building value, why a high rental yield may indicate low capital growth, and how to spot if a property is undervalued. If you're interested in property investment, this is a not-to-be-missed episode!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13996988 Wed, 29 Nov 2023 07:00:00 +1100 771 284 full false Why you'll probably pay more tax in an industry super fund Why you'll probably pay more tax in an industry super fund Read the full blog here.

Ever wonder how taxes impact your super funds, especially pulled super funds? Get ready to unravel the intricacies of super fund tax treatments and their potential downsides on your balance. This episode offers a deep dive into the realm of unitised products, exposing how capital gains tax liabilities can shrink your super balance, even if you don't sell. We’ll explore alternative direct investment ownership options within super, like a wrap platform or a self-managed super fund, that can shield your balance from these negative impacts. 

We won't stop there. We'll also discuss the power of direct investment ownership, including the potential to adopt evidence-based low-cost index investment methodologies, and ethical investing. Plus, we extend our heartfelt thanks to Stephen for suggesting this episode's topic. We invite more such meaningful interactions because, after all, this podcast is for you. Don't forget to share the knowledge and rate us on your listening platform. Until next week, goodbye.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read the full blog here.

Ever wonder how taxes impact your super funds, especially pulled super funds? Get ready to unravel the intricacies of super fund tax treatments and their potential downsides on your balance. This episode offers a deep dive into the realm of unitised products, exposing how capital gains tax liabilities can shrink your super balance, even if you don't sell. We’ll explore alternative direct investment ownership options within super, like a wrap platform or a self-managed super fund, that can shield your balance from these negative impacts. 

We won't stop there. We'll also discuss the power of direct investment ownership, including the potential to adopt evidence-based low-cost index investment methodologies, and ethical investing. Plus, we extend our heartfelt thanks to Stephen for suggesting this episode's topic. We invite more such meaningful interactions because, after all, this podcast is for you. Don't forget to share the knowledge and rate us on your listening platform. Until next week, goodbye.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13982546 Wed, 22 Nov 2023 07:00:00 +1100 908 284 full false Does Australia need a recession? Have we become lazy? Does Australia need a recession? Have we become lazy? Read the full blog here.

Looking ahead to Australia's economic future, we're faced with a provocative question - does Australia need a recession now? 

This episode promises to stir your thoughts and provide some food for consideration as we delve into the impact of interest rates on inflation and how this tool could be used to induce a deliberate recession. Brace yourself for an in-depth discussion of the implications of rising costs of living, including wages, energy costs, and insurance premiums, on Australians from various income brackets and debt levels. We'll also dissect how businesses may need to increase their charges to sustain their profit margins, potentially triggering a wage-price inflation spiral and an unsustainable economy.

Switching gears, we engage with the potential approach of the Reserve Bank of Australia to manipulate interest rates in an attempt to counter inflation and possibly induce a recession. We promise an enlightening exploration of its possible impact on productivity and inflation, and how this strategy could stabilize the economy for the long haul. However, this episode isn't all doom and gloom; we'll also highlight the potential opportunities in such a scenario to restructure certain industries. But we won't shy away from the possible downside either, emphasizing that a deep recession isn't necessary to gain the desired outcome. Need some insights into Australia's economic future? Prepare for a roller-coaster ride of ideas and perspectives in this episode.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read the full blog here.

Looking ahead to Australia's economic future, we're faced with a provocative question - does Australia need a recession now? 

This episode promises to stir your thoughts and provide some food for consideration as we delve into the impact of interest rates on inflation and how this tool could be used to induce a deliberate recession. Brace yourself for an in-depth discussion of the implications of rising costs of living, including wages, energy costs, and insurance premiums, on Australians from various income brackets and debt levels. We'll also dissect how businesses may need to increase their charges to sustain their profit margins, potentially triggering a wage-price inflation spiral and an unsustainable economy.

Switching gears, we engage with the potential approach of the Reserve Bank of Australia to manipulate interest rates in an attempt to counter inflation and possibly induce a recession. We promise an enlightening exploration of its possible impact on productivity and inflation, and how this strategy could stabilize the economy for the long haul. However, this episode isn't all doom and gloom; we'll also highlight the potential opportunities in such a scenario to restructure certain industries. But we won't shy away from the possible downside either, emphasizing that a deep recession isn't necessary to gain the desired outcome. Need some insights into Australia's economic future? Prepare for a roller-coaster ride of ideas and perspectives in this episode.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13959407 Wed, 15 Nov 2023 07:00:00 +1100 765 283 full false Forecasting property investing returns: 2023-2033. What can we expect? Forecasting property investing returns: 2023-2033. What can we expect? Click here to read the full blog including charts. 

What if you could double your real estate investment in a decade? Join our host, Stuart Wemyss, as he ventures into the rich field of residential real estate returns, dissecting the figures to expose a fascinating average decade-long return of 9.7%. He pulls apart this promising percentage, exploring its components of 7.3% capital growth and 2.4% net rental yield. Yet what lies behind the volatility of these returns? Wemyss will take you through the highs and lows of the past four decades, bringing the figures to life with his insightful analysis.

But that's not all. We're also delving into the complexities of the Australian rental crisis and the impact it's having on private landlords. Why are they exiting the market? How is above-average rental growth influencing capital growth? And what actions can the government take to encourage more private investors? We're going to analyse these critical issues in detail. Lastly, we turn to the future, projecting the potential wealth impact in 10 years. This episode is packed with in-depth analysis and insights that could potentially have a significant impact on your investment strategy. Prepare to see your real estate investments in a new light.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Click here to read the full blog including charts. 

What if you could double your real estate investment in a decade? Join our host, Stuart Wemyss, as he ventures into the rich field of residential real estate returns, dissecting the figures to expose a fascinating average decade-long return of 9.7%. He pulls apart this promising percentage, exploring its components of 7.3% capital growth and 2.4% net rental yield. Yet what lies behind the volatility of these returns? Wemyss will take you through the highs and lows of the past four decades, bringing the figures to life with his insightful analysis.

But that's not all. We're also delving into the complexities of the Australian rental crisis and the impact it's having on private landlords. Why are they exiting the market? How is above-average rental growth influencing capital growth? And what actions can the government take to encourage more private investors? We're going to analyse these critical issues in detail. Lastly, we turn to the future, projecting the potential wealth impact in 10 years. This episode is packed with in-depth analysis and insights that could potentially have a significant impact on your investment strategy. Prepare to see your real estate investments in a new light.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13914369 Wed, 08 Nov 2023 07:00:00 +1100 1244 282 full false Property 101: How much do you know about property? Property 101: How much do you know about property? Read the full blog here.

Ready to ramp up your grasp on the property market? Let's do it together as I, Stuart Wemyss, guide you through the labyrinth of property terminologies like never before. We'll start by unveiling the mysteries of the land value, loan to value ratio, value of improvements, comparable sales and calculating the gross rental yield, essentially everything you need to know to estimate the market value of a property. By the end of this, you won't just be a bystander in the property market, but an informed and active participant.

Wait, there's more! We don't stop at mere basics. Buckle up as we navigate through the advanced terrain of property investment terminologies including negative gearing, cash flow shortfalls, borrowing capacity, borrowable equity, and compounding capital growth rate. Learn how to calculate pre-tax and post-tax cash flow shortfalls, borrowable equity, and the compounding capital growth rate. We'll also dissect how net sale proceeds, capital gains tax and land tax can impact the potential returns. Whether you're a seasoned investor or a newbie, this podcast is set to revolutionize your understanding of the property market. So sit back, relax and let's conquer the property market together!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read the full blog here.

Ready to ramp up your grasp on the property market? Let's do it together as I, Stuart Wemyss, guide you through the labyrinth of property terminologies like never before. We'll start by unveiling the mysteries of the land value, loan to value ratio, value of improvements, comparable sales and calculating the gross rental yield, essentially everything you need to know to estimate the market value of a property. By the end of this, you won't just be a bystander in the property market, but an informed and active participant.

Wait, there's more! We don't stop at mere basics. Buckle up as we navigate through the advanced terrain of property investment terminologies including negative gearing, cash flow shortfalls, borrowing capacity, borrowable equity, and compounding capital growth rate. Learn how to calculate pre-tax and post-tax cash flow shortfalls, borrowable equity, and the compounding capital growth rate. We'll also dissect how net sale proceeds, capital gains tax and land tax can impact the potential returns. Whether you're a seasoned investor or a newbie, this podcast is set to revolutionize your understanding of the property market. So sit back, relax and let's conquer the property market together!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13870380 Wed, 01 Nov 2023 07:00:00 +1100 1270 281 full false Share market outlook: How to navigate the risks and capture the opportunities Share market outlook: How to navigate the risks and capture the opportunities Read the full blog online.

Are you prepared to conquer the volatile landscape of share market investing? We'll dissect the intricacies of this exciting yet challenging realm. We'll delve into the art of identifying potent markets through historical data, employ evidence-based methodologies to trim down investment risk, and scrutinise the performance of diverse asset classes over the previous decade. Did you know that a mere 7 stocks on the S&P 500 index account for a quarter of its total value and all its returns this year?

As we navigate deeper into the world of share market investing, we'll piece together how a meticulously curated portfolio can be your safeguard against risk and your ticket to maximising returns. We'll talk about the merits of cost-effective indexing approaches tailored to different geographical markets. Plus, we'll unravel the enigma of the law of mean reversion and how it can be wielded to boost your returns. From decoding the US CAPE ratio to analysing the top 10 most valuable stocks, this podcast is your treasure trove of investment wisdom. Whether you're a seasoned investor or a novice, this episode equips you with the strategies you need to successfully traverse the share market's rollercoaster ride of risks and rewards.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read the full blog online.

Are you prepared to conquer the volatile landscape of share market investing? We'll dissect the intricacies of this exciting yet challenging realm. We'll delve into the art of identifying potent markets through historical data, employ evidence-based methodologies to trim down investment risk, and scrutinise the performance of diverse asset classes over the previous decade. Did you know that a mere 7 stocks on the S&P 500 index account for a quarter of its total value and all its returns this year?

As we navigate deeper into the world of share market investing, we'll piece together how a meticulously curated portfolio can be your safeguard against risk and your ticket to maximising returns. We'll talk about the merits of cost-effective indexing approaches tailored to different geographical markets. Plus, we'll unravel the enigma of the law of mean reversion and how it can be wielded to boost your returns. From decoding the US CAPE ratio to analysing the top 10 most valuable stocks, this podcast is your treasure trove of investment wisdom. Whether you're a seasoned investor or a novice, this episode equips you with the strategies you need to successfully traverse the share market's rollercoaster ride of risks and rewards.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13826509 Wed, 25 Oct 2023 07:00:00 +1100 774 280 full false Should you invest your super in property with borrowings? Should you invest your super in property with borrowings? Read the full blog here. 

Are you ready to untangle the complexities of super investing in property with borrowings? We're going back in time to 2007 when the game changed for self-managed super funds. Once the laws allowed these funds to borrow for investment, it sparked a significant rise in borrowing, culminating to almost $45 billion over a decade. But things have shifted in recent years, with borrowing in super declining. What led to this change? And with new lenders on the scene offering irresistible terms, is it time to revisit this strategy? We're unpacking all this and more.

But we won't stop there. We're going even deeper to uncover the concept of borrowing to invest in superannuation. We'll discuss the tax implications of having up to $1.9 million in pension phase and the extra 15% tax on super balances above $3 million. We'll shed light on the pros and cons of this strategy, its sensitivity to changes in legislation and lending products, and why it might be a good idea to keep gearing outside of super. So get ready, it's time to demystify super investing in property.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read the full blog here. 

Are you ready to untangle the complexities of super investing in property with borrowings? We're going back in time to 2007 when the game changed for self-managed super funds. Once the laws allowed these funds to borrow for investment, it sparked a significant rise in borrowing, culminating to almost $45 billion over a decade. But things have shifted in recent years, with borrowing in super declining. What led to this change? And with new lenders on the scene offering irresistible terms, is it time to revisit this strategy? We're unpacking all this and more.

But we won't stop there. We're going even deeper to uncover the concept of borrowing to invest in superannuation. We'll discuss the tax implications of having up to $1.9 million in pension phase and the extra 15% tax on super balances above $3 million. We'll shed light on the pros and cons of this strategy, its sensitivity to changes in legislation and lending products, and why it might be a good idea to keep gearing outside of super. So get ready, it's time to demystify super investing in property.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13782555 Wed, 18 Oct 2023 07:00:00 +1100 1127 279 full false ETFs vs. Managed Funds: Which investment vehicle is right for you? ETFs vs. Managed Funds: Which investment vehicle is right for you? Read the full blog here.

Ever wondered how you could smartly diversify your investment portfolio, reduce risk and achieve commendable performance over time? What if I told you the answer lies in Exchange Traded Funds (ETFs)? Today, we're breaking down everything you need to know about ETFs. We'll discuss what an ETF is, the process of investing in one, and the fees that come with it. We'll also introduce you to the key players who ensure ETFs run smoothly, and discuss the risks involved and how market liquidity is maintained.

But we're not stopping there. We're also examining how to integrate ETFs into your investment portfolio for maximum advantages. We'll share insights on the liquidity, risk, and performance of ETFs, as well as tips on picking ETFs that align with your investment philosophy. We'll explore the wonders of diversified ETFs and discuss how combining ETFs with managed funds can give you the best of both worlds. What's more? We'll also delve into how ETFs can be a great tool for long-term savings, particularly for children. So sit back, relax, and prepare for a wealth of knowledge on ETFs and their potential role in your wealth-building strategy. This is one conversation you don't want to miss!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read the full blog here.

Ever wondered how you could smartly diversify your investment portfolio, reduce risk and achieve commendable performance over time? What if I told you the answer lies in Exchange Traded Funds (ETFs)? Today, we're breaking down everything you need to know about ETFs. We'll discuss what an ETF is, the process of investing in one, and the fees that come with it. We'll also introduce you to the key players who ensure ETFs run smoothly, and discuss the risks involved and how market liquidity is maintained.

But we're not stopping there. We're also examining how to integrate ETFs into your investment portfolio for maximum advantages. We'll share insights on the liquidity, risk, and performance of ETFs, as well as tips on picking ETFs that align with your investment philosophy. We'll explore the wonders of diversified ETFs and discuss how combining ETFs with managed funds can give you the best of both worlds. What's more? We'll also delve into how ETFs can be a great tool for long-term savings, particularly for children. So sit back, relax, and prepare for a wealth of knowledge on ETFs and their potential role in your wealth-building strategy. This is one conversation you don't want to miss!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13740836 Wed, 11 Oct 2023 07:00:00 +1100 876 278 full false How do rising construction costs impact property investment returns? How do rising construction costs impact property investment returns? Read the full blog here.

Ever thought about how rising costs of construction can impact your property investment? Brace yourself for a deep dive into the world of property investment with our expert, Stuart Wemyss. With a keen focus on construction costs, we unravel the layers of how a 5.3% p.a. increase from 1966 to 2023 can influence the building value of your property. Together, we'll decipher how these escalating costs are balanced against inevitable factors like depreciation and maintenance. Grasp the golden rule - for a property value to double every decade, the land value must appreciate by 10%. This episode will empower you with the knowledge to make shrewd investment decisions.

We shift gears to discuss the crucial role of land value in property investment. Unearth the secrets of why investing in prime land can yield higher returns. Stuart teaches us the pitfalls of being swayed by short-term performance and why placing your bets on the underlying land value can be a more profitable strategy. Join us as we untangle these complex threads and equip you with actionable strategies and tips to navigate the realm of property investment. With this episode, we promise to arm you with insights to build wealth through property like a pro!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read the full blog here.

Ever thought about how rising costs of construction can impact your property investment? Brace yourself for a deep dive into the world of property investment with our expert, Stuart Wemyss. With a keen focus on construction costs, we unravel the layers of how a 5.3% p.a. increase from 1966 to 2023 can influence the building value of your property. Together, we'll decipher how these escalating costs are balanced against inevitable factors like depreciation and maintenance. Grasp the golden rule - for a property value to double every decade, the land value must appreciate by 10%. This episode will empower you with the knowledge to make shrewd investment decisions.

We shift gears to discuss the crucial role of land value in property investment. Unearth the secrets of why investing in prime land can yield higher returns. Stuart teaches us the pitfalls of being swayed by short-term performance and why placing your bets on the underlying land value can be a more profitable strategy. Join us as we untangle these complex threads and equip you with actionable strategies and tips to navigate the realm of property investment. With this episode, we promise to arm you with insights to build wealth through property like a pro!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13696247 Wed, 04 Oct 2023 07:00:00 +1100 981 277 full false Fundamentals series #5: A simple way to manage cash flow and still enjoy the things that give you pleasure Fundamentals series #5: A simple way to manage cash flow and still enjoy the things that give you pleasure Watch the presentation on YouTube here.

Imagine a world where you have full control over your finances, where every dollar spent contributes to your joy and standard of living. This is not a dream with no basis in reality; it's completely achievable with an understanding of effective cash flow management. I'm Stuart Weems, here to guide you through this crucial financial maze. This episode uncovers the secrets of eliminating unconscious spending, enhancing your enjoyment per dollar, and the necessity of spending less than you earn. 

We'll dissect the three types of expenses – non-discretionary, conscious discretionary, and unconscious discretionary - and reveal different strategies to handle each. You'll learn how to control your unconscious discretionary spending at an aggregate level and the vital role it plays in your financial independence. We'll also discuss the two-account system – a primary account and a spending account – as a simple solution for effective cash flow management. So, join me as we embark on this journey to achieve financial freedom, one dollar at a time.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Watch the presentation on YouTube here.

Imagine a world where you have full control over your finances, where every dollar spent contributes to your joy and standard of living. This is not a dream with no basis in reality; it's completely achievable with an understanding of effective cash flow management. I'm Stuart Weems, here to guide you through this crucial financial maze. This episode uncovers the secrets of eliminating unconscious spending, enhancing your enjoyment per dollar, and the necessity of spending less than you earn. 

We'll dissect the three types of expenses – non-discretionary, conscious discretionary, and unconscious discretionary - and reveal different strategies to handle each. You'll learn how to control your unconscious discretionary spending at an aggregate level and the vital role it plays in your financial independence. We'll also discuss the two-account system – a primary account and a spending account – as a simple solution for effective cash flow management. So, join me as we embark on this journey to achieve financial freedom, one dollar at a time.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13440712 Wed, 27 Sep 2023 07:00:00 +1000 656 276 full false Fundamentals series #4: A simple, low-cost, proven approach to investing in the share market Fundamentals series #4: A simple, low-cost, proven approach to investing in the share market Watch the presentation on YouTube here.

Curious about how to navigate the seemingly complicated world of share market investing? Join me, Stuart Weems, as I unravel the key principles of investing and illustrate why you don't need to be a Wall Street expert to grow your wealth. Together, we'll explore the merits of a hands-off investment approach, the beauty of regular income streams, and the freedom of liquid investments. We'll also delve into the potential flipside - the volatility that can sometimes come with share markets, and why it's crucial to tread with caution.

In this journey, I'll share insights on simple share market investing, emphasizing the importance of getting advice tailored to your unique circumstances. We'll discuss the advantages of predictable income, the liquidity of investments, and the liberty of low costs, all while equipping you with a simple and straightforward strategy to make the most of your investments in the stock market. So, buckle up for a deep dive into the world of investing, where knowledge is power and with the right information, anyone can master the game of wealth building.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Watch the presentation on YouTube here.

Curious about how to navigate the seemingly complicated world of share market investing? Join me, Stuart Weems, as I unravel the key principles of investing and illustrate why you don't need to be a Wall Street expert to grow your wealth. Together, we'll explore the merits of a hands-off investment approach, the beauty of regular income streams, and the freedom of liquid investments. We'll also delve into the potential flipside - the volatility that can sometimes come with share markets, and why it's crucial to tread with caution.

In this journey, I'll share insights on simple share market investing, emphasizing the importance of getting advice tailored to your unique circumstances. We'll discuss the advantages of predictable income, the liquidity of investments, and the liberty of low costs, all while equipping you with a simple and straightforward strategy to make the most of your investments in the stock market. So, buckle up for a deep dive into the world of investing, where knowledge is power and with the right information, anyone can master the game of wealth building.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13440711 Wed, 20 Sep 2023 07:00:00 +1000 796 275 full false Fundamentals series #3: How much super do you need to retire comfortable? And how to maximise your balance Fundamentals series #3: How much super do you need to retire comfortable? And how to maximise your balance Watch the presentation on YouTube here.

Link to the table regarding how long super will last. 

Are you feeling overwhelmed by the complexities of superannuation and its impact on your retirement planning? Fear not! We’re here to break down these financial intricacies, equipping you with the knowledge to retire comfortably. In this dialogue, we address the pressing concerns about fluctuating super rules and government control. We dissect the restrictions on contributions, including the nitty-gritty of concessional and non-concessional contributions and their tax implications, and the potential changes to the age of super access. 

Did you know that understanding your superannuation can be the difference between an okay retirement and a golden one? In the second half of our discussion, we delve into the multifaceted world of retirement funding. We give you the tools to calculate how much superannuation you'll need to maintain your lifestyle post-retirement, taking into account crucial factors such as your age. Additionally, we highlight the importance of diversifying your assets to supplement your superannuation and create a well-rounded financial padding for your retirement. This episode is your one-stop-shop for all things superannuation and retirement planning, so tune in and future-proof your finances!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Watch the presentation on YouTube here.

Link to the table regarding how long super will last. 

Are you feeling overwhelmed by the complexities of superannuation and its impact on your retirement planning? Fear not! We’re here to break down these financial intricacies, equipping you with the knowledge to retire comfortably. In this dialogue, we address the pressing concerns about fluctuating super rules and government control. We dissect the restrictions on contributions, including the nitty-gritty of concessional and non-concessional contributions and their tax implications, and the potential changes to the age of super access. 

Did you know that understanding your superannuation can be the difference between an okay retirement and a golden one? In the second half of our discussion, we delve into the multifaceted world of retirement funding. We give you the tools to calculate how much superannuation you'll need to maintain your lifestyle post-retirement, taking into account crucial factors such as your age. Additionally, we highlight the importance of diversifying your assets to supplement your superannuation and create a well-rounded financial padding for your retirement. This episode is your one-stop-shop for all things superannuation and retirement planning, so tune in and future-proof your finances!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13440709 Wed, 13 Sep 2023 07:00:00 +1000 739 274 full false Fundamentals series #2: How to invest in property explained in 4 simple charts Fundamentals series #2: How to invest in property explained in 4 simple charts Watch the presentation on YouTube here.

Ever wonder why property investing is such a profitable avenue? It's not just the properties themselves, but the power of leveraging that plays a crucial role. Welcome to an enlightening exploration where I, Stuart Wemyss, peel back the curtain on the ins and outs of property investing. I'll be chatting about key insights like the importance of growth over income and the long-term benefits of holding onto your property investments.

In the first part of our discussion, I'll shed light on how property markets operate in two distinct cycles and why understanding these can be a game-changer for your investments. In the second segment, I'll guide you through an uncomplicated approach to property investing. The emphasis here will be on smart financial leveraging, and I'll be demonstrating the concept of compounding capital growth with the help of charts. Whether you're a seasoned investor or a beginner, this episode is set to revolutionize your perspective on property investing. Plus, for those eager to dive even deeper, I've got a link to a YouTube video that will take you further down the rabbit hole. Buckle up for a property investing masterclass like no other.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Watch the presentation on YouTube here.

Ever wonder why property investing is such a profitable avenue? It's not just the properties themselves, but the power of leveraging that plays a crucial role. Welcome to an enlightening exploration where I, Stuart Wemyss, peel back the curtain on the ins and outs of property investing. I'll be chatting about key insights like the importance of growth over income and the long-term benefits of holding onto your property investments.

In the first part of our discussion, I'll shed light on how property markets operate in two distinct cycles and why understanding these can be a game-changer for your investments. In the second segment, I'll guide you through an uncomplicated approach to property investing. The emphasis here will be on smart financial leveraging, and I'll be demonstrating the concept of compounding capital growth with the help of charts. Whether you're a seasoned investor or a beginner, this episode is set to revolutionize your perspective on property investing. Plus, for those eager to dive even deeper, I've got a link to a YouTube video that will take you further down the rabbit hole. Buckle up for a property investing masterclass like no other.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13440707 Wed, 06 Sep 2023 07:00:00 +1000 807 273 full false Fundamentals series #1: Navigating Taxes: Deductions, Gains, and Saving Tax Fundamentals series #1: Navigating Taxes: Deductions, Gains, and Saving Tax Watch the presentation on YouTube here.

Ready to level up your tax knowledge? This episode promises to make you rethink everything you thought you knew about taxes. We're breaking down complex tax concepts and deductions, from understanding ordinary and statutory income to exploring work-related expenses and super contributions. We're paving the way for you to keep more of your hard-earned money in your pocket, demonstrating how to maximize deductions and create a direct connection between your expenses and your income. You'll walk away equipped with easy-to-understand strategies and insights, ready to tackle your tax journey with confidence.

But, we're not stopping there. This episode also pulls back the curtain on Capital Gains Tax (CGT). Ever wondered what could happen if you miscalculated your tax liability? Hint: it's not pretty. We're dissecting everything, from understanding your asset's cost base and depreciation to leveraging small business CGT concessions. We're revealing how to avoid the double taxing trap and ensure your investments are tax-effective. Whether you're a salaried employee or a small business owner, this episode is designed to help you navigate the tricky waters of taxes and ensure you're not paying a cent more than you need to. Buckle up for an enlightening and empowering tax journey!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Watch the presentation on YouTube here.

Ready to level up your tax knowledge? This episode promises to make you rethink everything you thought you knew about taxes. We're breaking down complex tax concepts and deductions, from understanding ordinary and statutory income to exploring work-related expenses and super contributions. We're paving the way for you to keep more of your hard-earned money in your pocket, demonstrating how to maximize deductions and create a direct connection between your expenses and your income. You'll walk away equipped with easy-to-understand strategies and insights, ready to tackle your tax journey with confidence.

But, we're not stopping there. This episode also pulls back the curtain on Capital Gains Tax (CGT). Ever wondered what could happen if you miscalculated your tax liability? Hint: it's not pretty. We're dissecting everything, from understanding your asset's cost base and depreciation to leveraging small business CGT concessions. We're revealing how to avoid the double taxing trap and ensure your investments are tax-effective. Whether you're a salaried employee or a small business owner, this episode is designed to help you navigate the tricky waters of taxes and ensure you're not paying a cent more than you need to. Buckle up for an enlightening and empowering tax journey!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13440706 Wed, 30 Aug 2023 07:00:00 +1000 889 272 full false Would a third super fund help you retire early (before age 60)? Would a third super fund help you retire early (before age 60)? Can you imagine opening a third super fund, enabling you to accumulate assets outside of your retirement fund and plan for reduced taxes? What if you learned that you could retire earlier or cut down on work hours without stressing over super balance? Join me in this captivating discussion as we unlock financial planning strategies that propel you towards an early retirement. We'll unravel the power of a third superfund, and I promise you, it's a game-changer! Furthermore, we shed light on the dividend imputation system, a unique feature of Australia and New Zealand, aimed at avoiding double taxation of corporate profits.

As we venture into the intricate world of finance, we also explore how to leverage investment companies or trusts to manage your third fund effectively. 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Can you imagine opening a third super fund, enabling you to accumulate assets outside of your retirement fund and plan for reduced taxes? What if you learned that you could retire earlier or cut down on work hours without stressing over super balance? Join me in this captivating discussion as we unlock financial planning strategies that propel you towards an early retirement. We'll unravel the power of a third superfund, and I promise you, it's a game-changer! Furthermore, we shed light on the dividend imputation system, a unique feature of Australia and New Zealand, aimed at avoiding double taxation of corporate profits.

As we venture into the intricate world of finance, we also explore how to leverage investment companies or trusts to manage your third fund effectively. 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13400288 Wed, 23 Aug 2023 07:00:00 +1000 911 271 full false Is Perth the next property market to explode? Is Perth the next property market to explode? Click here to read the full blog.

Ever wondered why Perth’s property market remains stagnant despite booming markets elsewhere in Australia? Could Perth, in contradiction of its recent performance, soon be the next growth market? Prepare to have your assumptions challenged as we look at the current state of Perth's property market in a fresh light. Leverage insights from the Real Estate Institute of Australia and explore intriguing historical growth patterns which point to a potential surge in Perth’s property value.

We also take you on a balanced journey through the risks and rewards of investing in Perth. With its high rental yields, a tight rental market, and projected population growth, Perth may seem ripe for investment. But remember, it's not all rosy. There are risks to weigh, such as its reliance on the mining industry. Whether you’re a seasoned investor or a novice looking to enter the market, this episode is packed with invaluable data-backed insights that could change the way you view Perth's property market and your investment strategy. Tune in, and let’s decode the opportunities that Perth presents in the property investment landscape.

Property long term growth chart. 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Click here to read the full blog.

Ever wondered why Perth’s property market remains stagnant despite booming markets elsewhere in Australia? Could Perth, in contradiction of its recent performance, soon be the next growth market? Prepare to have your assumptions challenged as we look at the current state of Perth's property market in a fresh light. Leverage insights from the Real Estate Institute of Australia and explore intriguing historical growth patterns which point to a potential surge in Perth’s property value.

We also take you on a balanced journey through the risks and rewards of investing in Perth. With its high rental yields, a tight rental market, and projected population growth, Perth may seem ripe for investment. But remember, it's not all rosy. There are risks to weigh, such as its reliance on the mining industry. Whether you’re a seasoned investor or a novice looking to enter the market, this episode is packed with invaluable data-backed insights that could change the way you view Perth's property market and your investment strategy. Tune in, and let’s decode the opportunities that Perth presents in the property investment landscape.

Property long term growth chart. 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13395461 Wed, 16 Aug 2023 07:00:00 +1000 841 270 full false What is the priority: repaying your home loan or investing? What is the priority: repaying your home loan or investing? Read the full blog here.

What would you do if you had the opportunity to revolutionise your financial future? Join us as we navigate the complex world of investing and debt reduction, providing you with strategies and insights to build your wealth. This episode explores the importance of financial buffers, the power of reducing debts before retirement, and understanding how your cash flow responds to interest rate changes. We guarantee you'll walk away with a new perspective on managing your finances effectively.

Change gears with us as we delve into strategies for reducing debt when your income falls short. We evaluate various methods, including selling investments, drawing from your super, and even downsizing your home. We promise to equip you with the knowledge to make informed decisions, exploring the long-term average interest rates on home loans, potential earnings from investing in growth assets after tax, and the benefits of compounding capital growth. By the end of this episode, you'll understand the power of holding onto investments for the long-term, and how it can shape your financial future. Tune in as we guide you along the path to financial success.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read the full blog here.

What would you do if you had the opportunity to revolutionise your financial future? Join us as we navigate the complex world of investing and debt reduction, providing you with strategies and insights to build your wealth. This episode explores the importance of financial buffers, the power of reducing debts before retirement, and understanding how your cash flow responds to interest rate changes. We guarantee you'll walk away with a new perspective on managing your finances effectively.

Change gears with us as we delve into strategies for reducing debt when your income falls short. We evaluate various methods, including selling investments, drawing from your super, and even downsizing your home. We promise to equip you with the knowledge to make informed decisions, exploring the long-term average interest rates on home loans, potential earnings from investing in growth assets after tax, and the benefits of compounding capital growth. By the end of this episode, you'll understand the power of holding onto investments for the long-term, and how it can shape your financial future. Tune in as we guide you along the path to financial success.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13355522 Wed, 09 Aug 2023 07:00:00 +1000 997 269 full false Which industry super fund do I recommend? Review of returns for 2022/23 Which industry super fund do I recommend? Review of returns for 2022/23 Read full blog here.

Do you ever ponder the enigma of superannuation returns and how they're impacted by elements such as increasing interest rates and shifting work dynamics? We promise you an enlightening exploration that would shed light on these queries. We chat about the performance of different industry funds during the 2022-23 financial year, despite the tumultuous times, and how they managed to finish above average. We pull back the curtain on the top 8 industry funds, pinpointing the factors that have influenced their performance, particularly the thorny issue of unlisted asset valuation. 

Intrigued about where you should be investing your money if you're a long-term player with a high-risk appetite? We tackle this head-on, highlighting the importance of share markets. We also take a critical look at the fees charged by industry super funds in comparison to client portfolios, offering insights on the potential advantages of making a switch. And as a cherry on top, we present a compelling reason why UniSuper may just be the best industry super fund for you. Tune in for a discursive journey into the intricate world of superannuation and industry funds.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read full blog here.

Do you ever ponder the enigma of superannuation returns and how they're impacted by elements such as increasing interest rates and shifting work dynamics? We promise you an enlightening exploration that would shed light on these queries. We chat about the performance of different industry funds during the 2022-23 financial year, despite the tumultuous times, and how they managed to finish above average. We pull back the curtain on the top 8 industry funds, pinpointing the factors that have influenced their performance, particularly the thorny issue of unlisted asset valuation. 

Intrigued about where you should be investing your money if you're a long-term player with a high-risk appetite? We tackle this head-on, highlighting the importance of share markets. We also take a critical look at the fees charged by industry super funds in comparison to client portfolios, offering insights on the potential advantages of making a switch. And as a cherry on top, we present a compelling reason why UniSuper may just be the best industry super fund for you. Tune in for a discursive journey into the intricate world of superannuation and industry funds.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13305458 Wed, 02 Aug 2023 07:00:00 +1000 1142 268 full false Know when to hold 'em, or when to fold 'em Know when to hold 'em, or when to fold 'em Ready to unlock the secret to successful investing that many overlook? This episode promises to reveal the power of patience in building a solid financial future. Inspired by the wisdom of Charlie Munger, Warren Buffet's long-term business partner, we'll explore how discipline and patience can yield incredible investment returns. Unpredictability is part and parcel of the short-term investment game, but when you're in for the long haul, returns become more stable. To illustrate, we'll walk you through a real-life example of a client who learned the art of waiting in property investment.

But the revelation doesn't stop there! We'll also help you grasp the vital role that major industry super funds play in managing your wealth. Get ready to understand the intricacies of the 2023 financial year superannuation returns. And here's the twist - the art of 'doing nothing' can be a game-changer in the world of investments. This episode is a blend of theoretical insights, practical examples, and anticipatory guidance, all aimed at equipping you to build a prosperous financial future. Tune in and elevate your investing prowess!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Ready to unlock the secret to successful investing that many overlook? This episode promises to reveal the power of patience in building a solid financial future. Inspired by the wisdom of Charlie Munger, Warren Buffet's long-term business partner, we'll explore how discipline and patience can yield incredible investment returns. Unpredictability is part and parcel of the short-term investment game, but when you're in for the long haul, returns become more stable. To illustrate, we'll walk you through a real-life example of a client who learned the art of waiting in property investment.

But the revelation doesn't stop there! We'll also help you grasp the vital role that major industry super funds play in managing your wealth. Get ready to understand the intricacies of the 2023 financial year superannuation returns. And here's the twist - the art of 'doing nothing' can be a game-changer in the world of investments. This episode is a blend of theoretical insights, practical examples, and anticipatory guidance, all aimed at equipping you to build a prosperous financial future. Tune in and elevate your investing prowess!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13266237 Wed, 26 Jul 2023 16:00:00 +1000 878 267 full false Laying the Foundation for Wealth: A Guide to Successful Investing Laying the Foundation for Wealth: A Guide to Successful Investing Read the full blog here.

Are you ready to uncover the secrets of successful investing? I promise, this episode will equip you with the essential knowledge and strategies needed to lay a solid foundation for wealth-building. As your host, Stuart Wemyss, we'll be tackling the pivotal first steps in this wealth-creation journey. Drawing inspiration from Stephen Covey, we'll explore the necessity of having a clear goal, understanding the significance of wealth accumulation, and how it can radically alter your financial decisions.

But that's not all. We'll also be diving into the value of your team in wealth-building. Hear the insights on leveraging the experience of others to sidestep costly mistakes and enhance your decision-making prowess in investing. We'll also dissect the crucial aspect of mastering your cash flow, showing how to eliminate unnecessary expenditure and the importance of spending less than you earn. So gear up and join the conversation as we navigate the path to successful wealth-building together.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read the full blog here.

Are you ready to uncover the secrets of successful investing? I promise, this episode will equip you with the essential knowledge and strategies needed to lay a solid foundation for wealth-building. As your host, Stuart Wemyss, we'll be tackling the pivotal first steps in this wealth-creation journey. Drawing inspiration from Stephen Covey, we'll explore the necessity of having a clear goal, understanding the significance of wealth accumulation, and how it can radically alter your financial decisions.

But that's not all. We'll also be diving into the value of your team in wealth-building. Hear the insights on leveraging the experience of others to sidestep costly mistakes and enhance your decision-making prowess in investing. We'll also dissect the crucial aspect of mastering your cash flow, showing how to eliminate unnecessary expenditure and the importance of spending less than you earn. So gear up and join the conversation as we navigate the path to successful wealth-building together.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13235334 Wed, 19 Jul 2023 07:00:00 +1000 861 266 full false Should you invest or repay your home loan? A long-term perspective... Should you invest or repay your home loan? A long-term perspective... Read the full blog here.

Are you ready to challenge conventional wisdom about investing and home loan repayment strategies when interest rates are on the rise? I share why it's essential to rethink your investment tactics in the face of increasing interest rates. We will compare after-tax returns from both scenarios - investing in growth assets or focusing on home loan repayment. By the end of the episode, you'll have a clear understanding of the significance of compounding returns and how they shape wealth building.

In the second half, we peel back the layers of uncertainty that cloud investment returns, emphasizing the importance of long-term strategies rather than chasing short-term gains. I offer strategies for balancing debt reduction and investing, showing you how it's feasible to reduce non-tax deductible debt while simultaneously investing. We'll consider personal circumstances, risk tolerance, and future income expectations to tailor the right approach for you. Tune in and discover how to navigate the turbulent waters of investing and home loan repayments in a high-interest-rate environment.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read the full blog here.

Are you ready to challenge conventional wisdom about investing and home loan repayment strategies when interest rates are on the rise? I share why it's essential to rethink your investment tactics in the face of increasing interest rates. We will compare after-tax returns from both scenarios - investing in growth assets or focusing on home loan repayment. By the end of the episode, you'll have a clear understanding of the significance of compounding returns and how they shape wealth building.

In the second half, we peel back the layers of uncertainty that cloud investment returns, emphasizing the importance of long-term strategies rather than chasing short-term gains. I offer strategies for balancing debt reduction and investing, showing you how it's feasible to reduce non-tax deductible debt while simultaneously investing. We'll consider personal circumstances, risk tolerance, and future income expectations to tailor the right approach for you. Tune in and discover how to navigate the turbulent waters of investing and home loan repayments in a high-interest-rate environment.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13191149 Wed, 12 Jul 2023 07:00:00 +1000 740 265 full false Decoding Homeownership: Financial Implications of Renting vs Owning, Tax Exemptions, and More Decoding Homeownership: Financial Implications of Renting vs Owning, Tax Exemptions, and More Read the full blog here.

Ever thought about the financial impacts of owning a home versus renting? We'll be tackling this head-on today. I'm Stuart Wemyss, your guide through this financial labyrinth, and I'm going to clear up some key misconceptions around capital gains tax exemptions and how they can still apply even when renting out your property. We'll decode the six-year rule and its effects on your exemption. Plus, I'll break down the difference between land tax and capital gains tax, and explain how it impacts your exemptions. 

As we venture further, we'll explore how a downsizing strategy could be your ticket to paying off non-deductible debt, even if that dream home is a little out of reach. We'll also navigate the uncertainties of renting; like that all too familiar fear of being displaced if your landlord decides not to renew the lease. And we'll take a realistic look at the cost of maintaining a family home – spoiler alert, it can sometimes be higher than an investment property. Tune in for a wealth of knowledge, insights, and tips to help you blaze your trail to financial stability.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read the full blog here.

Ever thought about the financial impacts of owning a home versus renting? We'll be tackling this head-on today. I'm Stuart Wemyss, your guide through this financial labyrinth, and I'm going to clear up some key misconceptions around capital gains tax exemptions and how they can still apply even when renting out your property. We'll decode the six-year rule and its effects on your exemption. Plus, I'll break down the difference between land tax and capital gains tax, and explain how it impacts your exemptions. 

As we venture further, we'll explore how a downsizing strategy could be your ticket to paying off non-deductible debt, even if that dream home is a little out of reach. We'll also navigate the uncertainties of renting; like that all too familiar fear of being displaced if your landlord decides not to renew the lease. And we'll take a realistic look at the cost of maintaining a family home – spoiler alert, it can sometimes be higher than an investment property. Tune in for a wealth of knowledge, insights, and tips to help you blaze your trail to financial stability.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13150440 Wed, 05 Jul 2023 07:00:00 +1000 1092 264 full false Surviving the high interest rates: tips to navigate the next few months Surviving the high interest rates: tips to navigate the next few months Read the full blog here.

How long can we expect the current high interest rates to stick around, and what can we do to navigate this challenging financial climate? I share my  insights and tips on managing debt and restructuring loans to soften the blow of rising rates, while also taking a look back at interest rates over the past 40 years to make sense of the current situation. 

As we explore the impact of these higher rates on consumer spending, I also discuss how Australians have been taking advantage of lower interest rates by building up their buffers and reveal the surprising reasons why people with higher incomes have benefited more from low rates than those with lower levels of debt. Plus, I share two enlightening CBA charts that paint a clear picture of what's to come. Don't miss this essential episode to help you stay afloat in the rough waters of today's financial landscape!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read the full blog here.

How long can we expect the current high interest rates to stick around, and what can we do to navigate this challenging financial climate? I share my  insights and tips on managing debt and restructuring loans to soften the blow of rising rates, while also taking a look back at interest rates over the past 40 years to make sense of the current situation. 

As we explore the impact of these higher rates on consumer spending, I also discuss how Australians have been taking advantage of lower interest rates by building up their buffers and reveal the surprising reasons why people with higher incomes have benefited more from low rates than those with lower levels of debt. Plus, I share two enlightening CBA charts that paint a clear picture of what's to come. Don't miss this essential episode to help you stay afloat in the rough waters of today's financial landscape!

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13114742 Wed, 28 Jun 2023 07:00:00 +1000 969 263 full false Borrowing capacity isn’t enough to invest in property? What to do… Borrowing capacity isn’t enough to invest in property? What to do… Read the full blog here. 

What if your borrowing capacity isn't enough to allow you to invest in a high-quality property? Should you reduce your budget or consider investing  in shares? 

Discover the similarities and differences between property and share investments, as well as the benefits of borrowing to invest. Gain valuable insights on investing in the share market, the significance of timing, and the necessity of financial advice when investing large sums of money over extended periods. Don't miss this opportunity to enhance your investment strategies and grow your wealth through careful planning and expert advice.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read the full blog here. 

What if your borrowing capacity isn't enough to allow you to invest in a high-quality property? Should you reduce your budget or consider investing  in shares? 

Discover the similarities and differences between property and share investments, as well as the benefits of borrowing to invest. Gain valuable insights on investing in the share market, the significance of timing, and the necessity of financial advice when investing large sums of money over extended periods. Don't miss this opportunity to enhance your investment strategies and grow your wealth through careful planning and expert advice.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13062935 Wed, 21 Jun 2023 07:00:00 +1000 1310 262 full false Navigating Stubborn Inflation: Risks, strategies, and portfolio construction for a possible decade of rising prices Navigating Stubborn Inflation: Risks, strategies, and portfolio construction for a possible decade of rising prices Click here to read the blog online. 

What if inflation remains stubbornly high for over a decade? Today, I explore the potential risks of increased inflation and interest rates, based on compelling research by US firm Research Affiliates. We delve into the historical behavour of inflation since 1970 and discuss the significant impact of low interest rates and quantitative easing on the current inflation scenario.

Join me as I examine the ripple effects of higher interest rates on borrowers, the possibility of a wage-price spiral fuelling inflation, and the role of housing costs and energy prices in the consumer price index. I also share insights on portfolio construction during these complex times, including strategies to invest in equities, REITs, and bonds without dramatically reducing exposure. Together, we'll navigate the challenges and uncertainties of the financial landscape, focusing on long-term goals and wealth-building strategies.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Click here to read the blog online. 

What if inflation remains stubbornly high for over a decade? Today, I explore the potential risks of increased inflation and interest rates, based on compelling research by US firm Research Affiliates. We delve into the historical behavour of inflation since 1970 and discuss the significant impact of low interest rates and quantitative easing on the current inflation scenario.

Join me as I examine the ripple effects of higher interest rates on borrowers, the possibility of a wage-price spiral fuelling inflation, and the role of housing costs and energy prices in the consumer price index. I also share insights on portfolio construction during these complex times, including strategies to invest in equities, REITs, and bonds without dramatically reducing exposure. Together, we'll navigate the challenges and uncertainties of the financial landscape, focusing on long-term goals and wealth-building strategies.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-13012695 Wed, 14 Jun 2023 07:00:00 +1000 1129 261 full false How much money should you give away now? How much money should you give away now? Some people plan to give money to beneficiaries (typically children and/or charities) before they pass away, especially if they consider they have more than enough money i.e., surplus wealth. Often, their thesis is that their kids can make good use of the money now, whilst they are younger, rather than waiting another couple of decades. By that time, they’ll probably already be financially established. 

I discuss what you must consider before making an early inherence. 

Inheritance tsunami

I’ve stated before that the amount of inheritance (mainly from the baby boomer generation) that is likely to be passed on will increase fourfold over the next three decades. Approximately, $3.5 trillion will be bequeathed over the next decade to reach $224 billion per year by 2050! That’s huge. 

However, according to ANZ Private Bank’s research, approximately 70% of intergenerational wealth transfers fail because of family conflicts and other problems. The best way to avoid many of these problems is to gift wealth prior to death. 

Inheritances are often received too late in life

Typically, by the time both parents have passed away, most people are already (financially) well established. They have worked hard to pay for the costs of raising a family, repaying a home loan, investing in super and other assets. Receiving an inherence will only make an already strong financial position, even stronger. 

Arguably, and putting aside that I think a bit of ‘financial struggle’ is beneficial and necessary, it would be more useful for people to receive inherences earlier in life. It would help them upgrade their home sooner (and maybe get into a good public-school zone) and invest sooner, thereby benefiting from compounding capital growth. 

It’s possible that future generations could continue to benefit from early inherence if your children agree to repeating the practice. That is; I’m going to give you an early inherence on the understanding that you will make smart financial decisions, which hopefully puts you in the position of being able to do the same for your children. Of course, nothing is guaranteed especially when gifting monies.

Avoiding family disputes

Most family disputes can be avoided with clear, regular and forthright communication. If all beneficiaries know what their entitlements will be (when you die), a dispute is less likely. However, the best way to avoid disputes is to gift monies whilst you are alive – as you can manage relationships and ensure people are treated fairly. This is a big advantage that results from making an early inherence.  

What if they waste the money? 

Once you gift monies, you relinquish control over what the recipient does with them. Sometimes, donors worry that recipients may “waste” the money they receive on frivolous items.  

However, in my decades of experience, I have found that recipients treat inherited monies often with more care, diligence and respect than they do their own money. I haven’t (yet) come across a situation where someone has “wasted” an early inherence. Admittedly, all my clients are responsible with money.   

Of course, it makes sense to consider whether a recipient is likely to make smart financial decisions. If they have a long history of doing so, then it’s likely your gift will be in good hands. 

How to work out how much to gift and when 

The main risk with making an early inherence is that you give too much away and compromise your own ability to fund your retirement. 

The best way to mitigate that risk is to prepare financial projections and be conservative with your assumptions regarding (1) future investment returns and (2) how much you spend each year (living expenses). 

For example, I can

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Some people plan to give money to beneficiaries (typically children and/or charities) before they pass away, especially if they consider they have more than enough money i.e., surplus wealth. Often, their thesis is that their kids can make good use of the money now, whilst they are younger, rather than waiting another couple of decades. By that time, they’ll probably already be financially established. 

I discuss what you must consider before making an early inherence. 

Inheritance tsunami

I’ve stated before that the amount of inheritance (mainly from the baby boomer generation) that is likely to be passed on will increase fourfold over the next three decades. Approximately, $3.5 trillion will be bequeathed over the next decade to reach $224 billion per year by 2050! That’s huge. 

However, according to ANZ Private Bank’s research, approximately 70% of intergenerational wealth transfers fail because of family conflicts and other problems. The best way to avoid many of these problems is to gift wealth prior to death. 

Inheritances are often received too late in life

Typically, by the time both parents have passed away, most people are already (financially) well established. They have worked hard to pay for the costs of raising a family, repaying a home loan, investing in super and other assets. Receiving an inherence will only make an already strong financial position, even stronger. 

Arguably, and putting aside that I think a bit of ‘financial struggle’ is beneficial and necessary, it would be more useful for people to receive inherences earlier in life. It would help them upgrade their home sooner (and maybe get into a good public-school zone) and invest sooner, thereby benefiting from compounding capital growth. 

It’s possible that future generations could continue to benefit from early inherence if your children agree to repeating the practice. That is; I’m going to give you an early inherence on the understanding that you will make smart financial decisions, which hopefully puts you in the position of being able to do the same for your children. Of course, nothing is guaranteed especially when gifting monies.

Avoiding family disputes

Most family disputes can be avoided with clear, regular and forthright communication. If all beneficiaries know what their entitlements will be (when you die), a dispute is less likely. However, the best way to avoid disputes is to gift monies whilst you are alive – as you can manage relationships and ensure people are treated fairly. This is a big advantage that results from making an early inherence.  

What if they waste the money? 

Once you gift monies, you relinquish control over what the recipient does with them. Sometimes, donors worry that recipients may “waste” the money they receive on frivolous items.  

However, in my decades of experience, I have found that recipients treat inherited monies often with more care, diligence and respect than they do their own money. I haven’t (yet) come across a situation where someone has “wasted” an early inherence. Admittedly, all my clients are responsible with money.   

Of course, it makes sense to consider whether a recipient is likely to make smart financial decisions. If they have a long history of doing so, then it’s likely your gift will be in good hands. 

How to work out how much to gift and when 

The main risk with making an early inherence is that you give too much away and compromise your own ability to fund your retirement. 

The best way to mitigate that risk is to prepare financial projections and be conservative with your assumptions regarding (1) future investment returns and (2) how much you spend each year (living expenses). 

For example, I can

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-12973221 Wed, 07 Jun 2023 07:00:00 +1000 975 260 full false Does household income drive property prices? Does household income drive property prices? Commentators often refer to the price of property relative to household incomes. For example, it is estimated that property in Melbourne and Sydney now costs more than 10 times the median household income. 

But is this really a meaningful measure because if it is, property cannot continue to grow at a faster rate than incomes (a point often made). 

If prices continue to rise faster than income, how will property be affordable?

At the beginning of this year, I wrote about the factors that have driven property prices higher over the past four decades. I concluded that borrowing capacity together with higher incomes have increased 3.5x since 1980, whereas property prices have increased 4.5x. That is, prices have grown faster than incomes and borrowing capacity growth combined. Clearly, something else has contributed to property growth for it to be affordable for some buyers. 

It is worth stating at this point that borrowing capacity is likely to be flat in the future. That is, borrowing capacity will not increase anywhere near it has over the past four decades. That will probably have an adverse effect on property price growth in many locations. 

Do locations with higher incomes perform better? 

Data analyst, Jeremy Sheppard has done some work on this question and found there’s a weak statistical relationship between income and capital growth rates. The thesis is that people that earn more can afford to pay more for property. Therefore, we should invest in locations that have above average household incomes. A big problem with Jeremy’s analysis is that the data may not be accurate and/or out of date (which Jeremy acknowledges), so this thesis is impossible to test. 

I think the reality is that incomes do have an impact, but so do many other factors, so it is impossible to isolate the impact of income alone. Also, do you really need census data to identify the locations that wealthy people want to live in? I think those locations are pretty obvious.  

What other factors may be pushing property prices higher? 

Approximately, one-third of Australians own their home without a mortgage, one-third own their home with a mortgage and one-third rent. That means that approximately two-thirds of Australians’ (owner-occupier) property decisions are driven by lifestyle goals. Of course, people will draw on financial resources other than income to achieve their lifestyle goals.

Property prices can be driven higher by two factors. Firstly, an appreciation of the underlying land value (which is a function of supply and demand). Secondly, improvements on the land e.g., renovations, rebuild, etc. It is important to remember this when studying how median prices have changed over time. Houses are more expensive because, to some extent, the dwellings have been improved.  

I discuss the financial resources that some people use to upgrade their homes and/or invest in property. 

Investment returns 

Share markets have returned circa 10% p.a. over the past 40 years. Super funds have delivered similar returns (circa 9% p.a.). Some of this ‘wealth effect’ will eventually make its way into the property market as investors use some of this wealth to upgrade, improve their home, and/or invest. 

To read more go to: 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Commentators often refer to the price of property relative to household incomes. For example, it is estimated that property in Melbourne and Sydney now costs more than 10 times the median household income. 

But is this really a meaningful measure because if it is, property cannot continue to grow at a faster rate than incomes (a point often made). 

If prices continue to rise faster than income, how will property be affordable?

At the beginning of this year, I wrote about the factors that have driven property prices higher over the past four decades. I concluded that borrowing capacity together with higher incomes have increased 3.5x since 1980, whereas property prices have increased 4.5x. That is, prices have grown faster than incomes and borrowing capacity growth combined. Clearly, something else has contributed to property growth for it to be affordable for some buyers. 

It is worth stating at this point that borrowing capacity is likely to be flat in the future. That is, borrowing capacity will not increase anywhere near it has over the past four decades. That will probably have an adverse effect on property price growth in many locations. 

Do locations with higher incomes perform better? 

Data analyst, Jeremy Sheppard has done some work on this question and found there’s a weak statistical relationship between income and capital growth rates. The thesis is that people that earn more can afford to pay more for property. Therefore, we should invest in locations that have above average household incomes. A big problem with Jeremy’s analysis is that the data may not be accurate and/or out of date (which Jeremy acknowledges), so this thesis is impossible to test. 

I think the reality is that incomes do have an impact, but so do many other factors, so it is impossible to isolate the impact of income alone. Also, do you really need census data to identify the locations that wealthy people want to live in? I think those locations are pretty obvious.  

What other factors may be pushing property prices higher? 

Approximately, one-third of Australians own their home without a mortgage, one-third own their home with a mortgage and one-third rent. That means that approximately two-thirds of Australians’ (owner-occupier) property decisions are driven by lifestyle goals. Of course, people will draw on financial resources other than income to achieve their lifestyle goals.

Property prices can be driven higher by two factors. Firstly, an appreciation of the underlying land value (which is a function of supply and demand). Secondly, improvements on the land e.g., renovations, rebuild, etc. It is important to remember this when studying how median prices have changed over time. Houses are more expensive because, to some extent, the dwellings have been improved.  

I discuss the financial resources that some people use to upgrade their homes and/or invest in property. 

Investment returns 

Share markets have returned circa 10% p.a. over the past 40 years. Super funds have delivered similar returns (circa 9% p.a.). Some of this ‘wealth effect’ will eventually make its way into the property market as investors use some of this wealth to upgrade, improve their home, and/or invest. 

To read more go to: 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-12929161 Wed, 31 May 2023 07:00:00 +1000 762 259 full false The news is mostly bad for commercial property investors The news is mostly bad for commercial property investors All investment asset classes move in cycles. Investment returns are almost never linear. As such, investors must expect good and bad periods, which is why patience and discipline are big contributors to an investor’s success. 

I suspect that commercial property investors’ patience and discipline are about to be tested. This asset class is facing a lot of challenges. However, as they say, every cloud has a silver lining so there could be good investment opportunities over the coming months and years. 

What challenges is commercial property facing? 

Commercial property was the asset class that was the most adversely impacted by Covid lockdowns, especially the retail and office sectors. 

Commercial property landlords had to provide rent waivers and reductions to retail tenants to help them through lockdown periods. But, unfortunately, not all retail businesses survived which increased vacancy rates. 

Employees were also encouraged to work from home for long periods of time. This experience demonstrated that people did not necessarily need to be in the office full-time. As such, most of the office workforce has adopted a hybrid work model that involves working from home 2 to 3 days per week. The consequence of this is that large employers have reduced their commercial office footprint. In addition, businesses have been less inclined to commit to new leases until they can ascertain what long-term working arrangements may look like. 

The upshot of this is that tenant demand for office and retail property is very low at the moment.  

That said, things are changing - albeit slowly. More employers are demanding that their workforce spend more time in the office. nab is probably the largest corporate leading this charge demanding all senior managers work from the office 5-days per week. I expect other large corporates to follow, especially if the unemployment rate normalises (it’s currently 3.5% - the normal level is circa 5%). 

But the real problem is cap rates!

Cap rates is an abbreviated term for capitalisation rate. It is the key component used to value commercial property. Unlike residential property, the value of a commercial property is dependent on the rental income that a property generates (whereas residential property is driven more by the value of the underlying land). 

Therefore, to value a commercial property, you must apply a cap rate to its income. The cap rate is the amount of return that an investor demands to invest in that property. 

For example, if investors demand 5% income return from property and a particular property generates $100k of net rental income per year, then its technical value is $2 million (being $100k divided by the cap rate of 5%). 

Cap rates are influenced by several factors, but the main influencer is the levels of income offered by alternative investment asset classes. For example, if term deposits (which are risk-free) are paying 4.5% p.a., then you probably want circa 6.5% p.a. or more to invest in commercial property, to be compensated for the higher risk. 

When interest rates were very low (only 18 months ago), investors were searching for assets that paid higher income, such as commercial property. Investors were prepared to accept lower income returns from commercial property. Last year, cap rates in Melbourne and Sydney typically ranged between 4.25% and 5.50% for office property. 

However, now that you can earn more than 6% from investing in a big-4-bank bond (which is virtually risk free), commercial property cap rates must increase.  

Using the example above (i.e., commercial property worth $2 million on a 5% cap rate), if we assume the market cap rate rises to 7%, the same com

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> All investment asset classes move in cycles. Investment returns are almost never linear. As such, investors must expect good and bad periods, which is why patience and discipline are big contributors to an investor’s success. 

I suspect that commercial property investors’ patience and discipline are about to be tested. This asset class is facing a lot of challenges. However, as they say, every cloud has a silver lining so there could be good investment opportunities over the coming months and years. 

What challenges is commercial property facing? 

Commercial property was the asset class that was the most adversely impacted by Covid lockdowns, especially the retail and office sectors. 

Commercial property landlords had to provide rent waivers and reductions to retail tenants to help them through lockdown periods. But, unfortunately, not all retail businesses survived which increased vacancy rates. 

Employees were also encouraged to work from home for long periods of time. This experience demonstrated that people did not necessarily need to be in the office full-time. As such, most of the office workforce has adopted a hybrid work model that involves working from home 2 to 3 days per week. The consequence of this is that large employers have reduced their commercial office footprint. In addition, businesses have been less inclined to commit to new leases until they can ascertain what long-term working arrangements may look like. 

The upshot of this is that tenant demand for office and retail property is very low at the moment.  

That said, things are changing - albeit slowly. More employers are demanding that their workforce spend more time in the office. nab is probably the largest corporate leading this charge demanding all senior managers work from the office 5-days per week. I expect other large corporates to follow, especially if the unemployment rate normalises (it’s currently 3.5% - the normal level is circa 5%). 

But the real problem is cap rates!

Cap rates is an abbreviated term for capitalisation rate. It is the key component used to value commercial property. Unlike residential property, the value of a commercial property is dependent on the rental income that a property generates (whereas residential property is driven more by the value of the underlying land). 

Therefore, to value a commercial property, you must apply a cap rate to its income. The cap rate is the amount of return that an investor demands to invest in that property. 

For example, if investors demand 5% income return from property and a particular property generates $100k of net rental income per year, then its technical value is $2 million (being $100k divided by the cap rate of 5%). 

Cap rates are influenced by several factors, but the main influencer is the levels of income offered by alternative investment asset classes. For example, if term deposits (which are risk-free) are paying 4.5% p.a., then you probably want circa 6.5% p.a. or more to invest in commercial property, to be compensated for the higher risk. 

When interest rates were very low (only 18 months ago), investors were searching for assets that paid higher income, such as commercial property. Investors were prepared to accept lower income returns from commercial property. Last year, cap rates in Melbourne and Sydney typically ranged between 4.25% and 5.50% for office property. 

However, now that you can earn more than 6% from investing in a big-4-bank bond (which is virtually risk free), commercial property cap rates must increase.  

Using the example above (i.e., commercial property worth $2 million on a 5% cap rate), if we assume the market cap rate rises to 7%, the same com

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-12891718 Wed, 24 May 2023 07:00:00 +1000 1092 258 full false What is more tax-effective, investing in property or shares? What is more tax-effective, investing in property or shares? Many people are attracted to borrowing to invest in property because of negative gearing tax benefits. That is, the (income) loss that an investment property generates helps reduce the amount of tax you pay on your salary or business income.  

However, investing in shares also offers unique tax advantages. 

I thought it would be interesting to quantify and compare the taxation outcomes of these two investment options. 

Taxation of share market investments

Investing in shares can result in some attractive tax outcomes.  

Tax credits 

Australia’s imputation system, which was introduced by the Hawke-Keating government in 1987, is unique to Australia. It seeks to avoid the double taxation of corporate profits. It does that by giving shareholders a credit (called franking credit) for the tax that the company has paid. 

For example, if a listed company makes a net profit of $100, it will pay tax at the flat rate of 30%, so its profit after tax is $70. If it pays the profit out as a dividend to shareholders, the shareholders will receive $70 in cash and a franking credit of $30. 

Therefore, if the shareholder has no other taxable income, when they lodge their personal tax return, the $30 franking credits will be refunded, meaning that shareholder has received $100 in total (being $70 dividend plus $30 tax refund). 

Therefore, investing in Australian shares which pay franked dividends is particularly attractive to taxpayers that have low tax rates such as super funds, family trusts that have adult beneficiaries with low taxable incomes, and so forth. 

Even if you are on the highest marginal income tax rate, you are only going to pay 17% of tax on (fully franked) dividend income, because the company has already paid 30%. 

If you invest in international shares, and Australia has a tax treaty with the country where the shares are listed, you may be able to claim a foreign income tax offset for the tax that you have been deemed to pay in that country. Although, these credits are not nearly as generous as the Australian imputation system. 

CGT

Capital gains tax applies to share investments. If you hold shares for more than 12 months, you will be entitled to the 50% CGT discount, which means only half of the net capital gain will be included in your taxable income. 

As a rule of thumb, you can calculate your CGT liability by multiplying the net capital gain by 23.5% (being half of the top marginal tax rate including the Medicare levy; 47%). 

Perhaps the biggest advantages of investing in shares from a CGT perspective is the ability to (1) progressively sell and (2) nominate which parcel of shares you are selling. 

Selling shares progressively over multiple tax years can help minimise or even avoid crystalising a CGT liability. This benefit cannot be understated. 

Selecting which method you use to calculate your CGT liability (e.g., FIFO, LIFO, HIFO, as explained here) can also help minimise CGT liabilities. 

Share investments are very flexible which allows you (or more correctly, your holistic accountant) to proactively minimise your taxation liabilities. 

Interest and other deductions 

If you borrow to invest in shares, the interest you pay in respect to those borrowings will be tax deductible, just like it is with property. Therefore, it is possible to negatively gear share investments, although I would caution against doing so (at least not to the same extent as property), a

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Many people are attracted to borrowing to invest in property because of negative gearing tax benefits. That is, the (income) loss that an investment property generates helps reduce the amount of tax you pay on your salary or business income.  

However, investing in shares also offers unique tax advantages. 

I thought it would be interesting to quantify and compare the taxation outcomes of these two investment options. 

Taxation of share market investments

Investing in shares can result in some attractive tax outcomes.  

Tax credits 

Australia’s imputation system, which was introduced by the Hawke-Keating government in 1987, is unique to Australia. It seeks to avoid the double taxation of corporate profits. It does that by giving shareholders a credit (called franking credit) for the tax that the company has paid. 

For example, if a listed company makes a net profit of $100, it will pay tax at the flat rate of 30%, so its profit after tax is $70. If it pays the profit out as a dividend to shareholders, the shareholders will receive $70 in cash and a franking credit of $30. 

Therefore, if the shareholder has no other taxable income, when they lodge their personal tax return, the $30 franking credits will be refunded, meaning that shareholder has received $100 in total (being $70 dividend plus $30 tax refund). 

Therefore, investing in Australian shares which pay franked dividends is particularly attractive to taxpayers that have low tax rates such as super funds, family trusts that have adult beneficiaries with low taxable incomes, and so forth. 

Even if you are on the highest marginal income tax rate, you are only going to pay 17% of tax on (fully franked) dividend income, because the company has already paid 30%. 

If you invest in international shares, and Australia has a tax treaty with the country where the shares are listed, you may be able to claim a foreign income tax offset for the tax that you have been deemed to pay in that country. Although, these credits are not nearly as generous as the Australian imputation system. 

CGT

Capital gains tax applies to share investments. If you hold shares for more than 12 months, you will be entitled to the 50% CGT discount, which means only half of the net capital gain will be included in your taxable income. 

As a rule of thumb, you can calculate your CGT liability by multiplying the net capital gain by 23.5% (being half of the top marginal tax rate including the Medicare levy; 47%). 

Perhaps the biggest advantages of investing in shares from a CGT perspective is the ability to (1) progressively sell and (2) nominate which parcel of shares you are selling. 

Selling shares progressively over multiple tax years can help minimise or even avoid crystalising a CGT liability. This benefit cannot be understated. 

Selecting which method you use to calculate your CGT liability (e.g., FIFO, LIFO, HIFO, as explained here) can also help minimise CGT liabilities. 

Share investments are very flexible which allows you (or more correctly, your holistic accountant) to proactively minimise your taxation liabilities. 

Interest and other deductions 

If you borrow to invest in shares, the interest you pay in respect to those borrowings will be tax deductible, just like it is with property. Therefore, it is possible to negatively gear share investments, although I would caution against doing so (at least not to the same extent as property), a

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-12842868 Wed, 17 May 2023 07:00:00 +1000 1060 257 full false Tips on how to maximise your borrowing capacity Tips on how to maximise your borrowing capacity Borrowing capacity has reduced by around 30% over the past year due to the impact of higher interest rates and the increased 3% interest rate buffer that banks must use to calculate your borrowing capacity. This was eloquently depicted in this chart by CBA in February 2023. 

I wanted to explore the common strategies that people can use to safely maximise their borrowing capacity. 

How to borrow safely

I’ve written several times that building wealth is a marathon not a sprint. Whilst it is good to avoid procrastinating and invest as much as possible, you should never take high risks. 

When borrowing, it’s wise to plan for the worst but hope for the best. Look closely at your spending habits to ascertain how much you need to maintain a standard of living. Don’t rely (completely) on variable income such as bonuses. Test your ability to repay at higher interest rates – even if you think they are unlikely. And ensure you have adequate buffers in place to help you navigate any unforeseen changes in circumstances. 

As a rule of thumb, if you are borrowing more than 6 to 8 times your total gross annual income, be careful. It could be a sign that you are borrowing too much. Consider the risks. You must have an exit strategy that you can implement if everything goes pear-shaped. 

In my experience, it is unnecessary to borrow a huge amount to achieve your goals. People that do accumulate a lot of debt (i.e., what I would consider to be too much) usually do it because they are investing in the wrong properties. Property investing is a game of quality, not quantity. I would rather own one awesome, investment-grade property and have $1.5m of debt than a portfolio of 10 properties with $5.6 million of debt (I’m using an actual example of a portfolio that I saw recently). The former scenario will generate a lot higher risk-adjusted return over the next 20 to 30 years. 

My overarching point is, be careful. Don’t overborrow. 

Having said that, it is helpful to know what steps you can take to preserve and maximise your borrowing capacity. Here’s a few tips. 

Consider using a charge card instead of a credit card 

After many years (decades) of actively investing and using different banks, my wife and I ended up accumulating 7 credit cards! Notwithstanding that, they all charge an annual fee which is a waste of money, the aggregate credit limit was 6 figures! 

Credit card limits reduce your borrowing capacity because the bank includes approximately 4% of the credit card limit as a monthly expense (to provide for a monthly repayment should you fully utilise the card/s). So, $100,000 of total credit card limits would result in a monthly expense of $4,000 in a banks serviceability calculation, thereby reducing your ability to borrow. 

My wife and I always repaid our credit cards in full. We didn’t use them as a source of credit – merely to earn points. Therefore, a few years ago we cancelled all but one card (which we use for business expenses only) and obtained a charge card from American Express which we use for purchases, wherever possible. The advantage is that charge cards don’t have a credit limit because you must repay the full balance each month. So, they don’t impact your borrowing capacity. 

Therefore, consider cancelling your credit cards to maximise your borrowing capacity. 

If you earn variable income, be careful changing jobs 

Many employees have a variable component as part of their overall remuneration package e.g., income that is contingent upon personal and/or company performance such as

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Borrowing capacity has reduced by around 30% over the past year due to the impact of higher interest rates and the increased 3% interest rate buffer that banks must use to calculate your borrowing capacity. This was eloquently depicted in this chart by CBA in February 2023. 

I wanted to explore the common strategies that people can use to safely maximise their borrowing capacity. 

How to borrow safely

I’ve written several times that building wealth is a marathon not a sprint. Whilst it is good to avoid procrastinating and invest as much as possible, you should never take high risks. 

When borrowing, it’s wise to plan for the worst but hope for the best. Look closely at your spending habits to ascertain how much you need to maintain a standard of living. Don’t rely (completely) on variable income such as bonuses. Test your ability to repay at higher interest rates – even if you think they are unlikely. And ensure you have adequate buffers in place to help you navigate any unforeseen changes in circumstances. 

As a rule of thumb, if you are borrowing more than 6 to 8 times your total gross annual income, be careful. It could be a sign that you are borrowing too much. Consider the risks. You must have an exit strategy that you can implement if everything goes pear-shaped. 

In my experience, it is unnecessary to borrow a huge amount to achieve your goals. People that do accumulate a lot of debt (i.e., what I would consider to be too much) usually do it because they are investing in the wrong properties. Property investing is a game of quality, not quantity. I would rather own one awesome, investment-grade property and have $1.5m of debt than a portfolio of 10 properties with $5.6 million of debt (I’m using an actual example of a portfolio that I saw recently). The former scenario will generate a lot higher risk-adjusted return over the next 20 to 30 years. 

My overarching point is, be careful. Don’t overborrow. 

Having said that, it is helpful to know what steps you can take to preserve and maximise your borrowing capacity. Here’s a few tips. 

Consider using a charge card instead of a credit card 

After many years (decades) of actively investing and using different banks, my wife and I ended up accumulating 7 credit cards! Notwithstanding that, they all charge an annual fee which is a waste of money, the aggregate credit limit was 6 figures! 

Credit card limits reduce your borrowing capacity because the bank includes approximately 4% of the credit card limit as a monthly expense (to provide for a monthly repayment should you fully utilise the card/s). So, $100,000 of total credit card limits would result in a monthly expense of $4,000 in a banks serviceability calculation, thereby reducing your ability to borrow. 

My wife and I always repaid our credit cards in full. We didn’t use them as a source of credit – merely to earn points. Therefore, a few years ago we cancelled all but one card (which we use for business expenses only) and obtained a charge card from American Express which we use for purchases, wherever possible. The advantage is that charge cards don’t have a credit limit because you must repay the full balance each month. So, they don’t impact your borrowing capacity. 

Therefore, consider cancelling your credit cards to maximise your borrowing capacity. 

If you earn variable income, be careful changing jobs 

Many employees have a variable component as part of their overall remuneration package e.g., income that is contingent upon personal and/or company performance such as

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-12709319 Wed, 10 May 2023 00:00:00 +1000 1044 256 full false Will Melbourne’s median house price exceed $2m by 2033? Will Melbourne’s median house price exceed $2m by 2033? The unrefuted trend in all investment markets is mean reversion. It means that a period of below average returns is always followed by a period of above average returns. It is my thesis that investment-grade property in Melbourne looks attractive compared to other markets and that there are several economic tailwinds that may result in the median house prices doubling over the next decade. 

The macro environment is positive for property

In short, property prices are driven by the law of supply and demand. 

Demand for property is mainly dictated by interest rate settings, unemployment, and access to borrowings (mortgage lending). 

Supply is mainly dictated by volume of new construction and consumer sentiment i.e., whether people are willing to buy and sell property. In times of higher uncertainty, most people stop transacting, as we’ve seen over the past 12 months. 

Locking in higher discounts now will mean lower future interest rates 

All the big 4 bank CEO’s have commented that the mortgage market has become the most competitive that it’s ever been in history. Banks are offering unusually high interest rate discounts and cash incentives to win and retain customers. 

This chart (recently published in the AFR) suggests that banks are not generating a high enough return on new loans due to offering significant discounts. That means these discounts probably won’t last. I expect that banks will reduce discounting over the next 6 to 12 months once most of the low fixed rate loans have expired. 

As such, there’s a window of opportunity for investors to obtain an interest rate discount of 3% (or more) off the standard variable rate. Your discount will remain in place for the life of the loan. 

The chart below sets out interest-only investment interest rates after applying a 3% discount since 2003 (when the data set began) i.e., back testing to see what impact a 3% discount would have had. The average interest rate would have been 4.2% p.a. over the past 20 years (of course, this is theoretical because you would have never received a discount of that size). I think it’s realistic to expect your average interest rate to range between 4% and 5% over the long run. You should do your calculations assuming 6% p.a., just to be safe. 

CHART

We need more investors to solve the rental crisis 

On average, borrowing capacity has reduced by around 30% over the past year due to (1) the RBA rate hikes and (2) APRA increasing the interest rate buffer that lenders use when testing your ability to repay a loan. This is depicted in the chart published by CBA in its results briefing in February 2023. 

CHART

The rental crisis has been driven by a reduction in the number of properties that are available for rent, as I discussed here. There are fewer investment properties for two main reasons being (1) a lot of investors cashed in and sold during 2020 and 2021 and (2) tightening of lending rules since 2017. 

The only way to solve the rental crisis is to increase the supply of privately owned rental properties, which is what the government will eventually have to do. They could achieve that by removing the interest rate premium that applies to investment loans (compared to home loans) and reducing the 3% interest rate serviceability buffer. 

If/when they do that, it will increase investor demand which will stimulate the market. 

High population growth and low unemployment is good for property 

Australia’s unemployment rate is only 3.5% which is a historic low. The 10-year average unemployment rate is 5.4%,

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> The unrefuted trend in all investment markets is mean reversion. It means that a period of below average returns is always followed by a period of above average returns. It is my thesis that investment-grade property in Melbourne looks attractive compared to other markets and that there are several economic tailwinds that may result in the median house prices doubling over the next decade. 

The macro environment is positive for property

In short, property prices are driven by the law of supply and demand. 

Demand for property is mainly dictated by interest rate settings, unemployment, and access to borrowings (mortgage lending). 

Supply is mainly dictated by volume of new construction and consumer sentiment i.e., whether people are willing to buy and sell property. In times of higher uncertainty, most people stop transacting, as we’ve seen over the past 12 months. 

Locking in higher discounts now will mean lower future interest rates 

All the big 4 bank CEO’s have commented that the mortgage market has become the most competitive that it’s ever been in history. Banks are offering unusually high interest rate discounts and cash incentives to win and retain customers. 

This chart (recently published in the AFR) suggests that banks are not generating a high enough return on new loans due to offering significant discounts. That means these discounts probably won’t last. I expect that banks will reduce discounting over the next 6 to 12 months once most of the low fixed rate loans have expired. 

As such, there’s a window of opportunity for investors to obtain an interest rate discount of 3% (or more) off the standard variable rate. Your discount will remain in place for the life of the loan. 

The chart below sets out interest-only investment interest rates after applying a 3% discount since 2003 (when the data set began) i.e., back testing to see what impact a 3% discount would have had. The average interest rate would have been 4.2% p.a. over the past 20 years (of course, this is theoretical because you would have never received a discount of that size). I think it’s realistic to expect your average interest rate to range between 4% and 5% over the long run. You should do your calculations assuming 6% p.a., just to be safe. 

CHART

We need more investors to solve the rental crisis 

On average, borrowing capacity has reduced by around 30% over the past year due to (1) the RBA rate hikes and (2) APRA increasing the interest rate buffer that lenders use when testing your ability to repay a loan. This is depicted in the chart published by CBA in its results briefing in February 2023. 

CHART

The rental crisis has been driven by a reduction in the number of properties that are available for rent, as I discussed here. There are fewer investment properties for two main reasons being (1) a lot of investors cashed in and sold during 2020 and 2021 and (2) tightening of lending rules since 2017. 

The only way to solve the rental crisis is to increase the supply of privately owned rental properties, which is what the government will eventually have to do. They could achieve that by removing the interest rate premium that applies to investment loans (compared to home loans) and reducing the 3% interest rate serviceability buffer. 

If/when they do that, it will increase investor demand which will stimulate the market. 

High population growth and low unemployment is good for property 

Australia’s unemployment rate is only 3.5% which is a historic low. The 10-year average unemployment rate is 5.4%,

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-12709301 Wed, 03 May 2023 07:00:00 +1000 1059 255 full false My investment philosophy is based on 4 principals. What is your investment philosophy? My investment philosophy is based on 4 principals. What is your investment philosophy? I was listening to Morgan Housel’s new podcast recently (which I highly recommend by the way), and he said something along the lines of; once you define your investment philosophy, you won’t be distracted by any noise that doesn’t align with it. 

It really resonated with me. 

Success with investing is more about avoiding mistakes than anything else. Therefore, having a clear, well-defined (evidence-based) investment philosophy will help you avoid getting distracted by any unhelpful ‘noise’, and keep you on the on the straight and narrow. 

However, if you don’t have a well-defined investment philosophy, the risk is that you’ll be easily influenced and make financial mistakes. 

I thought it might be helpful if I shared my investment philosophy which I can solidify it into four principles.  

Principal 1: Short term returns do not help you achieve long term goals 

You must align your investment decision time horizons with your goal time horizons. 

Most people have a long-term goal of enjoying a comfortable retirement. Retirement will last two to three decades, hopefully longer. Therefore, you must align your investment decision making with that time horizon. That is, ask yourself what the best investment is you can make today that will maximise your wealth in 10, 20, 30+ years from now. 

Short term returns do not create long term value. Let me share an analogy. If you operated a business, your long-term goal might be to create a sustainable and profitable business. Of course, you could reduce the price of your product for the next few weeks (offer a discount) to generate more sales this quarter. But that comes at the cost of creating long term value because it cheapens your brand and trains your customers to never pay full price. However, creating brand value might not improve this quarter’s results, but if you do it consistently, you are well on your way to deriving long term value.  

The challenge with becoming a successful investor is that good, long-term investments just take time. That means investors must have a strong tolerance for delayed gratification – forgoing some wealth today for a lot more wealth in the future. As Warren Buffett says, the market is very good at transferring wealth from impatient to the patient (paraphrasing). There are no shortcuts to generating long-term returns. You just need to be patient. 

Principal 2: You can’t build wealth if you don’t contribute 

It is very difficult to create anything out of thin air, including wealth. Most things require some contribution of time, energy, money or something else. Building wealth is no different. 

Successful wealth accumulation requires a regular contribution of cash towards growth assets. That could come in the form of servicing investment property holding costs, regular share market investing, additional super contributions and so forth. 

Put differently, if you spend all your income, it will be almost impossible for you to build wealth in the long run. That means you need to manage cash flow effectively so that you can regularly invest some of your surplus cash flow. I’ve explained how best to do that in this blog. 

To successfully build wealth you must invest on a regular basis.  

Principal 3: You can’t pick unicorns 

The thing with popular and new trends is that they often feel compelling. By definition, a popular trend benefits from wide acceptance which means a large audience ‘believes’ in the trend. It is easy to get swept up in this mo

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> I was listening to Morgan Housel’s new podcast recently (which I highly recommend by the way), and he said something along the lines of; once you define your investment philosophy, you won’t be distracted by any noise that doesn’t align with it. 

It really resonated with me. 

Success with investing is more about avoiding mistakes than anything else. Therefore, having a clear, well-defined (evidence-based) investment philosophy will help you avoid getting distracted by any unhelpful ‘noise’, and keep you on the on the straight and narrow. 

However, if you don’t have a well-defined investment philosophy, the risk is that you’ll be easily influenced and make financial mistakes. 

I thought it might be helpful if I shared my investment philosophy which I can solidify it into four principles.  

Principal 1: Short term returns do not help you achieve long term goals 

You must align your investment decision time horizons with your goal time horizons. 

Most people have a long-term goal of enjoying a comfortable retirement. Retirement will last two to three decades, hopefully longer. Therefore, you must align your investment decision making with that time horizon. That is, ask yourself what the best investment is you can make today that will maximise your wealth in 10, 20, 30+ years from now. 

Short term returns do not create long term value. Let me share an analogy. If you operated a business, your long-term goal might be to create a sustainable and profitable business. Of course, you could reduce the price of your product for the next few weeks (offer a discount) to generate more sales this quarter. But that comes at the cost of creating long term value because it cheapens your brand and trains your customers to never pay full price. However, creating brand value might not improve this quarter’s results, but if you do it consistently, you are well on your way to deriving long term value.  

The challenge with becoming a successful investor is that good, long-term investments just take time. That means investors must have a strong tolerance for delayed gratification – forgoing some wealth today for a lot more wealth in the future. As Warren Buffett says, the market is very good at transferring wealth from impatient to the patient (paraphrasing). There are no shortcuts to generating long-term returns. You just need to be patient. 

Principal 2: You can’t build wealth if you don’t contribute 

It is very difficult to create anything out of thin air, including wealth. Most things require some contribution of time, energy, money or something else. Building wealth is no different. 

Successful wealth accumulation requires a regular contribution of cash towards growth assets. That could come in the form of servicing investment property holding costs, regular share market investing, additional super contributions and so forth. 

Put differently, if you spend all your income, it will be almost impossible for you to build wealth in the long run. That means you need to manage cash flow effectively so that you can regularly invest some of your surplus cash flow. I’ve explained how best to do that in this blog. 

To successfully build wealth you must invest on a regular basis.  

Principal 3: You can’t pick unicorns 

The thing with popular and new trends is that they often feel compelling. By definition, a popular trend benefits from wide acceptance which means a large audience ‘believes’ in the trend. It is easy to get swept up in this mo

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-12709284 Wed, 26 Apr 2023 07:00:00 +1000 802 254 full false The typical life cycle of an investor The typical life cycle of an investor Most people struggle with knowing how to invest their money. Do they upgrade their home, contribute more into super, buy an investment property, invest in the share market, or something else? 

In fact, this common challenge was the reason that I decided to write my book, Investopoly. I knew that if people understood the fundamental financial planning concepts (i.e., the 8 rules outlined in Investopoly), they might be able to figure out the answer themselves. 

Whilst everyone’s situation is different, this blog sets out some common steps that people take at different stages in life. 

Starting out…

The first thing you must master, is cash flow management. Once people have their first full-time job, they must learn how to effectively manage their money to create good saving habits. I recommend paying all discretionary expenses from a separate account so that you can track your total spend every week, fortnight or month, as discussed in this blog.   

The goal with establishing good cash flow habits is twofold. Firstly, good cash flow habits will serve you very well for the rest of your life. Secondly, if you can save regularly, it proves that you have surplus cash flow which you can use to service a mortgage i.e., you are ready to buy a property. 

Once you have mastered your cash flow management, your next most important goal is to buy your first property. Buying property is the best thing to do because of the leverage it allows (i.e., borrowing). People starting out may have a decent income but few assets. Therefore, their main goal should be to accumulate a stronger asset base. Borrowing allows you to use a relatively small deposit to increase the amount you invest. It’s not about property per se, it’s all about gearing, as explained in this blog. 

If you have demonstrated that you have surplus cash flow but don’t have enough deposit, you should investigate whether you are able to use a family guarantee to allow you to get into the property market sooner. 

Before you start a family 

Typically, people in most occupations enjoy relatively regular promotions and higher incomes after they have more than 5 years of work experience. And if they are managing cash flow well, this higher income should translate to more surplus cash flow. 

The question is what to do with that additional cash flow.     

According to ABS data, more than 75% of couples ultimately choose to have children. This needs to be a considered because starting a family is expensive. Your family’s income will fall, as one or both parents stop working to look after your child and expenses are higher, particularly if you use childcare. You must plan for this in advance. 

If circumstances allow, I typically counsel clients to upgrade their property as soon as possible but certainly before starting a family. This could include retaining their existing property and converting it into an investment or selling it to crystalise the equity and reinvest that cash into a better-quality property, albeit a home.  

If they do this in advance of starting a family, it leaves them enough time to accumulate a cash buffer (savings), which they can utilise in the future. 

Whilst you have young children (starting a family) 

Building wealth whilst you have young children (babies) is almost nigh on i

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Most people struggle with knowing how to invest their money. Do they upgrade their home, contribute more into super, buy an investment property, invest in the share market, or something else? 

In fact, this common challenge was the reason that I decided to write my book, Investopoly. I knew that if people understood the fundamental financial planning concepts (i.e., the 8 rules outlined in Investopoly), they might be able to figure out the answer themselves. 

Whilst everyone’s situation is different, this blog sets out some common steps that people take at different stages in life. 

Starting out…

The first thing you must master, is cash flow management. Once people have their first full-time job, they must learn how to effectively manage their money to create good saving habits. I recommend paying all discretionary expenses from a separate account so that you can track your total spend every week, fortnight or month, as discussed in this blog.   

The goal with establishing good cash flow habits is twofold. Firstly, good cash flow habits will serve you very well for the rest of your life. Secondly, if you can save regularly, it proves that you have surplus cash flow which you can use to service a mortgage i.e., you are ready to buy a property. 

Once you have mastered your cash flow management, your next most important goal is to buy your first property. Buying property is the best thing to do because of the leverage it allows (i.e., borrowing). People starting out may have a decent income but few assets. Therefore, their main goal should be to accumulate a stronger asset base. Borrowing allows you to use a relatively small deposit to increase the amount you invest. It’s not about property per se, it’s all about gearing, as explained in this blog. 

If you have demonstrated that you have surplus cash flow but don’t have enough deposit, you should investigate whether you are able to use a family guarantee to allow you to get into the property market sooner. 

Before you start a family 

Typically, people in most occupations enjoy relatively regular promotions and higher incomes after they have more than 5 years of work experience. And if they are managing cash flow well, this higher income should translate to more surplus cash flow. 

The question is what to do with that additional cash flow.     

According to ABS data, more than 75% of couples ultimately choose to have children. This needs to be a considered because starting a family is expensive. Your family’s income will fall, as one or both parents stop working to look after your child and expenses are higher, particularly if you use childcare. You must plan for this in advance. 

If circumstances allow, I typically counsel clients to upgrade their property as soon as possible but certainly before starting a family. This could include retaining their existing property and converting it into an investment or selling it to crystalise the equity and reinvest that cash into a better-quality property, albeit a home.  

If they do this in advance of starting a family, it leaves them enough time to accumulate a cash buffer (savings), which they can utilise in the future. 

Whilst you have young children (starting a family) 

Building wealth whilst you have young children (babies) is almost nigh on i

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-12663425 Wed, 19 Apr 2023 07:00:00 +1000 1163 253 full false Property investors need to be fussier! Here's why... Property investors need to be fussier! Here's why... Every few months, there’s a story online about an investor in their 30’s that has amassed a property portfolio of 12 properties…and how you can do it too. 

Firstly, we shouldn’t be impressed by the number of properties that someone owns, as it doesn’t tell us anything about their wealth (equity). Boasting about the number of properties you own is like a business boasting about the number of employees it has. It’s often an ego trip. 

Secondly, there’s nothing impressive about borrowing huge amounts of money i.e., more than what is sensible – that is a recipe for disaster. 

The definition of successful investing is achieving the highest return for the lowest risk. There aren’t any shortcuts. Building wealth takes time. A perfect example of this is that Warren Buffett accumulated more than 96% of his wealth after his 60th birthday. 

How do people buy 10+ properties?

It might sound impressive that an investor has amassed a larger portfolio of 10+ properties in a short time, but you can’t do that without taking risks. They probably have a lot of borrowings and dealing with 10+ properties would be time consuming (e.g., administration, maintenance requests, and so on). 

There’s only two ways that someone can buy so many properties in a short space of time. Either they have a business that is generating a large amount of profit and cash flow, or they have a unethical mortgage broker or lender that has helped them borrow more than a sensible amount. Obviously, the former explanation is legitimate. But the latter is a recipe for disaster. Mortgages are wonderful servants but terrible masters. Borrow carefully. Building wealth is a marathon, not a sprint.  

Property was more affordable 40 years ago

In 1980, the median house price was only $200,000 in Melbourne and $315,000 in Sydney in today’s dollars. For example, 40 years ago, a single-fronted, investment-grade, Victorian cottage in a nice street in Prahran (blue-chip suburb in Melbourne) would have cost you about $300,000 in today’s dollars. The same property today would cost circa $1.5 million.

Of course, borrowing capacities and incomes were a lot lower back then (as I discussed in January). However, arguably an investor didn’t have to be as picky as they need to be today because they could buy 2 or 3 (or more) properties in blue-chip suburbs. However, today, most people are hard pressed to be able to afford one investment property, let alone multiple. 

These inner-city, blue-chip locations were a lot cheaper because our capital cities were so quite immature. There wasn’t as much congestion, so living close to the city wasn’t as desirable as it is today (and will be in the future). Properties located in blue-chip suburbs didn’t cost much more than ones located in the outer suburbs. A house in Prahran (an investment-grade suburb in Melbourne) cost the same as a house in Bentleigh (an outer suburb – 20km from CBD) in the early 1980’s. Obviously, the supply-demand pressures have changed a lot over the past 4 decades. The house in Prahran now costs $1-2 million more than the house in Bentleigh. 

Buying ‘any’ property might work initially 

The problem with articles glorifying an investor with a property portfolio consisting of 10+ properties is that in most situations, they have been investing for less than for 10 years. Therefore, it is likely that if they sold everything, paid selling costs, mortgages and CGT, they wouldn’t walk away with much cash – certainly not enough to retire. And the net income that the port

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Every few months, there’s a story online about an investor in their 30’s that has amassed a property portfolio of 12 properties…and how you can do it too. 

Firstly, we shouldn’t be impressed by the number of properties that someone owns, as it doesn’t tell us anything about their wealth (equity). Boasting about the number of properties you own is like a business boasting about the number of employees it has. It’s often an ego trip. 

Secondly, there’s nothing impressive about borrowing huge amounts of money i.e., more than what is sensible – that is a recipe for disaster. 

The definition of successful investing is achieving the highest return for the lowest risk. There aren’t any shortcuts. Building wealth takes time. A perfect example of this is that Warren Buffett accumulated more than 96% of his wealth after his 60th birthday. 

How do people buy 10+ properties?

It might sound impressive that an investor has amassed a larger portfolio of 10+ properties in a short time, but you can’t do that without taking risks. They probably have a lot of borrowings and dealing with 10+ properties would be time consuming (e.g., administration, maintenance requests, and so on). 

There’s only two ways that someone can buy so many properties in a short space of time. Either they have a business that is generating a large amount of profit and cash flow, or they have a unethical mortgage broker or lender that has helped them borrow more than a sensible amount. Obviously, the former explanation is legitimate. But the latter is a recipe for disaster. Mortgages are wonderful servants but terrible masters. Borrow carefully. Building wealth is a marathon, not a sprint.  

Property was more affordable 40 years ago

In 1980, the median house price was only $200,000 in Melbourne and $315,000 in Sydney in today’s dollars. For example, 40 years ago, a single-fronted, investment-grade, Victorian cottage in a nice street in Prahran (blue-chip suburb in Melbourne) would have cost you about $300,000 in today’s dollars. The same property today would cost circa $1.5 million.

Of course, borrowing capacities and incomes were a lot lower back then (as I discussed in January). However, arguably an investor didn’t have to be as picky as they need to be today because they could buy 2 or 3 (or more) properties in blue-chip suburbs. However, today, most people are hard pressed to be able to afford one investment property, let alone multiple. 

These inner-city, blue-chip locations were a lot cheaper because our capital cities were so quite immature. There wasn’t as much congestion, so living close to the city wasn’t as desirable as it is today (and will be in the future). Properties located in blue-chip suburbs didn’t cost much more than ones located in the outer suburbs. A house in Prahran (an investment-grade suburb in Melbourne) cost the same as a house in Bentleigh (an outer suburb – 20km from CBD) in the early 1980’s. Obviously, the supply-demand pressures have changed a lot over the past 4 decades. The house in Prahran now costs $1-2 million more than the house in Bentleigh. 

Buying ‘any’ property might work initially 

The problem with articles glorifying an investor with a property portfolio consisting of 10+ properties is that in most situations, they have been investing for less than for 10 years. Therefore, it is likely that if they sold everything, paid selling costs, mortgages and CGT, they wouldn’t walk away with much cash – certainly not enough to retire. And the net income that the port

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Run your own business? 

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Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-12618498 Wed, 12 Apr 2023 07:00:00 +1000 1030 252 full false Are index funds still outperforming? Are index funds still outperforming? Everything you must know before you refinance: https://www.prosolution.com.au/ebook/
===================
Share markets have been highly volatile over the past couple of years. Markets fell by circa 30% when Covid hit in March 2020 and then proceeded to boom until the end of 2021, fuelled by government stimulus and zero interest rates. However, markets fell by circa 20% in 2022 after central banks aggressively hiked rates. It’s been a wild ride. 

Arguably, these large volatility events should have made it a lot easier for active fund managers to beat the index. Share market mispricing, overreactions and volatility should create profitable opportunities for active managers. I wanted to investigate whether this was the case. 

What is an active manager?

An active manager picks a basket of stocks that they believe will generate high investment returns. Active managers can achieve that using two primary methodologies. They can try to identify undervalued stocks on the hope that their market value eventually rises to what they believe is fair value (that is called a value manager). Alternatively, they can identify companies that are likely to generate a lot of growth in the future, with less focus on whether they are fairly valued (that is called a growth manager). The truth is that there are lots of different strategies that active managers use, and it could be a combination of value and growth. 

Because active fund managers need to employ a portfolio management team, they typically charge management fees of around 1% p.a. 

What is an index fund? 

Traditionally, an index fund invests in an index of the most valuable companies. For example, A200 is the lowest-cost Australian market index fund – it charges an investment fee of only 0.04% p.a. (e.g., fee on $100k invested is only $40 p.a.). It invests in the ASX 200 index which is the most valuable 200 companies listed on the ASX. 

For example, the total value of the largest 200 companies is $2.1 trillion. BHP’s value (market capitalisation) is circa $240 billion, being approximately 11% of the total index – Australia’s most valuable company. Therefore, if you invest in A200, 11% of your money will be invested in BHP. 7.8% in CBA. 6.5% in CSL and so on. 

An index fund is simply a managed fund that invests in a very broad basket of companies. The manager uses a rules-based approach for determining which stocks are included in that basket and how much to invest in each, such as the ASX 200. Because it uses a rules-based approach, it doesn’t need to employ costly portfolio managers and as such, the fees charged by index funds are very low. 

What happened last year? 

As I said in my opening paragraph, large movements in share markets caused by one or two major external factors often create obvious investment opportunities. Theoretically, active managers should be able to exploit these opportunities to generate higher returns. Therefore, I thought it would be interesting to investigate how active managed funds performed over the 2022 calendar year. 

The table below shows that less than half of active managers beat the index in the 2022 calendar year. Only one quarter of active managers in the US and one-third of Australian managers have beaten the market over the past 3 years (i.e., the volatile covid period). 

Proportion of active funds that outperformed the index

 |   | 1 year | 3 years | 5 years | 10 years | 15 years
 | US Market | 48.92% | 25.73% | 13.49% | 8.59% | 6.60%
 | Australian Market | 42.44% | 34.68% | 18.82% | 21.78% | 16.43%

Source: SPIVA

Longer term results are even worse for a

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

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Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Everything you must know before you refinance: https://www.prosolution.com.au/ebook/
===================
Share markets have been highly volatile over the past couple of years. Markets fell by circa 30% when Covid hit in March 2020 and then proceeded to boom until the end of 2021, fuelled by government stimulus and zero interest rates. However, markets fell by circa 20% in 2022 after central banks aggressively hiked rates. It’s been a wild ride. 

Arguably, these large volatility events should have made it a lot easier for active fund managers to beat the index. Share market mispricing, overreactions and volatility should create profitable opportunities for active managers. I wanted to investigate whether this was the case. 

What is an active manager?

An active manager picks a basket of stocks that they believe will generate high investment returns. Active managers can achieve that using two primary methodologies. They can try to identify undervalued stocks on the hope that their market value eventually rises to what they believe is fair value (that is called a value manager). Alternatively, they can identify companies that are likely to generate a lot of growth in the future, with less focus on whether they are fairly valued (that is called a growth manager). The truth is that there are lots of different strategies that active managers use, and it could be a combination of value and growth. 

Because active fund managers need to employ a portfolio management team, they typically charge management fees of around 1% p.a. 

What is an index fund? 

Traditionally, an index fund invests in an index of the most valuable companies. For example, A200 is the lowest-cost Australian market index fund – it charges an investment fee of only 0.04% p.a. (e.g., fee on $100k invested is only $40 p.a.). It invests in the ASX 200 index which is the most valuable 200 companies listed on the ASX. 

For example, the total value of the largest 200 companies is $2.1 trillion. BHP’s value (market capitalisation) is circa $240 billion, being approximately 11% of the total index – Australia’s most valuable company. Therefore, if you invest in A200, 11% of your money will be invested in BHP. 7.8% in CBA. 6.5% in CSL and so on. 

An index fund is simply a managed fund that invests in a very broad basket of companies. The manager uses a rules-based approach for determining which stocks are included in that basket and how much to invest in each, such as the ASX 200. Because it uses a rules-based approach, it doesn’t need to employ costly portfolio managers and as such, the fees charged by index funds are very low. 

What happened last year? 

As I said in my opening paragraph, large movements in share markets caused by one or two major external factors often create obvious investment opportunities. Theoretically, active managers should be able to exploit these opportunities to generate higher returns. Therefore, I thought it would be interesting to investigate how active managed funds performed over the 2022 calendar year. 

The table below shows that less than half of active managers beat the index in the 2022 calendar year. Only one quarter of active managers in the US and one-third of Australian managers have beaten the market over the past 3 years (i.e., the volatile covid period). 

Proportion of active funds that outperformed the index

 |   | 1 year | 3 years | 5 years | 10 years | 15 years
 | US Market | 48.92% | 25.73% | 13.49% | 8.59% | 6.60%
 | Australian Market | 42.44% | 34.68% | 18.82% | 21.78% | 16.43%

Source: SPIVA

Longer term results are even worse for a

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-12575144 Wed, 05 Apr 2023 07:00:00 +1000 1141 251 full false How to buy the highest quality property within your budget How to buy the highest quality property within your budget Typically, you need a budget of circa $1.5 million to purchase an investment grade house (investment property) in Melbourne, less in Brisbane, and a lot more than $1.5 million in Sydney. Of course, not everyone can afford this budget, so I wanted to discuss how to buy the highest quality property possible within your budget. 

This blog will still be useful even if you do have a budget of $1.5+ million, as it will help you understand what “investment-grade” property means. 

What makes a property investable?

Regular readers of this blog will know that I always adopt an evidence-based approach when making investment decisions. An evidence-based approach typically means adopting a rule-based approach. That is, apply a set of objective rules to identify the asset/s that are most likely to generate the future investment returns that you desire. 

The rules-based approach for investing in residential property involves ensuring a property has three important attributes. Properties that have these three attributes are typically considered investment-grade. 

Attribute 1: A persistent imbalance between supply and demand 

‘Supply and demand’ is a basic economic concept that explains how many investments work. 

The goal with investing is to invest in assets that will generate good returns over very long periods of time. For example, an 8% p.a. return means your investment will be worth 10x in 30 years. Obviously, a 10x return will help you generate a huge amount of wealth. 

The most likely way to generate strong capital growth over very long periods of time is to invest in properties that are in finite supply and benefit from growing and excessive demand. When the number of buyers exceeds sellers, prices will rise. 

Finite supply means that there is no vacant land within close proximity, which is why well-established, blue-chip suburbs are typically great locations to invest in. A dwelling’s attributes can increase a property’s scarcity too. For example, no one is building art-deco properties anymore. Apartments blocks constructed in the 1960’s that only include 6 apartments are also very scarce – developers would probably build 20+ apartments on these blocks today.  

Excessive demand can be achieved by investing in property that the wealthiest 20% of Australians desire, as their incomes and wealth position (and future inheritances) will assist in pushing property prices perpetually higher, for the reasons that I have previously explained here. 

It is also very important that a property appeals to a variety of buyers such as families, professional couples, upgraders, downgrades, investors and so on. You must not invest in an asset that only appeals to one type of buyer. This will ensure demand remains consistently high.  

Attribute 2: Evidence of past growth  

There’s a common disclaimer used in financial services; past performance is not a reliable indicator of future performance. Whilst that might be true for some asset classes and investments, often past performance can be reliable indicator when analysing residential property. The reason for that is that the factors that have driven prices higher in the past tend to be static and factual, which means they will be responsible for driving future growth. 

Static means that the positive attributes that make a property desirable tend to remain unchanged for many decades. For example, a property’s proximity to (private) schools, arterial roads, shopping strips, entertainmen

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Typically, you need a budget of circa $1.5 million to purchase an investment grade house (investment property) in Melbourne, less in Brisbane, and a lot more than $1.5 million in Sydney. Of course, not everyone can afford this budget, so I wanted to discuss how to buy the highest quality property possible within your budget. 

This blog will still be useful even if you do have a budget of $1.5+ million, as it will help you understand what “investment-grade” property means. 

What makes a property investable?

Regular readers of this blog will know that I always adopt an evidence-based approach when making investment decisions. An evidence-based approach typically means adopting a rule-based approach. That is, apply a set of objective rules to identify the asset/s that are most likely to generate the future investment returns that you desire. 

The rules-based approach for investing in residential property involves ensuring a property has three important attributes. Properties that have these three attributes are typically considered investment-grade. 

Attribute 1: A persistent imbalance between supply and demand 

‘Supply and demand’ is a basic economic concept that explains how many investments work. 

The goal with investing is to invest in assets that will generate good returns over very long periods of time. For example, an 8% p.a. return means your investment will be worth 10x in 30 years. Obviously, a 10x return will help you generate a huge amount of wealth. 

The most likely way to generate strong capital growth over very long periods of time is to invest in properties that are in finite supply and benefit from growing and excessive demand. When the number of buyers exceeds sellers, prices will rise. 

Finite supply means that there is no vacant land within close proximity, which is why well-established, blue-chip suburbs are typically great locations to invest in. A dwelling’s attributes can increase a property’s scarcity too. For example, no one is building art-deco properties anymore. Apartments blocks constructed in the 1960’s that only include 6 apartments are also very scarce – developers would probably build 20+ apartments on these blocks today.  

Excessive demand can be achieved by investing in property that the wealthiest 20% of Australians desire, as their incomes and wealth position (and future inheritances) will assist in pushing property prices perpetually higher, for the reasons that I have previously explained here. 

It is also very important that a property appeals to a variety of buyers such as families, professional couples, upgraders, downgrades, investors and so on. You must not invest in an asset that only appeals to one type of buyer. This will ensure demand remains consistently high.  

Attribute 2: Evidence of past growth  

There’s a common disclaimer used in financial services; past performance is not a reliable indicator of future performance. Whilst that might be true for some asset classes and investments, often past performance can be reliable indicator when analysing residential property. The reason for that is that the factors that have driven prices higher in the past tend to be static and factual, which means they will be responsible for driving future growth. 

Static means that the positive attributes that make a property desirable tend to remain unchanged for many decades. For example, a property’s proximity to (private) schools, arterial roads, shopping strips, entertainmen

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-12521153 Wed, 29 Mar 2023 07:00:00 +1100 1533 250 full false A recession in the US will crash stock markets! What to do before that happens A recession in the US will crash stock markets! What to do before that happens eBook Download: https://www.prosolution.com.au/ebook/

We are all aware that central banks around the world have been hiking interest rates to reduce inflation back to normal levels. The US economy, and particularly the labour market, have been more resilient than most expected. This means the US central bank might have to hike interest rates higher than in other jurisdictions to tame inflation. A consequence of this is that it will probably send the US economy into recession. And if history repeats itself, stock markets will fall. 

If this scenario plays out, what actions should you take now?  

There are three economic scenarios

Share markets have been wrestling with three possible economic scenarios as follows: 

§  Hard landing: this means that the Federal Reserve’s interest rate hikes achieve their aim of curtailing inflation but at the cost of sending the US economy into recession.    

§  Soft landing: this is a Goldilocks scenario where the Federal Reserve hikes rates just enough to cool inflation, but not too high that it causes a recession (or it is able to cut rates in time to avoid a recession). 

§  No landing: it is possible that the US economy continues to be resilient, and inflation remains stubbornly high which means the Federal Reserve must hike rates higher for longer.

US labour market is stubbornly robust 

The problem that the US central bank has (that the RBA doesn’t) is wage inflation is high at 4.6% over the year ended 28 February 2023. If it cannot cool the labour market and stop incomes rising, it probably won’t be able to return inflation to normal levels. The US labour market is proving to be very robust and although there are some signs that it is starting to slow, data is somewhat mixed. 

As reported late last week, the US unemployment rate did rise in February from 3.4% to 3.6% p.a., not because there were fewer jobs but because the participation rate increased (i.e., more people are attracted to return to the labour market and look for jobs). This helped the three-month annualised wage inflation rate slow to 3.6% (compared to the 12-month reading at 4.6%), so there are signs that wage growth is slowing. 

This is the most important issue that markets are watching. If we see more data that confirms wage inflation is slowing, a soft-landing scenario might be considered more likely. 

The other noteworthy difference in the US (compared to Australia) is that most mortgages (home loans) are fixed for 30 years, so it takes longer for higher (variable) interest rates to cool consumer demand.  

What happens to equity markets in a recession?

Most analysts would agree that the US stock market has not priced in a recession. Equity valuations are still relatively high by historical standards with the S&P 500 price-earnings ratio trading at circa 20 times compared to the long-term average of 16. 

Share market valuations have not yet adjusted to reflect higher interest rates. Given you can earn more than 6% p.a. on very safe assets such as investment-grade bonds issued by the big 4 banks, riskier asset classes (like shares) must provide much higher returns to compensate you for the higher risk you take. This is called the Equity Risk Premium. Most investors would expect to earn 5% to 5.5% over the risk-free rate (usually the 10-year government bond rate is used as a proxy for the risk-free rate). Given the Australian government bond rate is circa 3.5% p.a., investors need to earn 9.5%-10.0% p.a. for shares to be attractive investments. Based on Research Affiliates model, 10-year future US equity returns are likely to range between 3.1% and 7.9% p.a. That is not enough to compensate you for the risk. So, prices must

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> eBook Download: https://www.prosolution.com.au/ebook/

We are all aware that central banks around the world have been hiking interest rates to reduce inflation back to normal levels. The US economy, and particularly the labour market, have been more resilient than most expected. This means the US central bank might have to hike interest rates higher than in other jurisdictions to tame inflation. A consequence of this is that it will probably send the US economy into recession. And if history repeats itself, stock markets will fall. 

If this scenario plays out, what actions should you take now?  

There are three economic scenarios

Share markets have been wrestling with three possible economic scenarios as follows: 

§  Hard landing: this means that the Federal Reserve’s interest rate hikes achieve their aim of curtailing inflation but at the cost of sending the US economy into recession.    

§  Soft landing: this is a Goldilocks scenario where the Federal Reserve hikes rates just enough to cool inflation, but not too high that it causes a recession (or it is able to cut rates in time to avoid a recession). 

§  No landing: it is possible that the US economy continues to be resilient, and inflation remains stubbornly high which means the Federal Reserve must hike rates higher for longer.

US labour market is stubbornly robust 

The problem that the US central bank has (that the RBA doesn’t) is wage inflation is high at 4.6% over the year ended 28 February 2023. If it cannot cool the labour market and stop incomes rising, it probably won’t be able to return inflation to normal levels. The US labour market is proving to be very robust and although there are some signs that it is starting to slow, data is somewhat mixed. 

As reported late last week, the US unemployment rate did rise in February from 3.4% to 3.6% p.a., not because there were fewer jobs but because the participation rate increased (i.e., more people are attracted to return to the labour market and look for jobs). This helped the three-month annualised wage inflation rate slow to 3.6% (compared to the 12-month reading at 4.6%), so there are signs that wage growth is slowing. 

This is the most important issue that markets are watching. If we see more data that confirms wage inflation is slowing, a soft-landing scenario might be considered more likely. 

The other noteworthy difference in the US (compared to Australia) is that most mortgages (home loans) are fixed for 30 years, so it takes longer for higher (variable) interest rates to cool consumer demand.  

What happens to equity markets in a recession?

Most analysts would agree that the US stock market has not priced in a recession. Equity valuations are still relatively high by historical standards with the S&P 500 price-earnings ratio trading at circa 20 times compared to the long-term average of 16. 

Share market valuations have not yet adjusted to reflect higher interest rates. Given you can earn more than 6% p.a. on very safe assets such as investment-grade bonds issued by the big 4 banks, riskier asset classes (like shares) must provide much higher returns to compensate you for the higher risk you take. This is called the Equity Risk Premium. Most investors would expect to earn 5% to 5.5% over the risk-free rate (usually the 10-year government bond rate is used as a proxy for the risk-free rate). Given the Australian government bond rate is circa 3.5% p.a., investors need to earn 9.5%-10.0% p.a. for shares to be attractive investments. Based on Research Affiliates model, 10-year future US equity returns are likely to range between 3.1% and 7.9% p.a. That is not enough to compensate you for the risk. So, prices must

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-12473322 Wed, 22 Mar 2023 07:00:00 +1100 1204 249 full false Why don't my accountant and financial advisor work together? Why don't my accountant and financial advisor work together? Ensuring your accountant collaborates with your financial advisor is important, as they will be able to discuss and workshop ideas to improve your financial position. However, in my 20+ years of experience, this collaboration almost never occurs, unless they work in the same firm. 

Theoretically, there shouldn’t be any impediments to these two professionals working together. Practically, it doesn’t happen and depending on the complexity of your situation, it could be costing you. 

Accountants and financial planners are different beasts

It is a common misconception that accounting and financial planning roles are similar. They are not. The roles are about as similar as dentist and doctors (general practitioners). 

Apart from knowledge and experience which can be vastly different, the next biggest difference is that accountants spend most of their time focusing on what happened over the past 12 months and sometimes on what might happen over the next 12 months. However, financial advisors are more focused on what will happen over the next 10+ years i.e., the medium to long term. 

This distinction is very important because the focus is habitual. That is, it’s not a natural tendency for accountants to think about what a client’s financial position might be 5 years from now. The truth is both approaches are complimentary. People would greatly benefit from both an accountants and financial advisors’ perspective. 

Be careful asking your accountant for financial advice 

It is natural to ask your accountant for financial advice. But there are a few important limitations to consider. 

Firstly, their advice will be shaped by their own experiences, which are likely to be limited, as they are not financial advisors. Accountants will often advise their clients to do what they have done for themselves such as simplistic advice like “if you are going to invest in shares, buy the big banks and miners”. But what might be appropriate for them won’t necessarily be appropriate for all their clients. 

Secondly, to give financial advice, you must be authorised under an Australian Financial Services license. Most accountants are not. Similarly, to provide tax advice you must be a Registered Tax Agent which most financial advisors are not. 

Why don’t financial advisors and accountants typically work well together? 

Of course, the reasons may be different in every situation, but I discuss some of the common reasons that I have observed over the past two decades that impede these two professionals from working together efficiently and effectively. 

Different ways of doing things 

We recently prepared some advice for a financial planning client that uses an external accountant. We recommended they structure their investment in a simple discretionary trust. The client took this advice to their accountant who recommended that they draft a customised trust at a much greater cost. We felt that this recommendation overcomplicated matters and gave rise to unnecessary costs. Consequently, the client structured the investment in personal names to avoid this complexity. The problem is that this structure provides less taxation flexibility and will probably result in a higher taxation liability in years to come. 

Unfortunately, the client is the meat in the sandwich. But of course, the clients not going to completely disregard their accountant’s advice.  

If this client was also a tax client (i.e., ProSolution acted as their financial planning and taxation advisors), what would have happened is that both our financial advisor and accountant would have vicariously debated which structure was best for the client having regard to all financial planning and taxation matters. I’m confident that the family trust recommendation would have been deemed optim

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Ensuring your accountant collaborates with your financial advisor is important, as they will be able to discuss and workshop ideas to improve your financial position. However, in my 20+ years of experience, this collaboration almost never occurs, unless they work in the same firm. 

Theoretically, there shouldn’t be any impediments to these two professionals working together. Practically, it doesn’t happen and depending on the complexity of your situation, it could be costing you. 

Accountants and financial planners are different beasts

It is a common misconception that accounting and financial planning roles are similar. They are not. The roles are about as similar as dentist and doctors (general practitioners). 

Apart from knowledge and experience which can be vastly different, the next biggest difference is that accountants spend most of their time focusing on what happened over the past 12 months and sometimes on what might happen over the next 12 months. However, financial advisors are more focused on what will happen over the next 10+ years i.e., the medium to long term. 

This distinction is very important because the focus is habitual. That is, it’s not a natural tendency for accountants to think about what a client’s financial position might be 5 years from now. The truth is both approaches are complimentary. People would greatly benefit from both an accountants and financial advisors’ perspective. 

Be careful asking your accountant for financial advice 

It is natural to ask your accountant for financial advice. But there are a few important limitations to consider. 

Firstly, their advice will be shaped by their own experiences, which are likely to be limited, as they are not financial advisors. Accountants will often advise their clients to do what they have done for themselves such as simplistic advice like “if you are going to invest in shares, buy the big banks and miners”. But what might be appropriate for them won’t necessarily be appropriate for all their clients. 

Secondly, to give financial advice, you must be authorised under an Australian Financial Services license. Most accountants are not. Similarly, to provide tax advice you must be a Registered Tax Agent which most financial advisors are not. 

Why don’t financial advisors and accountants typically work well together? 

Of course, the reasons may be different in every situation, but I discuss some of the common reasons that I have observed over the past two decades that impede these two professionals from working together efficiently and effectively. 

Different ways of doing things 

We recently prepared some advice for a financial planning client that uses an external accountant. We recommended they structure their investment in a simple discretionary trust. The client took this advice to their accountant who recommended that they draft a customised trust at a much greater cost. We felt that this recommendation overcomplicated matters and gave rise to unnecessary costs. Consequently, the client structured the investment in personal names to avoid this complexity. The problem is that this structure provides less taxation flexibility and will probably result in a higher taxation liability in years to come. 

Unfortunately, the client is the meat in the sandwich. But of course, the clients not going to completely disregard their accountant’s advice.  

If this client was also a tax client (i.e., ProSolution acted as their financial planning and taxation advisors), what would have happened is that both our financial advisor and accountant would have vicariously debated which structure was best for the client having regard to all financial planning and taxation matters. I’m confident that the family trust recommendation would have been deemed optim

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-12425820 Wed, 15 Mar 2023 07:00:00 +1100 811 248 full false Private school fees: the true cost and alternatives Private school fees: the true cost and alternatives It is stating the obvious that private school education is expensive. If you are uncertain whether you would like to send your kids to a private school, I thought it would be interesting to consider some alternatives and put the costs into perspective. 

The public versus private school decision is a very personal one influenced by many considerations, including financial. I acknowledge that many factors may be more important than financial consideration. However, in this blog I would like to focus solely on the financial implications whilst acknowledging that despite the costs and alternatives, many people will still choose to send their children to a private school. 

How much will private school fees cost in the future?

Of course, private school fees can vary significantly in different capital cities and regional centres. As an example, secondary tuition fees for many private schools in Melbourne range between $30,000 and $40,000 p.a. 

There are two noteworthy factors that must be considered. Firstly, on average, fees tend to increase at a rate that exceeds inflation. When planning for clients, we assume that fees increase at a rate of 5% p.a. As such, 10 years from now, school fees are probably likely to cost between $45,000 and $60,000. Secondly, these fees do not include additional items such as uniforms, books/computer, excursions/camps and so on. It is prudent to allow an additional 5-10% for these costs. 

The cost in today’s dollars

Assuming you have a child today and you want to send them to a private secondary school that currently costs $30,000 + 5% for other costs, I project the total cost of secondary school will be $400,000 in future dollars, or $270,000 in today’s dollars. Of course, if you have more than one child and/or send your kids to a private primary school as well as secondary, your total cost will be a multiple of $270,000.

That’s a lot of money and a big drain on your retirement savings. Let’s consider some alternatives.

Buy a home in a good public-school zone 

If you don’t have access to a good public school, you could buy a home in a good public-school zone and avoid having to pay for private school fees. According to this research by Domain, property prices can grow at a much higher rate than locations that don’t offer a highly regarded public school. 

Of course, it is going to depend on the location and school, but I do not consider it unreasonable to expect that a property’s long term growth rate could be circa 3% p.a. higher in a sort after school zone (in fact, it could be a lot more than this). 

Assuming you need to borrow an additional $1 million to buy a home in a good school zone, the principal and interest mortgage repayments will cost you approximately $68,000 p.a. (assuming an average home loan interest rate of 5.5% p.a.). Assuming you purchase this property when you first have the child, the home loan repayments will cost you $1 million in today’s dollars over the 19 years until your child finishes secondary school. But I project this outlay has helped you accumulate $3.6 million in additional equity in today’s dollars (i.e., a 3% higher growth rate), so you are miles in front financially. 

But what else could you do with that cash flow? Well, instead of borrowing $1 million to buy a home in a location that offers a good school, you could invest the $68,000 p.a. that you would have otherwise spent on home loan repayments. If you did that, net of all taxes, you would accumulate a portfolio worth $1.36 million after tax (in today’s dollars). That is still much less than your net additional equity in the home in a good school zone of over $3.6 million in today’s dollars. 

In summary, not only does buying a home in a good public-school zone help yo

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> It is stating the obvious that private school education is expensive. If you are uncertain whether you would like to send your kids to a private school, I thought it would be interesting to consider some alternatives and put the costs into perspective. 

The public versus private school decision is a very personal one influenced by many considerations, including financial. I acknowledge that many factors may be more important than financial consideration. However, in this blog I would like to focus solely on the financial implications whilst acknowledging that despite the costs and alternatives, many people will still choose to send their children to a private school. 

How much will private school fees cost in the future?

Of course, private school fees can vary significantly in different capital cities and regional centres. As an example, secondary tuition fees for many private schools in Melbourne range between $30,000 and $40,000 p.a. 

There are two noteworthy factors that must be considered. Firstly, on average, fees tend to increase at a rate that exceeds inflation. When planning for clients, we assume that fees increase at a rate of 5% p.a. As such, 10 years from now, school fees are probably likely to cost between $45,000 and $60,000. Secondly, these fees do not include additional items such as uniforms, books/computer, excursions/camps and so on. It is prudent to allow an additional 5-10% for these costs. 

The cost in today’s dollars

Assuming you have a child today and you want to send them to a private secondary school that currently costs $30,000 + 5% for other costs, I project the total cost of secondary school will be $400,000 in future dollars, or $270,000 in today’s dollars. Of course, if you have more than one child and/or send your kids to a private primary school as well as secondary, your total cost will be a multiple of $270,000.

That’s a lot of money and a big drain on your retirement savings. Let’s consider some alternatives.

Buy a home in a good public-school zone 

If you don’t have access to a good public school, you could buy a home in a good public-school zone and avoid having to pay for private school fees. According to this research by Domain, property prices can grow at a much higher rate than locations that don’t offer a highly regarded public school. 

Of course, it is going to depend on the location and school, but I do not consider it unreasonable to expect that a property’s long term growth rate could be circa 3% p.a. higher in a sort after school zone (in fact, it could be a lot more than this). 

Assuming you need to borrow an additional $1 million to buy a home in a good school zone, the principal and interest mortgage repayments will cost you approximately $68,000 p.a. (assuming an average home loan interest rate of 5.5% p.a.). Assuming you purchase this property when you first have the child, the home loan repayments will cost you $1 million in today’s dollars over the 19 years until your child finishes secondary school. But I project this outlay has helped you accumulate $3.6 million in additional equity in today’s dollars (i.e., a 3% higher growth rate), so you are miles in front financially. 

But what else could you do with that cash flow? Well, instead of borrowing $1 million to buy a home in a location that offers a good school, you could invest the $68,000 p.a. that you would have otherwise spent on home loan repayments. If you did that, net of all taxes, you would accumulate a portfolio worth $1.36 million after tax (in today’s dollars). That is still much less than your net additional equity in the home in a good school zone of over $3.6 million in today’s dollars. 

In summary, not only does buying a home in a good public-school zone help yo

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-12380579 Wed, 08 Mar 2023 07:00:00 +1100 859 247 full false Rent crisis, property prices, borrowing capacity and fundamentals – how will it affect you? Rent crisis, property prices, borrowing capacity and fundamentals – how will it affect you? It has certainly been a wild ride for property investors over the past 6 years. 

In 2017 and 2018, the banking regulator demanded banks reduce the volume of interest only loans, particularly to investors. The media called this the “interest only cliff” and predicted that many borrowers would face financial stress when loan repayments switched to principal and interest resulting is higher arrears and default rates. It didn’t. 

Then in 2018-2019, Bill Shorten (you will recall that everyone was expecting him to win the 2019 federal election) promised to ban negative gearing and increase capital gains tax which unsettled property investors. Of course, he didn’t win, and the ALP abandoned this policy. 

Of course, the Covid years (2020 and 2021) were very kind to property owners. But aggressive interest rate hikes over the second half of 2022 have ruined the party and property prices have retreated to pre-Covid levels in many locations. 

Despite a relatively volatile period, it is important to note that property fundamentals remain very robust. In fact, it is vital that investors remain solely focused on these long-term fundamentals and not get distracted by these temporary volatility events. 

Rental crisis will only get worse 

There is a shortage of rental properties in Australia and as a result, rents are rising quickly. According to Domain, the national vacancy rate was a mere 0.8% with Perth, Adelaide and Hobart essentially reporting close to zero vacancy. Melbourne and Sydney’s vacancy rate has fallen from 2.7% and 1.9% respective to only 1.0% over the year to January 2023. 

Over the 2022 calendar year, rents have risen by almost 20% nationally. Of course, these rises are coming off a lower base, due to rental reductions during Covid, but the trend is strong and doesn’t look like it will abate anytime soon. The chronic shortage of rental properties will continue to put upward pressure on rents. You should expect to see a lot of media coverage this year about the growing rental crisis. 

Tighter rental laws could be to blame… 

Tighter rental laws certainly do dissuade people from investing in property. One of the most attractive advantages of being a property investor is control – you have full control over how you use and improve the asset. Tighter rental laws (that favour tenants) reduces the amount of control investors have over their property (like the ones Victoria rolled out in 2021). They also increase the cost to run a rental property thereby reducing investment returns. 

Whilst tighter rental laws have reduced investor demand (and therefore the number of rental properties available), I think it’s only been at the margin. That said, any further regulation would most likely have a material impact on rental supply. Tenants must be protected, but a healthy rental market is equally if not more important. 

But I think the main cause of the undersupply is… 

There are fewer rental properties in Australia today because there are fewer investors buying property (owner-occupiers have dominated the market) and more investors have sold existing investment properties.

According to data by PropTrack, approximately 15% of vendors are investors (i.e., people selling their investment properties). The proportion of investors selling property increased to between 20% and 25% over the past few years during the Covid property boom. Obviously, many investors took the opportunity to cash out whilst property prices were booming during 2020 and 2021. 

For the 6 years between 20

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> It has certainly been a wild ride for property investors over the past 6 years. 

In 2017 and 2018, the banking regulator demanded banks reduce the volume of interest only loans, particularly to investors. The media called this the “interest only cliff” and predicted that many borrowers would face financial stress when loan repayments switched to principal and interest resulting is higher arrears and default rates. It didn’t. 

Then in 2018-2019, Bill Shorten (you will recall that everyone was expecting him to win the 2019 federal election) promised to ban negative gearing and increase capital gains tax which unsettled property investors. Of course, he didn’t win, and the ALP abandoned this policy. 

Of course, the Covid years (2020 and 2021) were very kind to property owners. But aggressive interest rate hikes over the second half of 2022 have ruined the party and property prices have retreated to pre-Covid levels in many locations. 

Despite a relatively volatile period, it is important to note that property fundamentals remain very robust. In fact, it is vital that investors remain solely focused on these long-term fundamentals and not get distracted by these temporary volatility events. 

Rental crisis will only get worse 

There is a shortage of rental properties in Australia and as a result, rents are rising quickly. According to Domain, the national vacancy rate was a mere 0.8% with Perth, Adelaide and Hobart essentially reporting close to zero vacancy. Melbourne and Sydney’s vacancy rate has fallen from 2.7% and 1.9% respective to only 1.0% over the year to January 2023. 

Over the 2022 calendar year, rents have risen by almost 20% nationally. Of course, these rises are coming off a lower base, due to rental reductions during Covid, but the trend is strong and doesn’t look like it will abate anytime soon. The chronic shortage of rental properties will continue to put upward pressure on rents. You should expect to see a lot of media coverage this year about the growing rental crisis. 

Tighter rental laws could be to blame… 

Tighter rental laws certainly do dissuade people from investing in property. One of the most attractive advantages of being a property investor is control – you have full control over how you use and improve the asset. Tighter rental laws (that favour tenants) reduces the amount of control investors have over their property (like the ones Victoria rolled out in 2021). They also increase the cost to run a rental property thereby reducing investment returns. 

Whilst tighter rental laws have reduced investor demand (and therefore the number of rental properties available), I think it’s only been at the margin. That said, any further regulation would most likely have a material impact on rental supply. Tenants must be protected, but a healthy rental market is equally if not more important. 

But I think the main cause of the undersupply is… 

There are fewer rental properties in Australia today because there are fewer investors buying property (owner-occupiers have dominated the market) and more investors have sold existing investment properties.

According to data by PropTrack, approximately 15% of vendors are investors (i.e., people selling their investment properties). The proportion of investors selling property increased to between 20% and 25% over the past few years during the Covid property boom. Obviously, many investors took the opportunity to cash out whilst property prices were booming during 2020 and 2021. 

For the 6 years between 20

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-12333575 Wed, 01 Mar 2023 07:00:00 +1100 1414 246 full false It’s all about gearing, not property. Without gearing, shares are better. It’s all about gearing, not property. Without gearing, shares are better. It is often debated which is a better investment, property or shares. It is my thesis that property is an okay investment, but not as good as shares. However, when you factor in gearing (the ability to borrow to invest), property becomes a wonderful investment – better than shares. 

Property versus shares

The main advantages of shares (compared to property) include: 

§  You can outsource the management of a share portfolio to an advisor. However, as a property investor, you may need to spend time to work with your managing agent to deal with tenant issues and/or property maintenance/repairs. 

§  Shares can generate a stable level of income with no (or few) related expenses. For example, the ASX200 index has yielded circa 4.5% p.a. for a long time. 

§  Shares are liquid and have low entry and exit costs e.g., no stamp duty, real estate agent fees, etc. This means you can invest and divest in small increments. 

The main advantages of property include: 

§  Most investors feel comfortable borrowing to invest in property, which means you don’t need to make a large upfront cash contribution to be able to invest. 

§  The assets tangibility can make investors feel more comfortable. 

§  You don’t need ongoing financial advice after you have purchased the property. 

§  Investment-grade property provides most of its return in capital growth in return for less income, which is tax effective. 

We can debate the pros and cons of shares and property until we are blue in the face, but I think it’s a meaningless debate. It’s like debating which golf club is better. They are all different and you need more than one club to play well. 

How do returns compare? 

My thesis is that it’s not property that makes property investing so effective. It’s the gearing that does a lot of the heavy lifting. Therefore, an investors decision is not whether to invest in property or shares. Their decision is whether to borrow to invest or not. If it is appropriate to borrow, and they can do so safely, then borrowing to invest in property will likely generate the highest return.  

I financially modelled borrowing to invest in a property, holding the property for 25 years, and selling it to realise the cash proceeds after repaying the loan and paying for capital gains tax (my assumptions are in the footnote[1]). Whilst the investor doesn’t need to make a cash contribution (as they borrow the entire cost of the property), they do have to pay for the holding costs i.e., shortfall between net rental income and mortgage interest. The internal rate of return calculates what return you generate from paying for these holding costs in return for making a capital gain in 25 years’ time. I calculated the internal rate of return to be 13.96% p.a. which is very attractive (see chart below). 

How much does gearing help? 

The return from borrowing to invest in property is so high because of the impact of gearing. That is, an investors cash contribution (i.e., holding costs) is relatively small compared to the capital gains, after tax. If I eliminated the impact of gearing, the investors internal rate of return falls to 7.41% p.a., because the investor must contribute a huge sum of cash at the beginning. Therefore, gearing adds 6.55% towards the total return as depicted below. 

CHART

If we compare that to investing in shares i.e., invest over $1m into the share market in one hit, hold it for 25 years and then sell the whole portfolio, the investors internal rate of return would be 10.29% p.a., which is much better (almost 3% p.a.) than an ungeared property investment. 

How

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> It is often debated which is a better investment, property or shares. It is my thesis that property is an okay investment, but not as good as shares. However, when you factor in gearing (the ability to borrow to invest), property becomes a wonderful investment – better than shares. 

Property versus shares

The main advantages of shares (compared to property) include: 

§  You can outsource the management of a share portfolio to an advisor. However, as a property investor, you may need to spend time to work with your managing agent to deal with tenant issues and/or property maintenance/repairs. 

§  Shares can generate a stable level of income with no (or few) related expenses. For example, the ASX200 index has yielded circa 4.5% p.a. for a long time. 

§  Shares are liquid and have low entry and exit costs e.g., no stamp duty, real estate agent fees, etc. This means you can invest and divest in small increments. 

The main advantages of property include: 

§  Most investors feel comfortable borrowing to invest in property, which means you don’t need to make a large upfront cash contribution to be able to invest. 

§  The assets tangibility can make investors feel more comfortable. 

§  You don’t need ongoing financial advice after you have purchased the property. 

§  Investment-grade property provides most of its return in capital growth in return for less income, which is tax effective. 

We can debate the pros and cons of shares and property until we are blue in the face, but I think it’s a meaningless debate. It’s like debating which golf club is better. They are all different and you need more than one club to play well. 

How do returns compare? 

My thesis is that it’s not property that makes property investing so effective. It’s the gearing that does a lot of the heavy lifting. Therefore, an investors decision is not whether to invest in property or shares. Their decision is whether to borrow to invest or not. If it is appropriate to borrow, and they can do so safely, then borrowing to invest in property will likely generate the highest return.  

I financially modelled borrowing to invest in a property, holding the property for 25 years, and selling it to realise the cash proceeds after repaying the loan and paying for capital gains tax (my assumptions are in the footnote[1]). Whilst the investor doesn’t need to make a cash contribution (as they borrow the entire cost of the property), they do have to pay for the holding costs i.e., shortfall between net rental income and mortgage interest. The internal rate of return calculates what return you generate from paying for these holding costs in return for making a capital gain in 25 years’ time. I calculated the internal rate of return to be 13.96% p.a. which is very attractive (see chart below). 

How much does gearing help? 

The return from borrowing to invest in property is so high because of the impact of gearing. That is, an investors cash contribution (i.e., holding costs) is relatively small compared to the capital gains, after tax. If I eliminated the impact of gearing, the investors internal rate of return falls to 7.41% p.a., because the investor must contribute a huge sum of cash at the beginning. Therefore, gearing adds 6.55% towards the total return as depicted below. 

CHART

If we compare that to investing in shares i.e., invest over $1m into the share market in one hit, hold it for 25 years and then sell the whole portfolio, the investors internal rate of return would be 10.29% p.a., which is much better (almost 3% p.a.) than an ungeared property investment. 

How

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-12285997 Wed, 22 Feb 2023 07:00:00 +1100 931 245 full false Why value investing will deliver higher returns with lower risk Why value investing will deliver higher returns with lower risk I’m a big advocate of value investing. If you buy high a quality investment for fair price and hold it for the long run, you can’t help but make a lot of money. But if you can buy the same quality asset cheaply (below its intrinsic value), then it’s likely that you will make even more money. This is what value investors attempt to do.  

You can adopt a value investing approach with many asset classes, which I’ll discuss later. However, for most of this blog, I’ll use shares as an example because there’s a lot more data available. 

How does value investing reduce your risk?

When investing in an asset, you can derive an investment return in two ways; by receiving income and/or the value of the asset appreciates i.e., capital growth. Often, assets provide a combination of both income plus growth. 

Receiving income is less risky because you ‘bank’ the return each year. That is, you are less reliant on capital growth to generate an acceptable overall return. 

Your capital return will depend on two factors. Firstly, what you paid for the asset (to purchase it). And secondly, the assets future value. Of course, overpaying for the asset initially will diminish future capital returns. Overpaying slightly for a high-quality asset probably won’t have a material impact on future returns, as a quality assets growth with quickly make up for any small overpayment. But a material overpayment and/or buying a poor-quality asset is a big problem that will cost you dearly.  

Conversely, if you buy a quality asset for a cheap price, you are less reliant on the overall market organically driving prices higher to generate quality returns. In fact, in this situation, your future capital growth will come from two sources: the appreciation to fair market value, plus organic growth. 

A quick history lesson… 

The chart below compares how value has performed compared to growth in the US share market since 1979 (using the Russell 1000 indexes). They have performed similarly over the long run i.e., growth has returned 11.3% p.a. and value 11.6% p.a. However, recent performance has been a lot different. Between 2018 and 2021, growth substantially outperformed value as it returned 24.1% p.a. versus 10.5%. Consequently, by historic standards, value is now relatively cheap.  

CHART

Why do I think value is likely to outperform over the medium term?

There are two predominant reasons that I think a value approach/methodology is likely to deliver above average returns over the medium term (5 to 10 years). 

Firstly, mean reversion is likely to continue to drive higher returns. This has already started to happen. Value outperformed growth by more than 21% in 2022. History suggests that growth will continue to struggle especially since growth has been dominated by only a handful of mega-cap stocks (Apple, Microsoft, Google, Amazon, etc.). This empirical research indicates that mega-cap stocks rarely continue to outperform forever – their performance eventually lags. If history is any guide, it is likely that most of these mega-cap stocks won’t be in the top 10 most valuable companies a few decades from now. 

Secondly, a higher interest rate and inflation environment is more challenging for growth stocks. It is not uncommon for growth stocks to burn through cash because they are investing in their business (not always wisely) to generate more growth. In fact, it’s entirely possible (or likely) that growth companies are not profitable. Therefore, they need an endless source of money (debt and/or equi

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> I’m a big advocate of value investing. If you buy high a quality investment for fair price and hold it for the long run, you can’t help but make a lot of money. But if you can buy the same quality asset cheaply (below its intrinsic value), then it’s likely that you will make even more money. This is what value investors attempt to do.  

You can adopt a value investing approach with many asset classes, which I’ll discuss later. However, for most of this blog, I’ll use shares as an example because there’s a lot more data available. 

How does value investing reduce your risk?

When investing in an asset, you can derive an investment return in two ways; by receiving income and/or the value of the asset appreciates i.e., capital growth. Often, assets provide a combination of both income plus growth. 

Receiving income is less risky because you ‘bank’ the return each year. That is, you are less reliant on capital growth to generate an acceptable overall return. 

Your capital return will depend on two factors. Firstly, what you paid for the asset (to purchase it). And secondly, the assets future value. Of course, overpaying for the asset initially will diminish future capital returns. Overpaying slightly for a high-quality asset probably won’t have a material impact on future returns, as a quality assets growth with quickly make up for any small overpayment. But a material overpayment and/or buying a poor-quality asset is a big problem that will cost you dearly.  

Conversely, if you buy a quality asset for a cheap price, you are less reliant on the overall market organically driving prices higher to generate quality returns. In fact, in this situation, your future capital growth will come from two sources: the appreciation to fair market value, plus organic growth. 

A quick history lesson… 

The chart below compares how value has performed compared to growth in the US share market since 1979 (using the Russell 1000 indexes). They have performed similarly over the long run i.e., growth has returned 11.3% p.a. and value 11.6% p.a. However, recent performance has been a lot different. Between 2018 and 2021, growth substantially outperformed value as it returned 24.1% p.a. versus 10.5%. Consequently, by historic standards, value is now relatively cheap.  

CHART

Why do I think value is likely to outperform over the medium term?

There are two predominant reasons that I think a value approach/methodology is likely to deliver above average returns over the medium term (5 to 10 years). 

Firstly, mean reversion is likely to continue to drive higher returns. This has already started to happen. Value outperformed growth by more than 21% in 2022. History suggests that growth will continue to struggle especially since growth has been dominated by only a handful of mega-cap stocks (Apple, Microsoft, Google, Amazon, etc.). This empirical research indicates that mega-cap stocks rarely continue to outperform forever – their performance eventually lags. If history is any guide, it is likely that most of these mega-cap stocks won’t be in the top 10 most valuable companies a few decades from now. 

Secondly, a higher interest rate and inflation environment is more challenging for growth stocks. It is not uncommon for growth stocks to burn through cash because they are investing in their business (not always wisely) to generate more growth. In fact, it’s entirely possible (or likely) that growth companies are not profitable. Therefore, they need an endless source of money (debt and/or equi

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-12238907 Wed, 15 Feb 2023 07:00:00 +1100 1060 244 full false What to do if your fixed rate or interest only term is due to expire in 2023 What to do if your fixed rate or interest only term is due to expire in 2023 It has been very well reported that many mortgage holders will soon be paying much higher interest rates when their fixed rate terms expire. It is estimated that $478 billion worth of fixed rate mortgages are due to expire in 2023. 

In addition, borrowers may also have to navigate the end of an interest only term, which typically apply to investment loans. 

This blog sets out our advice on how to navigate these changes. 

What are your options?  

Fixed rate expiry 

If your fixed rate is maturing, you have two options. You can re-fix your interest rate for another term or allow the interest rate to roll over onto a variable rate. 

Current fixed rates range between 5.39% and 6.10% p.a. for owner-occupiers and 5.69% to 6.70% p.a. for investors (terms between 2 and 5 years). Variable interest rates range between 4.75% to 4.90% p.a. for owner-occupiers and 5.30% to 5.50% p.a. for investors on interest only repayments. As such, fixed rates don’t look attractive for a couple of reasons.

Firstly, it is very likely that we are at or close to the top of the interest rate cycle. So, there’s limited value in paying a premium (i.e., a higher interest rate) to protect yourself against potentially higher interest rates in the future. 

This chart shows that the interest rate yield curve over 5 years is relatively flat i.e., it implies that RBA’s cash rate won’t change much over the next 5 years. Fixed rates may become attractive again when/if the yield curve inverts because it reduces the banks term borrowing costs and allows them to offer more attractive fixed rates. Until that happens, we typically recommend rolling over onto a variable interest rate. 

Interest only term expiry 

Navigating an interest only term expiry is not always straightforward. Usually, all mortgages have 30-year terms. If you elect to initially repay interest only, your loan term typically consists of a 5-year interest only term plus a 25-year principal and interest term. Contractually, the bank doesn’t have to offer you another interest only term – they can insist that you repay principal and interest for the remainder of the loan term. You have two options; request another interest only term or agree to repaying principal and interest. 

There are two common matters you should consider being (1) cash flow and (2) interest rates. 

The advantage of repaying interest only is that you minimise your monthly commitment. You might want to do that either because you want to divert cash flow elsewhere such as repaying your (non-tax-deductible) home loan or so that you can take advantage of an offset account, as explained here. 

The downside to interest only loans is that they attract higher interest rates. In 2017, the banks began charging higher interest rates for interest only loans to dissuade borrowers from requesting them (at the time the banking regulator was concerned that 40% of new loans were interest only). Interest-only loans attract a higher interest rate of 0.26% p.a. (on average) compared to principal and interest investment loans (or a 0.55% p.a. premium for interest only home loans) – that is the premium you pay during the interest only loan term. 

Consider your whole portfolio: some questions to ask yourself 

We suggest reviewing your whole mortgage portfolio at one time instead of reviewing loans individually. Doing so ensures that you achieve the best overall outcomes.  

When reviewing your loan portfolio, it is wise to consider a few matters such as: 

§  Will your borrowing capacity change in the future? A c

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> It has been very well reported that many mortgage holders will soon be paying much higher interest rates when their fixed rate terms expire. It is estimated that $478 billion worth of fixed rate mortgages are due to expire in 2023. 

In addition, borrowers may also have to navigate the end of an interest only term, which typically apply to investment loans. 

This blog sets out our advice on how to navigate these changes. 

What are your options?  

Fixed rate expiry 

If your fixed rate is maturing, you have two options. You can re-fix your interest rate for another term or allow the interest rate to roll over onto a variable rate. 

Current fixed rates range between 5.39% and 6.10% p.a. for owner-occupiers and 5.69% to 6.70% p.a. for investors (terms between 2 and 5 years). Variable interest rates range between 4.75% to 4.90% p.a. for owner-occupiers and 5.30% to 5.50% p.a. for investors on interest only repayments. As such, fixed rates don’t look attractive for a couple of reasons.

Firstly, it is very likely that we are at or close to the top of the interest rate cycle. So, there’s limited value in paying a premium (i.e., a higher interest rate) to protect yourself against potentially higher interest rates in the future. 

This chart shows that the interest rate yield curve over 5 years is relatively flat i.e., it implies that RBA’s cash rate won’t change much over the next 5 years. Fixed rates may become attractive again when/if the yield curve inverts because it reduces the banks term borrowing costs and allows them to offer more attractive fixed rates. Until that happens, we typically recommend rolling over onto a variable interest rate. 

Interest only term expiry 

Navigating an interest only term expiry is not always straightforward. Usually, all mortgages have 30-year terms. If you elect to initially repay interest only, your loan term typically consists of a 5-year interest only term plus a 25-year principal and interest term. Contractually, the bank doesn’t have to offer you another interest only term – they can insist that you repay principal and interest for the remainder of the loan term. You have two options; request another interest only term or agree to repaying principal and interest. 

There are two common matters you should consider being (1) cash flow and (2) interest rates. 

The advantage of repaying interest only is that you minimise your monthly commitment. You might want to do that either because you want to divert cash flow elsewhere such as repaying your (non-tax-deductible) home loan or so that you can take advantage of an offset account, as explained here. 

The downside to interest only loans is that they attract higher interest rates. In 2017, the banks began charging higher interest rates for interest only loans to dissuade borrowers from requesting them (at the time the banking regulator was concerned that 40% of new loans were interest only). Interest-only loans attract a higher interest rate of 0.26% p.a. (on average) compared to principal and interest investment loans (or a 0.55% p.a. premium for interest only home loans) – that is the premium you pay during the interest only loan term. 

Consider your whole portfolio: some questions to ask yourself 

We suggest reviewing your whole mortgage portfolio at one time instead of reviewing loans individually. Doing so ensures that you achieve the best overall outcomes.  

When reviewing your loan portfolio, it is wise to consider a few matters such as: 

§  Will your borrowing capacity change in the future? A c

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-12197415 Wed, 08 Feb 2023 07:00:00 +1100 1160 243 full false Getting into the property market is easier today than 30+ years ago Getting into the property market is easier today than 30+ years ago It is often suggested that it’s a lot more difficult for people to buy their first property compared to many decades ago. It is true that property is a lot more expensive. However, I would like to suggest that in many respects, buying a property today is easier than it was many decades ago. 

I would like to start by highlighting the main advantages that property buyers enjoy today compared to many decades ago. I’ll address the affordability issues once I’ve done that. 

Abundant access to information, knowledge, strategies, advice and so forth

How do you get ahead financially? One solution is to get the best advice so that you make the most of your financial opportunities. Often people learn by trial and error, but that can be expensive and waste valuable time. You can fast track your financial success by learning the best way to use your money. 

There is an absolute abundance of information that is available on the internet. Most of it is accessible instantaneously at no cost. Blogs, forums, podcasts, books, websites, software and so on. It cannot be underestimated how valuable that is. 

I purchased my first property 25 years ago and no such information was available (the internet didn’t even exist… now I’m showing my age). There were a few books about property investing, but not many. The only way to learn about borrowing strategies was by meeting bank staff, but they weren’t particularly knowledgeable or helpful. Therefore, unless you knew a successful property investor, it was hard to access knowledge. 

Today, I can find out how best to save a deposit for a property and strategies to mitigate a low deposit. I can find out how to manufacture equity via renovations. I can learn what makes a property investment-grade. I can research specific properties and find out what they have sold for in the past i.e., historic growth rates. I can learn about borrowing strategies, how to increase borrowing capacity and a mortgage broker can compare 30+ lenders in seconds. 

As the saying goes, “knowledge is power”. 

Much higher borrowing capacity

Thirty to forty years ago, borrowing 3 times your gross income was seen as very high risk. Today, the banking regulator (APRA) classifies a high-risk borrower as anyone that borrows more than 6 times their gross income. That is, I have come across some investors that have borrowed 10+ times their income, although I would caution anyone against borrowing that much. Over-borrowing is very risky. Mortgages are a wonderful servant but a terrible master.  

Therefore, by this measure, borrowing capacity has increased by 2 to 3 times over the past few decades. 

The challenge is that there are more things to spend your money on today (you can literally buy anything in the world on the internet). That temptation didn’t exist 20-30 years ago. This means would-be property buyers must make sacrifices. If they want to buy a quality property, they’ll have to curtail their spending. You can’t always have your cake and eat it too. 

In addition, 30 years ago, it was not possible to borrow more than 80% of a property’s value. Today, owner-occupiers can borrow up to 95%. 

Higher earning capacity and more employment opportunities

The internet has made it very easy to connect with people around the world. This means people can explore a lot more job opportunities. In fact, given the increased acceptance of working from home, it is not even necessary for you to live in the same country as your employer. 

Whilst these advancements might make the job markets more competitive, for some occupations it opens (literally) a whole world of opportunities. Therefore, first-time property buyers can proactively explore many opportunities to increase their income, thereby increasing their borrowing capacity and purchasing power. <

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> It is often suggested that it’s a lot more difficult for people to buy their first property compared to many decades ago. It is true that property is a lot more expensive. However, I would like to suggest that in many respects, buying a property today is easier than it was many decades ago. 

I would like to start by highlighting the main advantages that property buyers enjoy today compared to many decades ago. I’ll address the affordability issues once I’ve done that. 

Abundant access to information, knowledge, strategies, advice and so forth

How do you get ahead financially? One solution is to get the best advice so that you make the most of your financial opportunities. Often people learn by trial and error, but that can be expensive and waste valuable time. You can fast track your financial success by learning the best way to use your money. 

There is an absolute abundance of information that is available on the internet. Most of it is accessible instantaneously at no cost. Blogs, forums, podcasts, books, websites, software and so on. It cannot be underestimated how valuable that is. 

I purchased my first property 25 years ago and no such information was available (the internet didn’t even exist… now I’m showing my age). There were a few books about property investing, but not many. The only way to learn about borrowing strategies was by meeting bank staff, but they weren’t particularly knowledgeable or helpful. Therefore, unless you knew a successful property investor, it was hard to access knowledge. 

Today, I can find out how best to save a deposit for a property and strategies to mitigate a low deposit. I can find out how to manufacture equity via renovations. I can learn what makes a property investment-grade. I can research specific properties and find out what they have sold for in the past i.e., historic growth rates. I can learn about borrowing strategies, how to increase borrowing capacity and a mortgage broker can compare 30+ lenders in seconds. 

As the saying goes, “knowledge is power”. 

Much higher borrowing capacity

Thirty to forty years ago, borrowing 3 times your gross income was seen as very high risk. Today, the banking regulator (APRA) classifies a high-risk borrower as anyone that borrows more than 6 times their gross income. That is, I have come across some investors that have borrowed 10+ times their income, although I would caution anyone against borrowing that much. Over-borrowing is very risky. Mortgages are a wonderful servant but a terrible master.  

Therefore, by this measure, borrowing capacity has increased by 2 to 3 times over the past few decades. 

The challenge is that there are more things to spend your money on today (you can literally buy anything in the world on the internet). That temptation didn’t exist 20-30 years ago. This means would-be property buyers must make sacrifices. If they want to buy a quality property, they’ll have to curtail their spending. You can’t always have your cake and eat it too. 

In addition, 30 years ago, it was not possible to borrow more than 80% of a property’s value. Today, owner-occupiers can borrow up to 95%. 

Higher earning capacity and more employment opportunities

The internet has made it very easy to connect with people around the world. This means people can explore a lot more job opportunities. In fact, given the increased acceptance of working from home, it is not even necessary for you to live in the same country as your employer. 

Whilst these advancements might make the job markets more competitive, for some occupations it opens (literally) a whole world of opportunities. Therefore, first-time property buyers can proactively explore many opportunities to increase their income, thereby increasing their borrowing capacity and purchasing power. <

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-12149679 Wed, 01 Feb 2023 07:00:00 +1100 1641 242 full false Your most important financial step for 2023 Your most important financial step for 2023 Good cash flow management is by far the most important practice that you must master to be successful at building wealth. I realise that it’s not a particularly popular topic, but bear with me, because it’s an easy thing to master if you know how. It won’t take you much time, and you will feel more empowered and in control as a result. 

You can’t expect to build wealth if you spend all your income 

Investment returns alone won’t help you build wealth, unless you already have a large investment base. You must contribute some of your own money/savings. 

For example, most people that buy an investment property fund its holding costs (i.e., the shortfall between net rental income and loan interest) from their salary/wage income. A property’s holding costs might equate to $20k-30k p.a. on an after-tax basis. Essentially, that is their capital contribution towards this investment (assuming they borrowed the full cost of the property). However, if the investor decided to fund these holding costs through drawing additional borrowings, the interest cost would compound, and greatly diminish investment returns. 

In short, you can’t build wealth without doing the hard work of making regular cash contributions into your investment portfolio. If you are not already doing that, you need to find a way to begin. Make 2023 the year you do that.  

Unconscious expenditure is the problem. You must minimise it.

Holidays are expensive. And since Covid, holidays have become even more expensive (although that might change over the next 12 to 18 months as higher interest rates temper demand). However, holidays are probably the best example of conscious expenditure. That is, we tend to think very deeply about where we want to holiday, how we get there, accommodation and so on. We carefully weigh up the cost-benefit of the expenditure. As such, holidays tend to provide a high utility per dollars spent i.e., they are good value for money. 

However, unfortunately, we do not apply the same diligent approach to all expenses, especially low dollar value expenses. In fact, for some expenses, we don’t spend any time thinking about them. Consequently, we spend money on things that have no impact on our standard of living. These expenses are a waste, as they don’t provide any benefit or enjoyment. Whilst these items tend to be lots of small dollar value items, they certainly add up over the course of a year. 

It is easy to reduce (eliminate) unconscious spending 

We don’t need to worry too much about non-discretionary expense items such as mortgage repayments, utility bills, insurance, school fees and so on. It’s virtually impossible to over-spend on these items. Of course, we must periodically review them to ensure we are getting the best deal, but other than that, we don’t need to worry about them cash flow management wise. 

It is discretionary expenses where over-spending (waste) occurs. Therefore, I recommend paying discretionary and non-discretionary expenses from two separate accounts as depicted in the diagram below. 

Diagram 

The trick is to transfer a set amount each week, fortnight or month into the discretionary expense account. Use this account to pay for all discretionary expenses e.g., groceries, eating out, clothing, etc. – essentially everything that isn’t a non-discretionary expense. This will help you track and limit discretionary spending. You will also find that (somewhat unconsciously) you will tend to become more conscious about your spending. The silver lining is that your standard of living doesn’t suffer if you eliminate an expense that never provided a

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Good cash flow management is by far the most important practice that you must master to be successful at building wealth. I realise that it’s not a particularly popular topic, but bear with me, because it’s an easy thing to master if you know how. It won’t take you much time, and you will feel more empowered and in control as a result. 

You can’t expect to build wealth if you spend all your income 

Investment returns alone won’t help you build wealth, unless you already have a large investment base. You must contribute some of your own money/savings. 

For example, most people that buy an investment property fund its holding costs (i.e., the shortfall between net rental income and loan interest) from their salary/wage income. A property’s holding costs might equate to $20k-30k p.a. on an after-tax basis. Essentially, that is their capital contribution towards this investment (assuming they borrowed the full cost of the property). However, if the investor decided to fund these holding costs through drawing additional borrowings, the interest cost would compound, and greatly diminish investment returns. 

In short, you can’t build wealth without doing the hard work of making regular cash contributions into your investment portfolio. If you are not already doing that, you need to find a way to begin. Make 2023 the year you do that.  

Unconscious expenditure is the problem. You must minimise it.

Holidays are expensive. And since Covid, holidays have become even more expensive (although that might change over the next 12 to 18 months as higher interest rates temper demand). However, holidays are probably the best example of conscious expenditure. That is, we tend to think very deeply about where we want to holiday, how we get there, accommodation and so on. We carefully weigh up the cost-benefit of the expenditure. As such, holidays tend to provide a high utility per dollars spent i.e., they are good value for money. 

However, unfortunately, we do not apply the same diligent approach to all expenses, especially low dollar value expenses. In fact, for some expenses, we don’t spend any time thinking about them. Consequently, we spend money on things that have no impact on our standard of living. These expenses are a waste, as they don’t provide any benefit or enjoyment. Whilst these items tend to be lots of small dollar value items, they certainly add up over the course of a year. 

It is easy to reduce (eliminate) unconscious spending 

We don’t need to worry too much about non-discretionary expense items such as mortgage repayments, utility bills, insurance, school fees and so on. It’s virtually impossible to over-spend on these items. Of course, we must periodically review them to ensure we are getting the best deal, but other than that, we don’t need to worry about them cash flow management wise. 

It is discretionary expenses where over-spending (waste) occurs. Therefore, I recommend paying discretionary and non-discretionary expenses from two separate accounts as depicted in the diagram below. 

Diagram 

The trick is to transfer a set amount each week, fortnight or month into the discretionary expense account. Use this account to pay for all discretionary expenses e.g., groceries, eating out, clothing, etc. – essentially everything that isn’t a non-discretionary expense. This will help you track and limit discretionary spending. You will also find that (somewhat unconsciously) you will tend to become more conscious about your spending. The silver lining is that your standard of living doesn’t suffer if you eliminate an expense that never provided a

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-12097858 Wed, 25 Jan 2023 07:00:00 +1100 903 241 full false Where you should have invested in 2022? Where you should have invested in 2022? In 1905, George Santayana wrote; “Those who cannot remember the past are condemned to repeat it.” That’s why it is always worthwhile to reflect on the past year to identify any lessons that we can learn. Below I share the investment lessons that I believe last year taught us.  

Review of markets in 2022

Firstly, let’s review what returns various asset classes generated in the 2022 calendar year. 

The US market lost around 20%. However, if you were an Australian investor (unhedged) you would have only lost approximately 12% because the Australian dollar devalued (compared to the USD) over the year. 

The global share index performed slightly better by losing circa 18% over the year, or still 12% if your investments were unhedged i.e., in AUD.  

The UK share market was relatively flat for the year regardless of whether your investments were hedged or not, as both the Australian dollar and British pound lost value over the year by a similar amount. 

According to Corelogic, house prices across the largest 5 capital cities fell by 7.1% and apartments by 5.5% over the 2022 calendar year. Sydney was the worst performing market losing 12.1% and Adelaide the best with a gain of 10.1% (Melbourne lost 8%). 

Unfortunately, bonds had their worst year on record (or at least since many bond indexes began in in the ‘70s). Bond indexes lost between 6% to 15% over the year, depending on exposure type. Bonds and shares falling in value at the same time has only occurred twice over the past 100 years, so 2022 was a strange year for bonds. 

Listed commercial property investment (REITs) values have been hammered by higher interest rates, lockdowns and work from home. REITs lost in the range of 20% and 25% in value over the course of 2022. Global infrastructure fared much better. It was even on an unhedged basis, and down circa 5% on a hedged basis. 

Cash and commodities were the best performing asset classes. For example, term deposits rates rose over the second half of 2022 and are now typically paying above 4% p.a.  

What can we learn from 2022? 

The first lesson we were reminded of is that investment returns are random and unpredictable in the short run. No one can pick which asset class will outperform over the next 12 months. The table below demonstrates how random asset class returns are. There are no patterns (asset classes are colour coded and returns are shown in descending order for each calendar year).  

TABLE

The best evidence-based response to the fact that asset class performance is unpredictable is to diversify your investments across most asset classes. That is, have a finger in each pie, so to speak. 

The second lesson in 2022 is to have the discipline to make regular investments regardless of how negative sentiment becomes. Anyone that invested in the Australian market index in June and/or September last year is up 11+% already. The video below includes some excellent advice from the late Jack Bogle. This was recorded only a few years before he passed away at 90 years of age. He founded investment firm Vanguard in the ‘70s, so he has many decades of experience. In summary, Jack advises that the last thing an investor should do when the market drops is stop investing! 

https://twitter.com/alongsidefi/status/1524003189791547392

Volatility creates great investment opportunities 

There is plenty of evidence that demonstrates market pricing is not always efficient (accurate). Mi

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In 1905, George Santayana wrote; “Those who cannot remember the past are condemned to repeat it.” That’s why it is always worthwhile to reflect on the past year to identify any lessons that we can learn. Below I share the investment lessons that I believe last year taught us.  

Review of markets in 2022

Firstly, let’s review what returns various asset classes generated in the 2022 calendar year. 

The US market lost around 20%. However, if you were an Australian investor (unhedged) you would have only lost approximately 12% because the Australian dollar devalued (compared to the USD) over the year. 

The global share index performed slightly better by losing circa 18% over the year, or still 12% if your investments were unhedged i.e., in AUD.  

The UK share market was relatively flat for the year regardless of whether your investments were hedged or not, as both the Australian dollar and British pound lost value over the year by a similar amount. 

According to Corelogic, house prices across the largest 5 capital cities fell by 7.1% and apartments by 5.5% over the 2022 calendar year. Sydney was the worst performing market losing 12.1% and Adelaide the best with a gain of 10.1% (Melbourne lost 8%). 

Unfortunately, bonds had their worst year on record (or at least since many bond indexes began in in the ‘70s). Bond indexes lost between 6% to 15% over the year, depending on exposure type. Bonds and shares falling in value at the same time has only occurred twice over the past 100 years, so 2022 was a strange year for bonds. 

Listed commercial property investment (REITs) values have been hammered by higher interest rates, lockdowns and work from home. REITs lost in the range of 20% and 25% in value over the course of 2022. Global infrastructure fared much better. It was even on an unhedged basis, and down circa 5% on a hedged basis. 

Cash and commodities were the best performing asset classes. For example, term deposits rates rose over the second half of 2022 and are now typically paying above 4% p.a.  

What can we learn from 2022? 

The first lesson we were reminded of is that investment returns are random and unpredictable in the short run. No one can pick which asset class will outperform over the next 12 months. The table below demonstrates how random asset class returns are. There are no patterns (asset classes are colour coded and returns are shown in descending order for each calendar year).  

TABLE

The best evidence-based response to the fact that asset class performance is unpredictable is to diversify your investments across most asset classes. That is, have a finger in each pie, so to speak. 

The second lesson in 2022 is to have the discipline to make regular investments regardless of how negative sentiment becomes. Anyone that invested in the Australian market index in June and/or September last year is up 11+% already. The video below includes some excellent advice from the late Jack Bogle. This was recorded only a few years before he passed away at 90 years of age. He founded investment firm Vanguard in the ‘70s, so he has many decades of experience. In summary, Jack advises that the last thing an investor should do when the market drops is stop investing! 

https://twitter.com/alongsidefi/status/1524003189791547392

Volatility creates great investment opportunities 

There is plenty of evidence that demonstrates market pricing is not always efficient (accurate). Mi

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-12049430 Wed, 18 Jan 2023 07:00:00 +1100 1032 240 full false Best of 2022: Three steps to develop your own financial strategy Best of 2022: Three steps to develop your own financial strategy This was the third most popular podcast episode in 2022. My aim for this topic was to give investors an insight into the strategic process that I follow to develop a holistic, long-term financial plan for my clients. The topic obviously resonated with people. I hope you enjoy it and here’s a link to the blog in case you want to read it (instead of listing to the podcast). 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> This was the third most popular podcast episode in 2022. My aim for this topic was to give investors an insight into the strategic process that I follow to develop a holistic, long-term financial plan for my clients. The topic obviously resonated with people. I hope you enjoy it and here’s a link to the blog in case you want to read it (instead of listing to the podcast). 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11901851 Wed, 11 Jan 2023 07:00:00 +1100 1373 full false Best of 2022: Consistency is the key to building wealth Best of 2022: Consistency is the key to building wealth This was the second most popular podcast episode in 2022. My aim for this topic was to educate investors about the fact that investing a little bit each week, fortnight or month is much better than investing on an ad hoc basis. You may have seen the idea that improving something by 1% each day for one year results in a 37x improvement – small, regular improvements create massive results over the long run. The topic obviously resonated with people. I hope you enjoy it and here’s a link to the blog in case you want to read it (instead of listing to the podcast). 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> This was the second most popular podcast episode in 2022. My aim for this topic was to educate investors about the fact that investing a little bit each week, fortnight or month is much better than investing on an ad hoc basis. You may have seen the idea that improving something by 1% each day for one year results in a 37x improvement – small, regular improvements create massive results over the long run. The topic obviously resonated with people. I hope you enjoy it and here’s a link to the blog in case you want to read it (instead of listing to the podcast). 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11901838 Wed, 04 Jan 2023 07:00:00 +1100 1005 full false Best of 2022: 7 key economic principles you must know Best of 2022: 7 key economic principles you must know This was the most popular podcast episode in 2022. The idea behind this topic was to share some basic economic principals to help people understand economic commentary, political rhetoric and so on. The topic obviously resonated with people. I hope you enjoy it and here’s a link to the blog in case you want to read it (instead of listing to the podcast). 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> This was the most popular podcast episode in 2022. The idea behind this topic was to share some basic economic principals to help people understand economic commentary, political rhetoric and so on. The topic obviously resonated with people. I hope you enjoy it and here’s a link to the blog in case you want to read it (instead of listing to the podcast). 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11901820 Wed, 28 Dec 2022 07:00:00 +1100 1212 full false Brace for a big drop in consumer spending in 2023 Brace for a big drop in consumer spending in 2023 As you are aware, the RBA has aggressively hiked rates by 3% p.a. over the past 8 months, so variable home loan rates are now more than 5% p.a. (and investment loans approaching 6% p.a.). Fixed rate borrowers have avoided these higher interest rates. However, a lot of fixed rates will begin expiring next year. As such, many borrowers are facing much higher (40%+) mortgage repayments next year. 

These higher interest rates will have a huge impact on consumer discretionary spending and economic growth in 2023. 

Many Australians have accumulated large liquidity buffers

Many Australians have enjoyed vastly improved cash flow during covid lockdowns as interest rates were at all-time lows (e.g., fixed rates were sub-2% p.a.) and people couldn’t spend money on their usual leisure activities. Australians did two things with their improved cash flow. 

Firstly, they directed some of this cash flow towards improving liquidity buffers such as repaying home loans and/or accumulating cash in offset and savings accounts. According to RBA data, household savings (deposits) grew by over $500 billion (or 21%) since the beginning of the pandemic until June 2022. It is noteworthy that household liabilities have increased by only 12% over the same period. 

Secondly, they spent more money on discretionary items. As the chart below from CBA illustrates, during lockdowns, Aussies would spend online and return instore once lockdowns were lifted – Covid didn’t adversely affect spending. 

This chart covers the period from January 2020 until the end of November 2022. Total spending is still over 30% higher than it was at the beginning of 2020, although spending on things like retail and eating out has declined over recent months. 

 CHART

Discretionary spending will be the first to be cut 

Faced with the decision of whether to eat out or pay the mortgage, of course virtually everyone will choose to meet their liabilities first. 

The chart below illustrates the interest cost of mortgages assuming all mortgages were on variable interest rates (of course, many are fixed, as discussed above). The black dotted line is the projected total household interest bill at the current cash rate of 3.10% p.a. i.e., once all the rate hikes have been passed on. As you can see, once the cheap covid fixed rates expire, interest costs will be the same as they were pre-GFC in 2008 (in real terms). That is likely to have a massive impact on discretionary spending. 

 CHART 

Most borrowers will be ok 

I don’t expect a large increase in mortgage default rates. Most borrowers have been tested that they can afford to repay rates 3% higher than when they first apply for the loan (rates have now risen 3%). Therefore, so long as there’s not too many more rate hikes, borrowers should be able to afford these higher interest rates. It might not be easy or comfortable, but borrowers will tend to explore all avenues to stay in their family home i.e., not default on their mortgage. 

I remind you that savings (including offset accounts) have swelled by 21% over the past couple of years. Once discretionary spending has been cut, I’m sure that many borrowers will need to dip into these savings, which will go a long way. 

Of course, there will be some borrowers that have over-borrowed, or their circumstances have changed, and may experience financial stress and must sell their home. But I think these are likely to be in the minority and less likely to be in investment-grade locations. 

Don’t wait for a property crash in blue chip areas </

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> As you are aware, the RBA has aggressively hiked rates by 3% p.a. over the past 8 months, so variable home loan rates are now more than 5% p.a. (and investment loans approaching 6% p.a.). Fixed rate borrowers have avoided these higher interest rates. However, a lot of fixed rates will begin expiring next year. As such, many borrowers are facing much higher (40%+) mortgage repayments next year. 

These higher interest rates will have a huge impact on consumer discretionary spending and economic growth in 2023. 

Many Australians have accumulated large liquidity buffers

Many Australians have enjoyed vastly improved cash flow during covid lockdowns as interest rates were at all-time lows (e.g., fixed rates were sub-2% p.a.) and people couldn’t spend money on their usual leisure activities. Australians did two things with their improved cash flow. 

Firstly, they directed some of this cash flow towards improving liquidity buffers such as repaying home loans and/or accumulating cash in offset and savings accounts. According to RBA data, household savings (deposits) grew by over $500 billion (or 21%) since the beginning of the pandemic until June 2022. It is noteworthy that household liabilities have increased by only 12% over the same period. 

Secondly, they spent more money on discretionary items. As the chart below from CBA illustrates, during lockdowns, Aussies would spend online and return instore once lockdowns were lifted – Covid didn’t adversely affect spending. 

This chart covers the period from January 2020 until the end of November 2022. Total spending is still over 30% higher than it was at the beginning of 2020, although spending on things like retail and eating out has declined over recent months. 

 CHART

Discretionary spending will be the first to be cut 

Faced with the decision of whether to eat out or pay the mortgage, of course virtually everyone will choose to meet their liabilities first. 

The chart below illustrates the interest cost of mortgages assuming all mortgages were on variable interest rates (of course, many are fixed, as discussed above). The black dotted line is the projected total household interest bill at the current cash rate of 3.10% p.a. i.e., once all the rate hikes have been passed on. As you can see, once the cheap covid fixed rates expire, interest costs will be the same as they were pre-GFC in 2008 (in real terms). That is likely to have a massive impact on discretionary spending. 

 CHART 

Most borrowers will be ok 

I don’t expect a large increase in mortgage default rates. Most borrowers have been tested that they can afford to repay rates 3% higher than when they first apply for the loan (rates have now risen 3%). Therefore, so long as there’s not too many more rate hikes, borrowers should be able to afford these higher interest rates. It might not be easy or comfortable, but borrowers will tend to explore all avenues to stay in their family home i.e., not default on their mortgage. 

I remind you that savings (including offset accounts) have swelled by 21% over the past couple of years. Once discretionary spending has been cut, I’m sure that many borrowers will need to dip into these savings, which will go a long way. 

Of course, there will be some borrowers that have over-borrowed, or their circumstances have changed, and may experience financial stress and must sell their home. But I think these are likely to be in the minority and less likely to be in investment-grade locations. 

Don’t wait for a property crash in blue chip areas </

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11853935 Wed, 14 Dec 2022 07:00:00 +1100 780 239 full false Should you invest in gold? Should you invest in gold? I was interested to watch this YouTube video produced by ETF manager, BetaShares which compared the differing views of Warren Buffett and billionaire fund manager, Ray Dalio. 

Both men have been some of the most successful investors over the past 50+ years, yet they have opposing views regarding investing in gold, which I find very interesting. 

How well has gold done? 

As depicted in the chart below, the (USD) gold price has appreciated by 7.66% p.a. since 1970. However, between 1980 and mid-2002, the price of gold fell by an average of 4% p.a. Between mid-2002 and mid-2011, the price of gold appreciated at an extraordinary rate of over 20% p.a. Since then, gold is relatively unchanged i.e., its currently trading at 2011 levels, so there’s been no (nominal) growth over the past 11 years. 

Whilst the very long-term returns (i.e., 5 decades) are quite healthy, it’s clear that gold can experience (10 to 20 year) cycles where it can deliver poor returns. 

The upshot is that if you are going to invest in gold, you better get your timing right (buy after a long period of poor returns e.g., 2002) and/or be prepared to hold it for a very, very long time.  

Why do people invest in gold?

Firstly, gold is seen as a defensive investment. That is, when investors become concerned about the future returns that growth assets (shares and property) might offer, they seek safer investments, one of which is gold. It is seen as a way of preserving wealth because gold is a scarce metal and as such, is expected to retain its value (as demand always exceeds tight/finite supply). 

Secondly, gold can be seen as a better storage of value than currency, as the value of a country’s currency can be volatile. There are many factors that can affect the value of a country’s currency including interest rates, economic stability, inflation rate, current account balance, monetary policy such as quantitative easing and so forth. 

Why aren’t I attracted to investing in gold? 

Firstly, gold doesn’t produce any income, unlike other defensive assets such as bonds. Therefore, to generate an investment return, the value of gold must continue to rise over time. However, there have been long periods of time when this hasn’t happened e.g., price of gold fell 60% between 1980 and 2002 (i.e., fell 4% p.a.). 

Secondly, there is only one way that the value of gold can rise and that is when demand exceeds supply. Approximately 80% of gold is used for jewellery. Therefore, if you invest in gold, you are taking a strong position that demand for jewellery will continue to rise. Whilst that’s probably not a risky bet, I agree with Mr Buffett. That is, gold is not a productive asset unlike a company (stock). Companies have lots of ways they can generate value for shareholders. 

What are some better defensive investments? 

If investors are concerned about future returns in equity markets and desire lower risk investments, there are a few defensive investment options they can consider.  

The most common defensive investments are bonds. Bonds tend to have a negative correlation with shares i.e., when shares fall in value, bonds tend to rise in value (except for only 3 years out of the past 100 being 1931, 1969 and 2022 when the value of bonds and shares fell at the same time). The higher the quality the bond, the safer the investment is. Therefore, AAA rated government bonds are the most defensive options. 

Some shares can be more defensive than others. For example, consume

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Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

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]]> I was interested to watch this YouTube video produced by ETF manager, BetaShares which compared the differing views of Warren Buffett and billionaire fund manager, Ray Dalio. 

Both men have been some of the most successful investors over the past 50+ years, yet they have opposing views regarding investing in gold, which I find very interesting. 

How well has gold done? 

As depicted in the chart below, the (USD) gold price has appreciated by 7.66% p.a. since 1970. However, between 1980 and mid-2002, the price of gold fell by an average of 4% p.a. Between mid-2002 and mid-2011, the price of gold appreciated at an extraordinary rate of over 20% p.a. Since then, gold is relatively unchanged i.e., its currently trading at 2011 levels, so there’s been no (nominal) growth over the past 11 years. 

Whilst the very long-term returns (i.e., 5 decades) are quite healthy, it’s clear that gold can experience (10 to 20 year) cycles where it can deliver poor returns. 

The upshot is that if you are going to invest in gold, you better get your timing right (buy after a long period of poor returns e.g., 2002) and/or be prepared to hold it for a very, very long time.  

Why do people invest in gold?

Firstly, gold is seen as a defensive investment. That is, when investors become concerned about the future returns that growth assets (shares and property) might offer, they seek safer investments, one of which is gold. It is seen as a way of preserving wealth because gold is a scarce metal and as such, is expected to retain its value (as demand always exceeds tight/finite supply). 

Secondly, gold can be seen as a better storage of value than currency, as the value of a country’s currency can be volatile. There are many factors that can affect the value of a country’s currency including interest rates, economic stability, inflation rate, current account balance, monetary policy such as quantitative easing and so forth. 

Why aren’t I attracted to investing in gold? 

Firstly, gold doesn’t produce any income, unlike other defensive assets such as bonds. Therefore, to generate an investment return, the value of gold must continue to rise over time. However, there have been long periods of time when this hasn’t happened e.g., price of gold fell 60% between 1980 and 2002 (i.e., fell 4% p.a.). 

Secondly, there is only one way that the value of gold can rise and that is when demand exceeds supply. Approximately 80% of gold is used for jewellery. Therefore, if you invest in gold, you are taking a strong position that demand for jewellery will continue to rise. Whilst that’s probably not a risky bet, I agree with Mr Buffett. That is, gold is not a productive asset unlike a company (stock). Companies have lots of ways they can generate value for shareholders. 

What are some better defensive investments? 

If investors are concerned about future returns in equity markets and desire lower risk investments, there are a few defensive investment options they can consider.  

The most common defensive investments are bonds. Bonds tend to have a negative correlation with shares i.e., when shares fall in value, bonds tend to rise in value (except for only 3 years out of the past 100 being 1931, 1969 and 2022 when the value of bonds and shares fell at the same time). The higher the quality the bond, the safer the investment is. Therefore, AAA rated government bonds are the most defensive options. 

Some shares can be more defensive than others. For example, consume

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11819451 Wed, 07 Dec 2022 07:00:00 +1100 805 238 full false Are there major changes to super on the horizon? Are there major changes to super on the horizon? The Albanese government’s first Federal Budget last month was a bit of a fizzer in that there wasn’t much in the way of changes that affected investors and superannuants. 

However, subsequent murmurs by politicians’ hint at proposed changes that the government may be contemplating. In particular, I wanted to address these potential super changes and how they may impact you. 

Higher super contribution taxes for higher earners

In 2011, the Gillard government introduced a higher rate of tax that applies to super contributions made by higher income earners post 1 July 2012. The aim of this new tax was to reduce the tax benefits that super afforded to higher income earners (i.e., higher income earners enjoy a much higher tax saving in dollar terms than lower income earners). This tax is called “Division 293 tax”. 

Div. 293 applies to taxpayers that earn over a certain amount. The tax applies to all concessional (including employer) contributions at a flat rate of 30%, instead of the usual 15%. The Div. 293 income threshold is currently $250,000 based on adjustable taxable income. However, between 2012 and 2017 the threshold was higher at $300,000. 

It would be an ‘easy win’ for the government to reduce the Div. 293 threshold to raise more tax revenue. Reducing it to say $200,000 would align it to the highest marginal tax rate threshold once the stage 3 tax cuts are implemented post 1 July 2024. It would still be beneficial for higher income earners to make contributions, as it would save 17% in tax (i.e., taxed at 30% of contributed into super or 47% if taken as cash salary). 

Introduce a cap on super 

Currently, there is no limit to the amount that you can have inside super. When you are retired (i.e., in pension phase), the first $1.7 million is tax free. That is, any income and capital gains generated by this balance is tax free. Any amount more than $1.7million continues to be taxed at the standard flat rate of 15% on income and 10% on capital gains – which is still pretty good. 

But if you have over $5 million in super for example, why should you get the benefit of a 15% tax rate? The whole point of lower tax rates in super is that it increases the number of people that can fund their own retirement and not be a burden on the welfare system. But if you have $5 million, you will probably never qualify for the aged pension even if you pay the usual income tax rates. 

Capping the amount people can have in super is a no-brainer and should have been done years ago. It would help the government increase tax revenue without costing too many votes. 

Reduce the amount of super that is tax-free

As noted above, each person can have up to $1.7 million in super when retired (in pension phase) and enjoy a zero-tax rate. That means the super fund pays nil tax on investment income and capital gains (whilst still enjoying the benefits of franking credits). Also, any amount you withdraw from super as a pension is also tax free. This cap is called the transfer balance cap (TBC).

The TBC was introduced on 1 July 2017 and was originally $1.6 million. However, it is indexed to CPI and increased in $100,000 increments. Therefore, the TBC was increased to $1.7 million on 1 July 2021. 

Reducing the TBC would be an attractive way for the government to raise tax revenue as it would only impact wealthier Australians. They could do this in two ways. Firstly, the

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

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Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> The Albanese government’s first Federal Budget last month was a bit of a fizzer in that there wasn’t much in the way of changes that affected investors and superannuants. 

However, subsequent murmurs by politicians’ hint at proposed changes that the government may be contemplating. In particular, I wanted to address these potential super changes and how they may impact you. 

Higher super contribution taxes for higher earners

In 2011, the Gillard government introduced a higher rate of tax that applies to super contributions made by higher income earners post 1 July 2012. The aim of this new tax was to reduce the tax benefits that super afforded to higher income earners (i.e., higher income earners enjoy a much higher tax saving in dollar terms than lower income earners). This tax is called “Division 293 tax”. 

Div. 293 applies to taxpayers that earn over a certain amount. The tax applies to all concessional (including employer) contributions at a flat rate of 30%, instead of the usual 15%. The Div. 293 income threshold is currently $250,000 based on adjustable taxable income. However, between 2012 and 2017 the threshold was higher at $300,000. 

It would be an ‘easy win’ for the government to reduce the Div. 293 threshold to raise more tax revenue. Reducing it to say $200,000 would align it to the highest marginal tax rate threshold once the stage 3 tax cuts are implemented post 1 July 2024. It would still be beneficial for higher income earners to make contributions, as it would save 17% in tax (i.e., taxed at 30% of contributed into super or 47% if taken as cash salary). 

Introduce a cap on super 

Currently, there is no limit to the amount that you can have inside super. When you are retired (i.e., in pension phase), the first $1.7 million is tax free. That is, any income and capital gains generated by this balance is tax free. Any amount more than $1.7million continues to be taxed at the standard flat rate of 15% on income and 10% on capital gains – which is still pretty good. 

But if you have over $5 million in super for example, why should you get the benefit of a 15% tax rate? The whole point of lower tax rates in super is that it increases the number of people that can fund their own retirement and not be a burden on the welfare system. But if you have $5 million, you will probably never qualify for the aged pension even if you pay the usual income tax rates. 

Capping the amount people can have in super is a no-brainer and should have been done years ago. It would help the government increase tax revenue without costing too many votes. 

Reduce the amount of super that is tax-free

As noted above, each person can have up to $1.7 million in super when retired (in pension phase) and enjoy a zero-tax rate. That means the super fund pays nil tax on investment income and capital gains (whilst still enjoying the benefits of franking credits). Also, any amount you withdraw from super as a pension is also tax free. This cap is called the transfer balance cap (TBC).

The TBC was introduced on 1 July 2017 and was originally $1.6 million. However, it is indexed to CPI and increased in $100,000 increments. Therefore, the TBC was increased to $1.7 million on 1 July 2021. 

Reducing the TBC would be an attractive way for the government to raise tax revenue as it would only impact wealthier Australians. They could do this in two ways. Firstly, the

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11770736 Wed, 30 Nov 2022 07:00:00 +1100 1080 237 full false Why I think property prices have bottomed Why I think property prices have bottomed CoreLogic data indicates that property prices in the 5 largest capital cities have fallen by 7.1% since May, when the RBA started hiking interest rates. Sydney has seen the largest price fall – down by around 10%, and Melbourne has fallen by 6.7%. 

But it’s not all bad news. House prices in Brisbane, Adelaide, and Perth are still materially higher than they were a year ago. 

I wrote a blog in March in response to fund manager, Christopher Joye’s prediction that property prices would fall 15% to 25% within 2 years if the RBA hiked rates by at least 1%. At the time, it was my view that prices would fall 5% to 7%. This has happened now, and I don’t think we’ll see any more (material) falls for the reasons set out below. 

Supply and demand are more balanced 

One of the reasons that prices have fallen this year is that it’s no longer necessary to overpay to buy a property. Last year, I wrote that the only way to successfully buy a property in 2021 was to overpay. That’s because potential buyers outnumbered potential sellers. 

Buyer demand has fallen (probably due to higher rates, share market volatility and talk of a possible recession) but so has supply i.e., the number of new listings – they are 18% below the 5 year average. As such, the market is relatively balanced (between buyers and sellers) which means there is no need to overpay anymore. Good quality, investment-grade property is still attracting strong buyer demand and is typically selling for fair value. 

Of course, some geographic markets might experience different conditions, such as regional towns and beachside locations. It is possible that some locations may experience larger declines in demand and as such, prices may continue to fall. 

Most borrowers have factored in higher rates 

Most borrowers realised that interest rates would not stay at 2% p.a. forever. Of course, if they were listening to (and believing) the RBA governor last year, they wouldn’t have expected rates to rise this year (the governor was saying they’d rise in 2024). But whether it was 2024 or 2022, most borrowers have been prepared for higher interest rates. 

It is true that the historically low rates in 2020 and 2021 did encourage people to borrow more. But not because they thought rates would never rise. Most borrowers realised that interest rates tend to range between 5% and 7% over the long run, so they viewed borrowing in 2020 or 2021 as a bit of a free kick (cheap money for a few years), especially if they fixed, which many borrowers did. 

Many existing borrowers took the opportunity to fix the interest rates on their mortgages during 2020 and 2021. These fixed rates will start expiring from next year and as such, repayments will increase substantially – more than double in some cases. This will have an impact on discretionary spending, which hasn’t yet declined. 

Also, variable interest rate borrowers haven’t yet felt the full effect of the rate hikes, as there’s a two-to-three-month lag. 

The upshot is that most borrowers are prepared for higher loan repayments. There’s a lot of fat in discretionary spending at the

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> CoreLogic data indicates that property prices in the 5 largest capital cities have fallen by 7.1% since May, when the RBA started hiking interest rates. Sydney has seen the largest price fall – down by around 10%, and Melbourne has fallen by 6.7%. 

But it’s not all bad news. House prices in Brisbane, Adelaide, and Perth are still materially higher than they were a year ago. 

I wrote a blog in March in response to fund manager, Christopher Joye’s prediction that property prices would fall 15% to 25% within 2 years if the RBA hiked rates by at least 1%. At the time, it was my view that prices would fall 5% to 7%. This has happened now, and I don’t think we’ll see any more (material) falls for the reasons set out below. 

Supply and demand are more balanced 

One of the reasons that prices have fallen this year is that it’s no longer necessary to overpay to buy a property. Last year, I wrote that the only way to successfully buy a property in 2021 was to overpay. That’s because potential buyers outnumbered potential sellers. 

Buyer demand has fallen (probably due to higher rates, share market volatility and talk of a possible recession) but so has supply i.e., the number of new listings – they are 18% below the 5 year average. As such, the market is relatively balanced (between buyers and sellers) which means there is no need to overpay anymore. Good quality, investment-grade property is still attracting strong buyer demand and is typically selling for fair value. 

Of course, some geographic markets might experience different conditions, such as regional towns and beachside locations. It is possible that some locations may experience larger declines in demand and as such, prices may continue to fall. 

Most borrowers have factored in higher rates 

Most borrowers realised that interest rates would not stay at 2% p.a. forever. Of course, if they were listening to (and believing) the RBA governor last year, they wouldn’t have expected rates to rise this year (the governor was saying they’d rise in 2024). But whether it was 2024 or 2022, most borrowers have been prepared for higher interest rates. 

It is true that the historically low rates in 2020 and 2021 did encourage people to borrow more. But not because they thought rates would never rise. Most borrowers realised that interest rates tend to range between 5% and 7% over the long run, so they viewed borrowing in 2020 or 2021 as a bit of a free kick (cheap money for a few years), especially if they fixed, which many borrowers did. 

Many existing borrowers took the opportunity to fix the interest rates on their mortgages during 2020 and 2021. These fixed rates will start expiring from next year and as such, repayments will increase substantially – more than double in some cases. This will have an impact on discretionary spending, which hasn’t yet declined. 

Also, variable interest rate borrowers haven’t yet felt the full effect of the rate hikes, as there’s a two-to-three-month lag. 

The upshot is that most borrowers are prepared for higher loan repayments. There’s a lot of fat in discretionary spending at the

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11740262 Wed, 23 Nov 2022 07:00:00 +1100 1106 236 full false Governments vested interest in maintaining property price growth Governments vested interest in maintaining property price growth There are many large and powerful institutions that have a vested interest in rising property prices. But all levels of government (i.e., federal, state and local) probably have the most to gain, as I’ll explain in this blog. This leads to two important observations. 

Firstly, the government is the main contributor to housing affordability pressures i.e., making housing less affordable. 

Secondly, government tax revenues are dependent upon rising prices and demand for property. I don’t want to debate whether this is right or wrong. I’m merely interested in highlighting economic and financial reality, as I think it’s helpful to inform personal investment decisions. 

The federal government revenue

The negative gearing tax break afforded to property investors has been widely debated since it was introduced in 1985. You will recall that Bill Shorten proposed to remove negative gearing in his unsuccessful federal election campaign in 2019. But its only half of the tax story.  

Using ATO data for the 2019/20 tax year, it appears that property investors claimed circa $728.5 million dollars of negative gearing income losses. But this is dwarfed by the taxable capital gains that taxpayers declared in the same year of over $20 billion. Of course these gains come from many sources (not just property investments) including share investments, sale of businesses, and so on. But property is a lumpy asset, so it tends to give rise to large CGT liabilities. Unfortunately, more granular information was unavailable. 

I’ve said in this blog many times, the most efficient way to build wealth is to invest in properties that have the attributes to drive strong capital growth over the long run, even if they produce a negative cash flow (because the rental yields are low). The wealth accumulating power of compounding capital growth will eventually dwarf any negative cash flow. 

The same is true when it comes to federal government tax revenue. The government generates a lot of (CGT) taxation revenue from rising property prices. 

State government tax revenue is highly dependent on property 

Australian states and territories generate two main taxation revenue streams from property, being stamp duty (i.e., transfer duty payable when a property is sold) and land tax. These two property taxes generate a lot of tax revenue for the states. In fact, for most states, property taxes are the single largest source of taxation revenue. For example:  

§  VIC: budgeted property revenue of $14 billion which accounts for 46.5% of the state’s total taxation revenue. 

§  NSW: budgeted property revenue of $16.5 billion which accounts for 41.6% of the state’s total taxation revenue.

§  QLD: budgeted property revenue of $6.5 billion which accounts for 34.5% of the state’s total taxation revenue. 

Transfer duty is driven by the volume and value of property sales. The states are responsible for regulating the property market. It should come as no surprise that state governments have been quite lax with regulating these markets and/or enforcing consumer protections. For example, financial advisors have very onerous obligations if they want to recommend a client invests $100k into the share market (regulated by the federal government). However, property buyers’ agents have very few obligations (virtually none) if they recommend a client invest $1m into an investment property. States want more property transactions to generate more tax revenue 

Land tax revenue is driven by land valuations undertake

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

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Got a question for the podcast?

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> There are many large and powerful institutions that have a vested interest in rising property prices. But all levels of government (i.e., federal, state and local) probably have the most to gain, as I’ll explain in this blog. This leads to two important observations. 

Firstly, the government is the main contributor to housing affordability pressures i.e., making housing less affordable. 

Secondly, government tax revenues are dependent upon rising prices and demand for property. I don’t want to debate whether this is right or wrong. I’m merely interested in highlighting economic and financial reality, as I think it’s helpful to inform personal investment decisions. 

The federal government revenue

The negative gearing tax break afforded to property investors has been widely debated since it was introduced in 1985. You will recall that Bill Shorten proposed to remove negative gearing in his unsuccessful federal election campaign in 2019. But its only half of the tax story.  

Using ATO data for the 2019/20 tax year, it appears that property investors claimed circa $728.5 million dollars of negative gearing income losses. But this is dwarfed by the taxable capital gains that taxpayers declared in the same year of over $20 billion. Of course these gains come from many sources (not just property investments) including share investments, sale of businesses, and so on. But property is a lumpy asset, so it tends to give rise to large CGT liabilities. Unfortunately, more granular information was unavailable. 

I’ve said in this blog many times, the most efficient way to build wealth is to invest in properties that have the attributes to drive strong capital growth over the long run, even if they produce a negative cash flow (because the rental yields are low). The wealth accumulating power of compounding capital growth will eventually dwarf any negative cash flow. 

The same is true when it comes to federal government tax revenue. The government generates a lot of (CGT) taxation revenue from rising property prices. 

State government tax revenue is highly dependent on property 

Australian states and territories generate two main taxation revenue streams from property, being stamp duty (i.e., transfer duty payable when a property is sold) and land tax. These two property taxes generate a lot of tax revenue for the states. In fact, for most states, property taxes are the single largest source of taxation revenue. For example:  

§  VIC: budgeted property revenue of $14 billion which accounts for 46.5% of the state’s total taxation revenue. 

§  NSW: budgeted property revenue of $16.5 billion which accounts for 41.6% of the state’s total taxation revenue.

§  QLD: budgeted property revenue of $6.5 billion which accounts for 34.5% of the state’s total taxation revenue. 

Transfer duty is driven by the volume and value of property sales. The states are responsible for regulating the property market. It should come as no surprise that state governments have been quite lax with regulating these markets and/or enforcing consumer protections. For example, financial advisors have very onerous obligations if they want to recommend a client invests $100k into the share market (regulated by the federal government). However, property buyers’ agents have very few obligations (virtually none) if they recommend a client invest $1m into an investment property. States want more property transactions to generate more tax revenue 

Land tax revenue is driven by land valuations undertake

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11688035 Wed, 16 Nov 2022 07:00:00 +1100 1145 235 full false Retirement might not be as enjoyable as you expect unless... Retirement might not be as enjoyable as you expect unless... I recently appeared as a guest on The Australian newspaper’s Money Café podcast, where we discussed the FIRE moment. The acronym stands for Financially Independent, Retire Early, which involves living as frugally as possible, investing as much as possible so that you can afford to retire as soon as possible. 

A listener that works in the mental health sector wrote into the show to say that she would actively discourage people from retiring early. Instead, perhaps work less, she suggested. She believed that working was beneficial to a person’s wellbeing and mental health. 

A UK study from 2013 found that retirement increased the probability of suffering from clinic depression by circa 40% and a physical health conditions by 60%. 

Retirement might not be as enjoyable as you expect

Imagine having the whole day to do whatever you want. No deadlines. No emails. No meetings. No obligations. Sounds appealing, right? The problem is that for many people, the retirement honeymoon wears off quickly. It is not uncommon for people to deal with a variety of feelings: 

  • §  Loss of self-worth. For many of us, our occupation contributes a lot towards how we define ourselves and our self-worth. Once we have retired, we no longer see ourselves as “a lawyer, a surgeon, a CEO…”, which can lead to a loss of identity which is often connected to ones self-worth.  
  • §  Miss daily routine. The daily routine of travelling to work, meetings, deadlines and so on adds structure to our day. Without this structure, people can start to feel bored, aimless, and isolated.
  • §  Hobbies and interests aren’t enough. Hobbies and interests can be great pastimes whilst we are working, as they allow us time to relax and socialise. However, once we stop working, we might find we need activities that offer more than just relaxation. 
  • §  Expectations are different to your spouses. If your spouse wants completely different things from retirement this could create conflict. 

I think most people are underprepared for retirement.

There are two important needs that work satisfies  

Speaker and coach, Tony Robbins has adapted Maslow's hierarchy of needs to derive 6 human needs to be fulfilled/happy being (1) certainty, (2) variety, (3) significance, (4) connection/love, (5) growth and (6) contribution. 

The last two needs are often fulfilled by our occupation. 

Growth 

Growth refers to the desire to constantly improve and learn more. If you are constantly striving to learn more at work, expand your capability, do work you are proud of, strive for promotions and so on, then it’s likely growth is important to you. If so, you will need to consider how you will fulfil this need in retirement. That could include finding paid or unpaid employment you connect with, studying, taking up a new hobby, travelling the world and so on. 

Contribution 

Contribution refers to a sense of service and focus on helping, giving to and supporting others. As Tony Robbins says, living is giving. This need can be fulfilled by your occupation if you work for an organisation or business that pursues a cause that you identify with. If this describes you, you’ll need to consider how you will fill this need in retirement. Some solutions to this might include helping/looking after families and/or friends, volunteering or starting your own charity for a cau

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> I recently appeared as a guest on The Australian newspaper’s Money Café podcast, where we discussed the FIRE moment. The acronym stands for Financially Independent, Retire Early, which involves living as frugally as possible, investing as much as possible so that you can afford to retire as soon as possible. 

A listener that works in the mental health sector wrote into the show to say that she would actively discourage people from retiring early. Instead, perhaps work less, she suggested. She believed that working was beneficial to a person’s wellbeing and mental health. 

A UK study from 2013 found that retirement increased the probability of suffering from clinic depression by circa 40% and a physical health conditions by 60%. 

Retirement might not be as enjoyable as you expect

Imagine having the whole day to do whatever you want. No deadlines. No emails. No meetings. No obligations. Sounds appealing, right? The problem is that for many people, the retirement honeymoon wears off quickly. It is not uncommon for people to deal with a variety of feelings: 

  • §  Loss of self-worth. For many of us, our occupation contributes a lot towards how we define ourselves and our self-worth. Once we have retired, we no longer see ourselves as “a lawyer, a surgeon, a CEO…”, which can lead to a loss of identity which is often connected to ones self-worth.  
  • §  Miss daily routine. The daily routine of travelling to work, meetings, deadlines and so on adds structure to our day. Without this structure, people can start to feel bored, aimless, and isolated.
  • §  Hobbies and interests aren’t enough. Hobbies and interests can be great pastimes whilst we are working, as they allow us time to relax and socialise. However, once we stop working, we might find we need activities that offer more than just relaxation. 
  • §  Expectations are different to your spouses. If your spouse wants completely different things from retirement this could create conflict. 

I think most people are underprepared for retirement.

There are two important needs that work satisfies  

Speaker and coach, Tony Robbins has adapted Maslow's hierarchy of needs to derive 6 human needs to be fulfilled/happy being (1) certainty, (2) variety, (3) significance, (4) connection/love, (5) growth and (6) contribution. 

The last two needs are often fulfilled by our occupation. 

Growth 

Growth refers to the desire to constantly improve and learn more. If you are constantly striving to learn more at work, expand your capability, do work you are proud of, strive for promotions and so on, then it’s likely growth is important to you. If so, you will need to consider how you will fulfil this need in retirement. That could include finding paid or unpaid employment you connect with, studying, taking up a new hobby, travelling the world and so on. 

Contribution 

Contribution refers to a sense of service and focus on helping, giving to and supporting others. As Tony Robbins says, living is giving. This need can be fulfilled by your occupation if you work for an organisation or business that pursues a cause that you identify with. If this describes you, you’ll need to consider how you will fill this need in retirement. Some solutions to this might include helping/looking after families and/or friends, volunteering or starting your own charity for a cau

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11650560 Wed, 09 Nov 2022 07:00:00 +1100 950 234 full false How much should you invest in property, shares and super? How much should you invest in property, shares and super? A common question I receive is how much should I invest in property? That is, how do you know when you have enough, and should you start investing in other assets? 

It’s a good question because it invites people to consider their goals and develop a long-term strategy to achieve them. I set out some of the factors that you should consider below. But ultimately, it really depends on personal circumstances.  

Rule of thumb is you need 20 to 25 times income 

The first consideration is the value of the investment assets you have today compared to what you need by the time you want to retire. 

As a rule of thumb, you need to accumulate investment assets equal to 20 to 25 times the annual income you require to fund retirement. For example, if you aim to spend $100k p.a. when you are retired, you need to accumulate $2 to $2.5 million of net investment assets by the time you retire. These assets could include equity in investment properties (i.e., net sales proceeds less CGT and outstanding loans), shares and superannuation. 

Lifecycle of an investor 

If you are a long way from achieving your net asset goal, then it is likely that your investment strategy will need to be more aggressive e.g., borrowing to invest. However, if you are close to achieving this goal, then your focus should be on ensuring the mix of assets are correct. 

This video sets out the typical lifecycle of an investor e.g., why it’s best to start with property, then invest in super and shares. 

What is the right mix? 

Longevity risk is the risk that you will live longer than your financial resources will allow i.e., you’ll run out of money. To protect yourself against longevity, your investments must generate a combination of capital growth and income. Income will help you fund living expenses and capital growth will protect your asset base against the impact of inflation. 

For example, if you have $2.5 million of investment assets, your average return might consist of 3.5% income and 3.5% growth. This will provide you with approximately $88k p.a. of income. If some of this income is franked (imputation credits) or from super, you probably won’t pay any tax. In addition to income, the value of your investments will appreciate by $88k, of which you’ll need to spend $12k to top-up living expenses (i.e., to give you $100k p.a.). The remaining $76k will be reinvested and compound. This should ensure your investment assets keep up with inflation i.e., no real change in value. If that happens, theoretically (i.e., mathematically), you can afford to live forever. 

Considerations…

I discuss some of the factors that I consider when contemplating whether an investor has the right mix of assets. 

Consider the impact of debt servicing costs 

Investing in more (investment-grade) property will help you accumulate more wealth over the long run. However, if you are borrowing money to fund these investments, which most people do, it means your cash flow will become more sensitive to changes in interest rates. That’s not what you want if you are approaching retirement or would like the flexibility to enable you to reduce your employment income. In this situation, you really want less debt, not more. 

The other consideration is that investing in property absorbs more of your surplus cash flow i.e., funding the shortfall between rental income and interest cost. If you contribute all your cash flow towards funding investment property holding costs, you won’t have any ability to invest in other assets (shares and super) or repay debt. This creates an opportunity cost and might cause you to be further away from retirement, not closer to it. 

Property doesn

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> A common question I receive is how much should I invest in property? That is, how do you know when you have enough, and should you start investing in other assets? 

It’s a good question because it invites people to consider their goals and develop a long-term strategy to achieve them. I set out some of the factors that you should consider below. But ultimately, it really depends on personal circumstances.  

Rule of thumb is you need 20 to 25 times income 

The first consideration is the value of the investment assets you have today compared to what you need by the time you want to retire. 

As a rule of thumb, you need to accumulate investment assets equal to 20 to 25 times the annual income you require to fund retirement. For example, if you aim to spend $100k p.a. when you are retired, you need to accumulate $2 to $2.5 million of net investment assets by the time you retire. These assets could include equity in investment properties (i.e., net sales proceeds less CGT and outstanding loans), shares and superannuation. 

Lifecycle of an investor 

If you are a long way from achieving your net asset goal, then it is likely that your investment strategy will need to be more aggressive e.g., borrowing to invest. However, if you are close to achieving this goal, then your focus should be on ensuring the mix of assets are correct. 

This video sets out the typical lifecycle of an investor e.g., why it’s best to start with property, then invest in super and shares. 

What is the right mix? 

Longevity risk is the risk that you will live longer than your financial resources will allow i.e., you’ll run out of money. To protect yourself against longevity, your investments must generate a combination of capital growth and income. Income will help you fund living expenses and capital growth will protect your asset base against the impact of inflation. 

For example, if you have $2.5 million of investment assets, your average return might consist of 3.5% income and 3.5% growth. This will provide you with approximately $88k p.a. of income. If some of this income is franked (imputation credits) or from super, you probably won’t pay any tax. In addition to income, the value of your investments will appreciate by $88k, of which you’ll need to spend $12k to top-up living expenses (i.e., to give you $100k p.a.). The remaining $76k will be reinvested and compound. This should ensure your investment assets keep up with inflation i.e., no real change in value. If that happens, theoretically (i.e., mathematically), you can afford to live forever. 

Considerations…

I discuss some of the factors that I consider when contemplating whether an investor has the right mix of assets. 

Consider the impact of debt servicing costs 

Investing in more (investment-grade) property will help you accumulate more wealth over the long run. However, if you are borrowing money to fund these investments, which most people do, it means your cash flow will become more sensitive to changes in interest rates. That’s not what you want if you are approaching retirement or would like the flexibility to enable you to reduce your employment income. In this situation, you really want less debt, not more. 

The other consideration is that investing in property absorbs more of your surplus cash flow i.e., funding the shortfall between rental income and interest cost. If you contribute all your cash flow towards funding investment property holding costs, you won’t have any ability to invest in other assets (shares and super) or repay debt. This creates an opportunity cost and might cause you to be further away from retirement, not closer to it. 

Property doesn

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11598382 Wed, 02 Nov 2022 07:00:00 +1100 1076 Stuart Wemyss, ProSolution, Investopoly, Rules of the Lending Game, Property investing, Build wealth 233 full false What’s going on with share markets! What’s going on with share markets! Calendar year to date, the stock and bond markets have produced some of the worst returns on record, which is unusual because bonds and stocks are typically negatively correlated. In fact, this has only happened two times over the past 96 years, as illustrated in this chart. Even gold, commodities and property have lost value this year. It’s really been a horrible market for investment returns. 

I discuss the key risks that have driven markets lower below, as well as highlighting the investment opportunities that exist as a result. 

How high will interest rates rise and for how long? 

I think the biggest factor that is creating the most uncertainty is what the terminal cash rate may be i.e., how high will central banks have to raise rates to reduce inflation. I don’t think the market will begin any sustainable recovery until the terminal cash rate becomes clear and ascertainable.

If the terminal cash rate turns out to be lower than what the market has priced in, then it is possible that markets could rebound strongly. In Australia, the market has priced in a terminal cash rate of 4.0%, so it’s entirely possible that the market has over-sold, since no economists expect the RBA to raise rates by another 1.40%. For example, the big 4 banks forecast the terminal cash rate to be 3.1-3.6% which is an increase by another 0.5% to 1.0% over the coming 6 to 9 months. 

In the US, its equivalent cash rate is currently set at 3.00-3.25% and the market is expecting a terminal rate of between 4.5-5.0%, so it seems the US Fed Reserve has a lot more work to do than the RBA does in Australia. 

My point is that until we see successive data that confirms inflation has begun returning to normal levels, the market cannot accurately price in an accurate terminal cash rate. 

Will there be a recession? If so, how deep? 

In response to rising inflation, central banks have hiked interest rates faster that anytime in history. 

Normally, when a central bank wants to tighten monetary policy, it does so less aggressively so that it can measure the impact that higher rates is having on the economy. This more measured approach allows central bankers to adjust their approach to ensure it doesn’t raise rates too far and cause a recession i.e., slow economic growth too much. 

Given most economic data lags by two to three months, central banks are really flying blind at the moment. That is, they won’t be able to measure the impact of current interest rate settings until the end of this year or start of 2023. As such, there’s a risk that they raise rates too fast and too hard and send the economy into a recession. How deep that recession is will depend on how much they overtightened rates. And that is yet to be seen, but it’s a risk that markets are contemplating. 

Will there be a nuclear war?

Of course, the most significant geopolitical risk is Putin using nuclear weapons in its conflict with the Ukraine. If it does, the Western alliance will have to respond and of course that could spiral into World War III.  

I am certainly not a geopolitical expert, so I cannot offer any commentary about this risk other than to say it’s a risk factor that must be impacting markets. 

What damage will energy prices inflict 

The price of domestic energy (gas and electricity) is rising around the world, especially in the UK where prices have more than doubled over the past 12 months. These price increases are likely to cause economic pain for residences of northern hemisphere countries as they approach winter. 

Residents therefore must tackle higher energy prices at th

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Calendar year to date, the stock and bond markets have produced some of the worst returns on record, which is unusual because bonds and stocks are typically negatively correlated. In fact, this has only happened two times over the past 96 years, as illustrated in this chart. Even gold, commodities and property have lost value this year. It’s really been a horrible market for investment returns. 

I discuss the key risks that have driven markets lower below, as well as highlighting the investment opportunities that exist as a result. 

How high will interest rates rise and for how long? 

I think the biggest factor that is creating the most uncertainty is what the terminal cash rate may be i.e., how high will central banks have to raise rates to reduce inflation. I don’t think the market will begin any sustainable recovery until the terminal cash rate becomes clear and ascertainable.

If the terminal cash rate turns out to be lower than what the market has priced in, then it is possible that markets could rebound strongly. In Australia, the market has priced in a terminal cash rate of 4.0%, so it’s entirely possible that the market has over-sold, since no economists expect the RBA to raise rates by another 1.40%. For example, the big 4 banks forecast the terminal cash rate to be 3.1-3.6% which is an increase by another 0.5% to 1.0% over the coming 6 to 9 months. 

In the US, its equivalent cash rate is currently set at 3.00-3.25% and the market is expecting a terminal rate of between 4.5-5.0%, so it seems the US Fed Reserve has a lot more work to do than the RBA does in Australia. 

My point is that until we see successive data that confirms inflation has begun returning to normal levels, the market cannot accurately price in an accurate terminal cash rate. 

Will there be a recession? If so, how deep? 

In response to rising inflation, central banks have hiked interest rates faster that anytime in history. 

Normally, when a central bank wants to tighten monetary policy, it does so less aggressively so that it can measure the impact that higher rates is having on the economy. This more measured approach allows central bankers to adjust their approach to ensure it doesn’t raise rates too far and cause a recession i.e., slow economic growth too much. 

Given most economic data lags by two to three months, central banks are really flying blind at the moment. That is, they won’t be able to measure the impact of current interest rate settings until the end of this year or start of 2023. As such, there’s a risk that they raise rates too fast and too hard and send the economy into a recession. How deep that recession is will depend on how much they overtightened rates. And that is yet to be seen, but it’s a risk that markets are contemplating. 

Will there be a nuclear war?

Of course, the most significant geopolitical risk is Putin using nuclear weapons in its conflict with the Ukraine. If it does, the Western alliance will have to respond and of course that could spiral into World War III.  

I am certainly not a geopolitical expert, so I cannot offer any commentary about this risk other than to say it’s a risk factor that must be impacting markets. 

What damage will energy prices inflict 

The price of domestic energy (gas and electricity) is rising around the world, especially in the UK where prices have more than doubled over the past 12 months. These price increases are likely to cause economic pain for residences of northern hemisphere countries as they approach winter. 

Residents therefore must tackle higher energy prices at th

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11554929 Wed, 26 Oct 2022 07:00:00 +1100 1035 Stuart Wemyss, ProSolution, Investopoly, Rules of the Lending Game, share markets, Build wealth 232 full false To what extent does rental yield affect your borrowing capacity? To what extent does rental yield affect your borrowing capacity? The very first article that I wrote for a magazine was published 19 years ago! No wonder I feel old. The article was called ‘Unlimited finance…’. My thesis was that investing in high yield properties, doesn’t magically extend ones borrowing capacity allowing them to invest a lot more.  

Some investors believe targeting high rental yielding investment properties will allow them to borrow a lot more and therefore buy more properties. And the more property they hold, the more wealth they accumulate, or so their theory goes. However, the truth is that borrowing capacity isn’t that sensitive to rental yields.  

How much does rental yield affect borrowing capacity 

I wrote a blog last week highlighting that borrowing capacity is probably the tightest that it’s been in 20 years. The reason is that lenders must add a benchmark interest rate of 3% on top of the actual rate you will pay to ensure you can afford a loan, should interest rates rise further.  

Banks will also base their affordability on principal and interest repayments over a 25-year loan term. As such, the benchmark repayments for a $1 million investment loan will be $93,000. Consequently, for an investment property to be borrowing capacity neutral, it must generate a gross rental yield of over 13%, as most lenders shave off 20-30% of rental income to allow for expenses.  

Obviously, there aren’t a lot of residential properties yielding more than 13%. As such, even higher yielding investments (e.g., 4-6% p.a.) eat into an investors borrowing capacity.  

Lower yielding properties reduce your borrowing capacity by 25% 

I spoke to an investor recently that had invested in 3 properties. The aggregate value of these properties was $1.2 million, and the portfolio had $1 million of debt. The gross rental yield across the portfolio was around 5.2% p.a. This investor thought targeting high yielding properties would allow him to borrow more and buy more properties.  

It is true that higher yielding properties do increase your borrowing capacity. Let’s look at an example. I assumed each spouse earns $100k p.a. gross, an outstanding home loan of $350k, spend $5,500 per month on living expenses and have a credit card with a $5k limit. Based on these assumptions, I calculated their borrowing capacity as follows: 

  • If they achieve a gross rental yield of 5.5%, they can invest $1 million in property. 
  • If they achieve a gross rental yield of 3%, they can invest $815k, a reduction of 18.5%. 
  • If they achieve a gross rental yield of 2%, they can invest $750, a reduction of 25%.  

It’s all about the amount and quality of land 

Generally, a property’s accommodation size and quality will determine how much rental income it will attract. Therefore, to achieve a higher rental yield, you must spend proportionally more on building value, and less on land value. But doing so will mean that you will probably accumulate less wealth, as discussed here.  

Using the same assumptions that I used in this blog, I have calculated the amount of wealth an investor would accumulate if they invested in a property and sold it after 30 years, repaid the loan and paid any tax liability (CGT). The cash flow holding costs were also included in this calculation.  

As the chart below demonstrates, even though the investor that targeted a 2% rental yield and invested 25% less (i.e., $750k versus $1m), they accumulated almost twice as mu

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> The very first article that I wrote for a magazine was published 19 years ago! No wonder I feel old. The article was called ‘Unlimited finance…’. My thesis was that investing in high yield properties, doesn’t magically extend ones borrowing capacity allowing them to invest a lot more.  

Some investors believe targeting high rental yielding investment properties will allow them to borrow a lot more and therefore buy more properties. And the more property they hold, the more wealth they accumulate, or so their theory goes. However, the truth is that borrowing capacity isn’t that sensitive to rental yields.  

How much does rental yield affect borrowing capacity 

I wrote a blog last week highlighting that borrowing capacity is probably the tightest that it’s been in 20 years. The reason is that lenders must add a benchmark interest rate of 3% on top of the actual rate you will pay to ensure you can afford a loan, should interest rates rise further.  

Banks will also base their affordability on principal and interest repayments over a 25-year loan term. As such, the benchmark repayments for a $1 million investment loan will be $93,000. Consequently, for an investment property to be borrowing capacity neutral, it must generate a gross rental yield of over 13%, as most lenders shave off 20-30% of rental income to allow for expenses.  

Obviously, there aren’t a lot of residential properties yielding more than 13%. As such, even higher yielding investments (e.g., 4-6% p.a.) eat into an investors borrowing capacity.  

Lower yielding properties reduce your borrowing capacity by 25% 

I spoke to an investor recently that had invested in 3 properties. The aggregate value of these properties was $1.2 million, and the portfolio had $1 million of debt. The gross rental yield across the portfolio was around 5.2% p.a. This investor thought targeting high yielding properties would allow him to borrow more and buy more properties.  

It is true that higher yielding properties do increase your borrowing capacity. Let’s look at an example. I assumed each spouse earns $100k p.a. gross, an outstanding home loan of $350k, spend $5,500 per month on living expenses and have a credit card with a $5k limit. Based on these assumptions, I calculated their borrowing capacity as follows: 

  • If they achieve a gross rental yield of 5.5%, they can invest $1 million in property. 
  • If they achieve a gross rental yield of 3%, they can invest $815k, a reduction of 18.5%. 
  • If they achieve a gross rental yield of 2%, they can invest $750, a reduction of 25%.  

It’s all about the amount and quality of land 

Generally, a property’s accommodation size and quality will determine how much rental income it will attract. Therefore, to achieve a higher rental yield, you must spend proportionally more on building value, and less on land value. But doing so will mean that you will probably accumulate less wealth, as discussed here.  

Using the same assumptions that I used in this blog, I have calculated the amount of wealth an investor would accumulate if they invested in a property and sold it after 30 years, repaid the loan and paid any tax liability (CGT). The cash flow holding costs were also included in this calculation.  

As the chart below demonstrates, even though the investor that targeted a 2% rental yield and invested 25% less (i.e., $750k versus $1m), they accumulated almost twice as mu

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11511737 Wed, 19 Oct 2022 07:00:00 +1100 1023 Stuart Wemyss, ProSolution, Investopoly, Rules of the Lending Game, Property investing, Build wealth, RBA, cash rate, interest rates 231 full false Important changes to your borrowing capacity Important changes to your borrowing capacity Borrowing capacity has probably never been tighter in the 20 years since I started ProSolution! This is delaying investment plans for some clients. However, my expectation is that this is temporary and an easing in borrowing capacity might not be too far away.  

How borrowing capacity rules have changed over recent years 

In 2019, the banking regulator, APRA told banks to include a ‘serviceability buffer’ of at least 2.5% above the actual interest rate to test borrowing capacity. In October 2021, it increased this to a minimum of 3%, when actual interest rates were circa 2% p.a. 

Therefore, if you are applying for a home loan today, your repayments will be tested at a rate of around 7.55% p.a. P&I over 30 years. Interest-only investment loan applications are tested at an interest rate of circa 8.35% p.a. on a P&I basis over 25 years. This means benchmark repayments for a $1 million home loan would be $84k p.a. (compared to $61k p.a. for actual repayments), and almost $95k p.a. for an interest-only investment loan (compared to $54k p.a. for actual repayments). Therefore, benchmark repayments are now over 80% higher than actual repayments for interest-only investment loans. 

To give you some context, benchmark interest rates over the past 20 years have typically ranged between 6% and 7% p.a. It is probably unnecessary for benchmark interest rates to exceed circa 7% p.a. on a permanent basis. 

Rising interest rates reduces your borrowing capacity 

The issue is that the RBA has hiked rates so quickly i.e., 2.50% over the past 6 months and the banking regulator hasn’t adjusted its benchmark interest rate guidance accordingly. The 3% p.a. buffer was prudent when the cash rate was only 0.10% p.a. but arguably excessive now. 

For example, a borrower needs to demonstrate they have over $62,000 of surplus income to qualify for a $1 million investment loan to buy an investment property: 

·      Rental income @ 3% of property’s value shaded by 70% to allow for expenses = $20,000

·      Less P&I repayments on $1m @ 8.35% over 25 years = $95,450

·      Add back negative gearing tax benefit = $13,000

·      Cash surplus required = $62,450 (which equates to an income surplus of $100k p.a. before tax)

The RBA would like to see lending volumes fall 

It is noteworthy that new home loan volumes have been unsustainably high over the past two years, as illustrated in the chart below. New investment home loan volumes have been above average too, but not to the same extent as home loans. This increase in volume was no doubt stimulated by very low interest rates. Now that interest rates have increased, I anticipate volumes will contract and eventually return to normal levels. 

CHART

No changes expected until next year 

However, I don’t think the banking regulator will make any changes to serviceability benchmark interest rates until new home loan volumes normalise i.e., home loan volumes reduce to between the two blue horizonal lines in the above chart. I expect that will happen this year and therefore leave room for the regulator to normalise benchmark interest rates sometime next year. 

I suspect the RBA would be rather pleased that house prices have been cooling over the past 6 to 8 months, as it doesn’t want asset prices to become overheated. Changing the benchmark interest rate too early might restimulate demand for borrowing, which is why I don’t think the regulator (APRA) will make changes until next year. 

How you can maximise your borrowing capacity 

In the meantime, there may be some things you can d

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Borrowing capacity has probably never been tighter in the 20 years since I started ProSolution! This is delaying investment plans for some clients. However, my expectation is that this is temporary and an easing in borrowing capacity might not be too far away.  

How borrowing capacity rules have changed over recent years 

In 2019, the banking regulator, APRA told banks to include a ‘serviceability buffer’ of at least 2.5% above the actual interest rate to test borrowing capacity. In October 2021, it increased this to a minimum of 3%, when actual interest rates were circa 2% p.a. 

Therefore, if you are applying for a home loan today, your repayments will be tested at a rate of around 7.55% p.a. P&I over 30 years. Interest-only investment loan applications are tested at an interest rate of circa 8.35% p.a. on a P&I basis over 25 years. This means benchmark repayments for a $1 million home loan would be $84k p.a. (compared to $61k p.a. for actual repayments), and almost $95k p.a. for an interest-only investment loan (compared to $54k p.a. for actual repayments). Therefore, benchmark repayments are now over 80% higher than actual repayments for interest-only investment loans. 

To give you some context, benchmark interest rates over the past 20 years have typically ranged between 6% and 7% p.a. It is probably unnecessary for benchmark interest rates to exceed circa 7% p.a. on a permanent basis. 

Rising interest rates reduces your borrowing capacity 

The issue is that the RBA has hiked rates so quickly i.e., 2.50% over the past 6 months and the banking regulator hasn’t adjusted its benchmark interest rate guidance accordingly. The 3% p.a. buffer was prudent when the cash rate was only 0.10% p.a. but arguably excessive now. 

For example, a borrower needs to demonstrate they have over $62,000 of surplus income to qualify for a $1 million investment loan to buy an investment property: 

·      Rental income @ 3% of property’s value shaded by 70% to allow for expenses = $20,000

·      Less P&I repayments on $1m @ 8.35% over 25 years = $95,450

·      Add back negative gearing tax benefit = $13,000

·      Cash surplus required = $62,450 (which equates to an income surplus of $100k p.a. before tax)

The RBA would like to see lending volumes fall 

It is noteworthy that new home loan volumes have been unsustainably high over the past two years, as illustrated in the chart below. New investment home loan volumes have been above average too, but not to the same extent as home loans. This increase in volume was no doubt stimulated by very low interest rates. Now that interest rates have increased, I anticipate volumes will contract and eventually return to normal levels. 

CHART

No changes expected until next year 

However, I don’t think the banking regulator will make any changes to serviceability benchmark interest rates until new home loan volumes normalise i.e., home loan volumes reduce to between the two blue horizonal lines in the above chart. I expect that will happen this year and therefore leave room for the regulator to normalise benchmark interest rates sometime next year. 

I suspect the RBA would be rather pleased that house prices have been cooling over the past 6 to 8 months, as it doesn’t want asset prices to become overheated. Changing the benchmark interest rate too early might restimulate demand for borrowing, which is why I don’t think the regulator (APRA) will make changes until next year. 

How you can maximise your borrowing capacity 

In the meantime, there may be some things you can d

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11468215 Wed, 12 Oct 2022 07:00:00 +1100 977 Stuart Wemyss, ProSolution, Investopoly, Rules of the Lending Game, Property investing, Build wealth, borrowing capacity 230 full false 5 property investing mistakes I've seen over 20 years, and how to avoid them 5 property investing mistakes I've seen over 20 years, and how to avoid them One of the most interesting things I do is meet many investors every week (i.e., prospective clients). It is something that I have been doing regularly for almost 20 years, so I’ve literally spoken to thousands of investors. 

It is interesting because it provides me with the opportunity to reflect on peoples past investment decisions with the benefit of hindsight. There are some common themes. People tend to make one of a handful of mistakes. I think past mistakes provide very valuable learnings. 

Mistakes are predictable from the outset

I believe that all financial “mistakes” are completely avoidable. Virtually no financial mistakes (i.e., losses or underperformance) occur because of random bad luck. 

They are avoidable if you follow an evidence-based approach. For example, if your share investing methodology involves buying highly speculative stocks, then you only have yourself to blame if you don’t make any money after several years, because the evidence shows that speculation has a very low probability of generating reasonable returns over the long run.  

Therefore, based on my 20 years of experience, if you commit one of the mistakes below, there’s a very high probability that you’ll end up with a dud investment. Conversely, if you avoid all these mistakes, you maximise your chances of success. 

I must remind readers that I am completely independent. We do not buy property on behalf of clients, so I have no vested interest in you following the below advice. I am merely sharing what I have observed over the past two decades.  

(1) Buyers’ agents buying outside of their domicile State 

It is becoming more common for buyers’ agents to buy property interstate for clients. For example, a Sydney-based buyers’ agent might buy property in Brisbane. In my view, this is a no-no. 

One of the most important things I hope to benefit from when engaging the services of a buyers’ agent is their experience. I know that selecting the right property is part-art and part-science. 

The science part incudes all the objective considerations such as past growth, location, land size, land value, zoning/restrictions and so on. The objective assessment is driven mostly by data and a lot of this data is now available for a small cost online. I probably don’t need to pay a professional to collate such data. 

However, the art part of selecting a property is obsoletely critical. It requires local area knowledge. Things like, one side of a particular street under-performs, or a block of apartments has always experienced management problems. Or tenant turnover is too high because too many cars get broken into. These are all real examples that I have come across. If I am going to engage a buyers’ agent, I want them to have more than 10 years’ experience in buying property in a particular location. That will ensure they have experienced a few market cycles. They have learnt from past mistakes (we all make mistakes in the first years of practicing our craft). 

Given the subjective nature of property, experience is crucial to ensure you don’t make any costly mistakes. The more experience, the better. 

(2) Buying a development site without sufficient due diligence 

Some investors are attracted to developing property e.g., small-scale development such as building two or three townhouses. In theory it seems like an attractive way to make a quick profit. But it’s certainly not hands off and not without risk either. 

Unfortunately, a more recent trend I have come across involves investors buying development sites without undertaking enough due diligence. This has happened even if they used a buyers’ agent or not, which is unfortunate. Obviously, they used

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> One of the most interesting things I do is meet many investors every week (i.e., prospective clients). It is something that I have been doing regularly for almost 20 years, so I’ve literally spoken to thousands of investors. 

It is interesting because it provides me with the opportunity to reflect on peoples past investment decisions with the benefit of hindsight. There are some common themes. People tend to make one of a handful of mistakes. I think past mistakes provide very valuable learnings. 

Mistakes are predictable from the outset

I believe that all financial “mistakes” are completely avoidable. Virtually no financial mistakes (i.e., losses or underperformance) occur because of random bad luck. 

They are avoidable if you follow an evidence-based approach. For example, if your share investing methodology involves buying highly speculative stocks, then you only have yourself to blame if you don’t make any money after several years, because the evidence shows that speculation has a very low probability of generating reasonable returns over the long run.  

Therefore, based on my 20 years of experience, if you commit one of the mistakes below, there’s a very high probability that you’ll end up with a dud investment. Conversely, if you avoid all these mistakes, you maximise your chances of success. 

I must remind readers that I am completely independent. We do not buy property on behalf of clients, so I have no vested interest in you following the below advice. I am merely sharing what I have observed over the past two decades.  

(1) Buyers’ agents buying outside of their domicile State 

It is becoming more common for buyers’ agents to buy property interstate for clients. For example, a Sydney-based buyers’ agent might buy property in Brisbane. In my view, this is a no-no. 

One of the most important things I hope to benefit from when engaging the services of a buyers’ agent is their experience. I know that selecting the right property is part-art and part-science. 

The science part incudes all the objective considerations such as past growth, location, land size, land value, zoning/restrictions and so on. The objective assessment is driven mostly by data and a lot of this data is now available for a small cost online. I probably don’t need to pay a professional to collate such data. 

However, the art part of selecting a property is obsoletely critical. It requires local area knowledge. Things like, one side of a particular street under-performs, or a block of apartments has always experienced management problems. Or tenant turnover is too high because too many cars get broken into. These are all real examples that I have come across. If I am going to engage a buyers’ agent, I want them to have more than 10 years’ experience in buying property in a particular location. That will ensure they have experienced a few market cycles. They have learnt from past mistakes (we all make mistakes in the first years of practicing our craft). 

Given the subjective nature of property, experience is crucial to ensure you don’t make any costly mistakes. The more experience, the better. 

(2) Buying a development site without sufficient due diligence 

Some investors are attracted to developing property e.g., small-scale development such as building two or three townhouses. In theory it seems like an attractive way to make a quick profit. But it’s certainly not hands off and not without risk either. 

Unfortunately, a more recent trend I have come across involves investors buying development sites without undertaking enough due diligence. This has happened even if they used a buyers’ agent or not, which is unfortunate. Obviously, they used

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11432427 Wed, 05 Oct 2022 07:00:00 +1100 1034 Stuart Wemyss, ProSolution, Investopoly, Rules of the Lending Game, Property investing, Mistakes 229 full false Focusing on rental income could cost you $1m in lost wealth Focusing on rental income could cost you $1m in lost wealth An investment property’s total investment return will consist of rental income plus capital growth. I have written about the importance of maximising capital growth many times. However, often investors are tempted to focus attention on income (when selecting an investment property) too, as they seek to minimise the cash flow cost of holding the investment property.

I propose that this is a mistake with a high opportunity cost. The reason investors make this mistake could be due to (1) not fully appreciating the consequences of their decision, (2) need to adjust their target property attributes or (3) need to reduce their investment budget.

Focusing on income means you must spend more on the building value

The value of a property consists of two components being the land plus any improvements i.e., the dwelling. Generally, land appreciates in value whereas buildings depreciate over time due to wear and tear, which I have written about here.

The table below illustrates this point. If you aim to achieve an overall capital growth rate of 7% p.a. to 8% p.a., which is a reasonable expectation for an investment grade property, then the more you spend on the building value, the greater the rate of land value appreciation you will need to achieve an overall rate of growth of 7-8% p.a. 

TABLE
In summary, investors should focus on land value whereas tenants focus on the quality the dwelling.

Opportunity cost of focusing on income

It us unrealistic to expect an investment property to return more than 10% p.a. in total over a long period of time. That is, the gross rental yield plus capital growth rate cannot exceed 10% p.a. Typically, properties that offer higher rental yields will almost always deliver lower growth. This makes sense given the building value drives income but not capital growth.

Therefore, an investor can manipulate the makeup of their return (i.e., how much income and growth they may receive) by targeting different types of property.

The chart below compares the wealth impact of various combinations of income and growth. At the extreme (left-hand side), an invest

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> An investment property’s total investment return will consist of rental income plus capital growth. I have written about the importance of maximising capital growth many times. However, often investors are tempted to focus attention on income (when selecting an investment property) too, as they seek to minimise the cash flow cost of holding the investment property.

I propose that this is a mistake with a high opportunity cost. The reason investors make this mistake could be due to (1) not fully appreciating the consequences of their decision, (2) need to adjust their target property attributes or (3) need to reduce their investment budget.

Focusing on income means you must spend more on the building value

The value of a property consists of two components being the land plus any improvements i.e., the dwelling. Generally, land appreciates in value whereas buildings depreciate over time due to wear and tear, which I have written about here.

The table below illustrates this point. If you aim to achieve an overall capital growth rate of 7% p.a. to 8% p.a., which is a reasonable expectation for an investment grade property, then the more you spend on the building value, the greater the rate of land value appreciation you will need to achieve an overall rate of growth of 7-8% p.a. 

TABLE
In summary, investors should focus on land value whereas tenants focus on the quality the dwelling.

Opportunity cost of focusing on income

It us unrealistic to expect an investment property to return more than 10% p.a. in total over a long period of time. That is, the gross rental yield plus capital growth rate cannot exceed 10% p.a. Typically, properties that offer higher rental yields will almost always deliver lower growth. This makes sense given the building value drives income but not capital growth.

Therefore, an investor can manipulate the makeup of their return (i.e., how much income and growth they may receive) by targeting different types of property.

The chart below compares the wealth impact of various combinations of income and growth. At the extreme (left-hand side), an invest

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11383655 Wed, 28 Sep 2022 07:00:00 +1000 802 Stuart Wemyss, ProSolution, Investopoly, Rules of the Lending Game, Property investing, Build wealth, investment risk, risk profile 228 full false How should you invest your cash savings? How should you invest your cash savings? Often people wonder whether they should be doing more with their cash savings other than leaving them in a savings account. This blog discusses some options and highlights some considerations with each option. 

Of course, the information contained in this blog is not personalised advice as it cannot consider your unique situation and goals. As such, you should always consider obtaining personal independent financial advice before making any financial decisions. 

Maintain a buffer equal to 6 to 12 months of living expenses

I typically counsel my clients to hold between 6 and 12 months of living expenses in cash savings in case of emergencies. If your income or expenses can be volatile, you should probably hold 12 (or more) months. 

Therefore, the options discussed below apply to any cash savings you may hold in excess of this buffer amount. 

Contribute into super

You can contribute savings into super either through making concessional (up to an annual cap of $27,500 per person) and/or non-concessional (annual cap is $110,000) contributions. 

The benefits of moving savings inside super are twofold. Firstly, it’s a low-tax environment where investment earnings are taxed at a flat rate of 15% and capital gains at only 10%. If you are a high-income earner, it will save tax. Secondly, it will be automatically invested for you in line with your selected investment option e.g., balanced, growth, etc., so it’s a very simple, hands-off way to invest your savings. 

The downside to contributing money into super is that you cannot access it until you are older than 60[1] and retired (or 65 if you are still working). Whether this is a potential problem depends on (1) how close you are to being able to access super if you need it and (2) the likelihood of needing to access these monies e.g., if you have plenty of financial resources outside of super, then the likelihood is probably low.   

If you are going to move your savings into super, please make sure that your super fund is performing well. 

Invest in hybrid securities 

A hybrid security is a type of investment that combines bond and share (equity) characteristics. It usually pays a monthly income, like a bond (via a dividend payment). These dividends typically have imputation (franking/tax) credits attached to them, like a share. They will be issued for a fixed term i.e.; they mature like a bond. Subject to certain trigger events, hybrid securities can convert into ordinary shares e.g., bank hybrids will convert into shares if liquidity ratios fall below a certain level. 

Rarely are two hybrid instruments the same – they all have unique and complex terms. Therefore, I don’t invest in these instruments directly. 

You can mitigate many of these risks and the associated complexity by investing in a managed fund that manages a portfolio of hybrid equities. This will provide you with diversification and the manager will price-in/analyse any conversion risks, thereby minimising your investment risks

We often use BetaShares Active Australian Hybrids Fund (HBRD) to invest client’s monies. It has paid a monthly yield (income) of 5.19% p.a. over the past 12 months (including imputation credits i.e., that is a pre-tax return). This yield is indirectly linked to the RBA’s cash rate. It is important to highlight that the capital value of this fund can vary, but often by only 1% to 2%. However, over longer periods of time, it is reasonable to expect the capital val

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Often people wonder whether they should be doing more with their cash savings other than leaving them in a savings account. This blog discusses some options and highlights some considerations with each option. 

Of course, the information contained in this blog is not personalised advice as it cannot consider your unique situation and goals. As such, you should always consider obtaining personal independent financial advice before making any financial decisions. 

Maintain a buffer equal to 6 to 12 months of living expenses

I typically counsel my clients to hold between 6 and 12 months of living expenses in cash savings in case of emergencies. If your income or expenses can be volatile, you should probably hold 12 (or more) months. 

Therefore, the options discussed below apply to any cash savings you may hold in excess of this buffer amount. 

Contribute into super

You can contribute savings into super either through making concessional (up to an annual cap of $27,500 per person) and/or non-concessional (annual cap is $110,000) contributions. 

The benefits of moving savings inside super are twofold. Firstly, it’s a low-tax environment where investment earnings are taxed at a flat rate of 15% and capital gains at only 10%. If you are a high-income earner, it will save tax. Secondly, it will be automatically invested for you in line with your selected investment option e.g., balanced, growth, etc., so it’s a very simple, hands-off way to invest your savings. 

The downside to contributing money into super is that you cannot access it until you are older than 60[1] and retired (or 65 if you are still working). Whether this is a potential problem depends on (1) how close you are to being able to access super if you need it and (2) the likelihood of needing to access these monies e.g., if you have plenty of financial resources outside of super, then the likelihood is probably low.   

If you are going to move your savings into super, please make sure that your super fund is performing well. 

Invest in hybrid securities 

A hybrid security is a type of investment that combines bond and share (equity) characteristics. It usually pays a monthly income, like a bond (via a dividend payment). These dividends typically have imputation (franking/tax) credits attached to them, like a share. They will be issued for a fixed term i.e.; they mature like a bond. Subject to certain trigger events, hybrid securities can convert into ordinary shares e.g., bank hybrids will convert into shares if liquidity ratios fall below a certain level. 

Rarely are two hybrid instruments the same – they all have unique and complex terms. Therefore, I don’t invest in these instruments directly. 

You can mitigate many of these risks and the associated complexity by investing in a managed fund that manages a portfolio of hybrid equities. This will provide you with diversification and the manager will price-in/analyse any conversion risks, thereby minimising your investment risks

We often use BetaShares Active Australian Hybrids Fund (HBRD) to invest client’s monies. It has paid a monthly yield (income) of 5.19% p.a. over the past 12 months (including imputation credits i.e., that is a pre-tax return). This yield is indirectly linked to the RBA’s cash rate. It is important to highlight that the capital value of this fund can vary, but often by only 1% to 2%. However, over longer periods of time, it is reasonable to expect the capital val

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11342765 Wed, 21 Sep 2022 07:00:00 +1000 974 Stuart Wemyss, ProSolution, Investopoly, Rules of the Lending Game, Property investing, Build wealth, cash rate, interest rates 227 full false Four rules you must follow to ensure you prosper 5 years from now Four rules you must follow to ensure you prosper 5 years from now I wrote a blog in May warning investors to prepare for lots of bad news, uncertainty and market volatility. My thesis was that rising inflation, supply chain issues and rising rates would cause economic pain. Unfortunately, my prediction was correct, and we should expect the volatility to continue for many more months to come. 

It is possible that all you may see are risks and problems at the moment. But in 5 years from now, it is likely you’ll look back and see lots of (missed) opportunities because the rear vision mirror is always clearer than the windscreen. 

I’d like to share four rules which can help guide you to make great investment decisions over the course of the next year, and the rest of your life. 

Missing the best days of the market is a good lesson and a perfect metaphor

There are lots of charts that demonstrate that if you miss the 10 best days in the share market over a long period of time (say 10 years), it will have a dramatic negative impact on your overall investment returns i.e., you will earn half the returns or less. This chart is a good example. 

The lesson is that no one can pick the best days and the worst days. Therefore, if you sell your investments because you are concerned about volatility, you will inevitably miss the best days (best returns) and your overall performance will suffer. 

Another way to look at it is, that the best returns come in the years following a stock market decline. The chart below, which covers almost one century of data, illustrates this very eloquently (produced by Dimensional).  

 CHART

This concept applies to all markets and asset classes including residential property. 

Understand that volatility is normal

The event or issue that causes volatility (i.e., market uncertainty) is always unique and unpredictable. An event must be unpredictable to cause the market to fall dramatically because predictable events/issues are already systematically reflected in share prices. 

Volatility is normal and it should be expected. Volatility is a very important part of price discovery which ensures the market adequately reflects risks and opportunities. Volatility also aids investment strategies through long horizon mean reversion and/or dollar cost averaging. It is something that should be embraced, not feared. 

No one can tell you what will happen in the short term 

No one in the world has ever developed a reliable methodology to predict short-term asset class returns. The truth is that no one knows what will happen over the next few months. This chart demonstrates how random returns are. Therefore, that must be your starting assumption when making any investment decisions i.e., you don’t know what will happen in the short term. 

If you agree that we cannot predict what will happen in the short-term, then your only option is to ignore the short term and focus on the long run. 

Four rules to help you through volatile times 

A rules-based approach towards investing is easy to adopt because it guides clear decision making and avoids your decisions being unhelpfully influenced by emotions. And if the investment rules that you follow are routed in evidence-based methodologies, it further helps reduce your risks, as I’ve discussed

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> I wrote a blog in May warning investors to prepare for lots of bad news, uncertainty and market volatility. My thesis was that rising inflation, supply chain issues and rising rates would cause economic pain. Unfortunately, my prediction was correct, and we should expect the volatility to continue for many more months to come. 

It is possible that all you may see are risks and problems at the moment. But in 5 years from now, it is likely you’ll look back and see lots of (missed) opportunities because the rear vision mirror is always clearer than the windscreen. 

I’d like to share four rules which can help guide you to make great investment decisions over the course of the next year, and the rest of your life. 

Missing the best days of the market is a good lesson and a perfect metaphor

There are lots of charts that demonstrate that if you miss the 10 best days in the share market over a long period of time (say 10 years), it will have a dramatic negative impact on your overall investment returns i.e., you will earn half the returns or less. This chart is a good example. 

The lesson is that no one can pick the best days and the worst days. Therefore, if you sell your investments because you are concerned about volatility, you will inevitably miss the best days (best returns) and your overall performance will suffer. 

Another way to look at it is, that the best returns come in the years following a stock market decline. The chart below, which covers almost one century of data, illustrates this very eloquently (produced by Dimensional).  

 CHART

This concept applies to all markets and asset classes including residential property. 

Understand that volatility is normal

The event or issue that causes volatility (i.e., market uncertainty) is always unique and unpredictable. An event must be unpredictable to cause the market to fall dramatically because predictable events/issues are already systematically reflected in share prices. 

Volatility is normal and it should be expected. Volatility is a very important part of price discovery which ensures the market adequately reflects risks and opportunities. Volatility also aids investment strategies through long horizon mean reversion and/or dollar cost averaging. It is something that should be embraced, not feared. 

No one can tell you what will happen in the short term 

No one in the world has ever developed a reliable methodology to predict short-term asset class returns. The truth is that no one knows what will happen over the next few months. This chart demonstrates how random returns are. Therefore, that must be your starting assumption when making any investment decisions i.e., you don’t know what will happen in the short term. 

If you agree that we cannot predict what will happen in the short-term, then your only option is to ignore the short term and focus on the long run. 

Four rules to help you through volatile times 

A rules-based approach towards investing is easy to adopt because it guides clear decision making and avoids your decisions being unhelpfully influenced by emotions. And if the investment rules that you follow are routed in evidence-based methodologies, it further helps reduce your risks, as I’ve discussed

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11308573 Wed, 14 Sep 2022 07:00:00 +1000 835 Stuart Wemyss, ProSolution, Investopoly, Rules of the Lending Game, Property investing, share market 226 full false Overinvesting puts retirement at risk Overinvesting puts retirement at risk A Goldilocks investment strategy means that you are making the most of your financial opportunities without overdoing it and taking unnecessary risk. That is, your level of investing is exactly right (i.e., perfectly balanced).  

Underinvesting means that you risk not having enough investment assets to enjoy a comfortable retirement.  

Overinvesting means that you have taken unacceptable risks which may compromise your ability to achieve a comfortable retirement.  

The goal is to achieve a perfect balance – invest enough to ensure you will meet your lifestyle goals – but not too much that you put your lifestyle goals at risk.  

Overinvesting can do a lot of harm 

I recall working with a mortgage broking client (not financial planning) for several years prior to 2008. The client purchased 6 investment-grade properties over a relatively short period. After the sixth acquisition, I advised the client to not purchase anymore properties, as I felt taking on more debt would be too risky. The client ignored my advice and purchased two more investment properties – which I only found out about after the fact!  

Unfortunately, the GFC hit Australian shores in 2008/2009 and the RBA cash rate climbed to 7.25% which put pressure on the client’s cash flow. Worse still, credit rules and policies were rightfully tightened which locked this client out of their ability to refinance. The client had no choice other than to sell all but two of their properties in the years following 2010 because they wanted to retire.  

This client’s story is a perfect cautionary tale. Debt is a wonderful servant, but a terrible master. Borrowing to invest can be a very powerful and beneficial strategy but it must be used carefully. You must never borrow more than you can afford and should consider your ability to service repayments when interest rates rise. For example, what if you are forced to eventually repay principal and interest. Or due to borrowing capacity, you can’t refinance e.g., you are trapped at your current lender. You must consider these risks.   

Underinvesting comes with great opportunity cost 

Arguably, underinvesting is just as bad as overinvesting. Underinvesting means that you risk not accumulating sufficient investment assets to achieve your lifestyle goals i.e., funding a comfortable retirement.  

I wrote a blog earlier this year (here) setting out the three common reasons that tend to cause people to underinvest. It’s worth reading if you suspect that you have underinvested.  

Invest enough to achieve your goals

If you are already going to achieve your goals with the investments that you currently own, why invest more? Investing always carries some risk, so why exposure yourself to greater risk if it’s not going to have a positive impact on your life?  

Some people will argue that it’s prudent to ensure that your money’s working hard for you.  

Other people are driven to continue to invest so that can leave more money to their beneficiaries.  

I don’t think there’s a right or wrong answer to the question of; how much is enough? It really depends on your circumstances and risk tolerance.  

However, it is worth considering a few things. Firstly, whether it’s necessary to invest more to achieve your goals. If not, are there any other reasons to invest more e.g., to provide more for beneficiaries.    

How much debt is too much? 

Typically, the most common way people overinvest is by borrowing too much (e.g., the client story that I shared above). There are several factors to determine the right level of borrowings for your circumstances and goals.  

Of course, the obvious consideration i

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> A Goldilocks investment strategy means that you are making the most of your financial opportunities without overdoing it and taking unnecessary risk. That is, your level of investing is exactly right (i.e., perfectly balanced).  

Underinvesting means that you risk not having enough investment assets to enjoy a comfortable retirement.  

Overinvesting means that you have taken unacceptable risks which may compromise your ability to achieve a comfortable retirement.  

The goal is to achieve a perfect balance – invest enough to ensure you will meet your lifestyle goals – but not too much that you put your lifestyle goals at risk.  

Overinvesting can do a lot of harm 

I recall working with a mortgage broking client (not financial planning) for several years prior to 2008. The client purchased 6 investment-grade properties over a relatively short period. After the sixth acquisition, I advised the client to not purchase anymore properties, as I felt taking on more debt would be too risky. The client ignored my advice and purchased two more investment properties – which I only found out about after the fact!  

Unfortunately, the GFC hit Australian shores in 2008/2009 and the RBA cash rate climbed to 7.25% which put pressure on the client’s cash flow. Worse still, credit rules and policies were rightfully tightened which locked this client out of their ability to refinance. The client had no choice other than to sell all but two of their properties in the years following 2010 because they wanted to retire.  

This client’s story is a perfect cautionary tale. Debt is a wonderful servant, but a terrible master. Borrowing to invest can be a very powerful and beneficial strategy but it must be used carefully. You must never borrow more than you can afford and should consider your ability to service repayments when interest rates rise. For example, what if you are forced to eventually repay principal and interest. Or due to borrowing capacity, you can’t refinance e.g., you are trapped at your current lender. You must consider these risks.   

Underinvesting comes with great opportunity cost 

Arguably, underinvesting is just as bad as overinvesting. Underinvesting means that you risk not accumulating sufficient investment assets to achieve your lifestyle goals i.e., funding a comfortable retirement.  

I wrote a blog earlier this year (here) setting out the three common reasons that tend to cause people to underinvest. It’s worth reading if you suspect that you have underinvested.  

Invest enough to achieve your goals

If you are already going to achieve your goals with the investments that you currently own, why invest more? Investing always carries some risk, so why exposure yourself to greater risk if it’s not going to have a positive impact on your life?  

Some people will argue that it’s prudent to ensure that your money’s working hard for you.  

Other people are driven to continue to invest so that can leave more money to their beneficiaries.  

I don’t think there’s a right or wrong answer to the question of; how much is enough? It really depends on your circumstances and risk tolerance.  

However, it is worth considering a few things. Firstly, whether it’s necessary to invest more to achieve your goals. If not, are there any other reasons to invest more e.g., to provide more for beneficiaries.    

How much debt is too much? 

Typically, the most common way people overinvest is by borrowing too much (e.g., the client story that I shared above). There are several factors to determine the right level of borrowings for your circumstances and goals.  

Of course, the obvious consideration i

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11220133 Wed, 07 Sep 2022 07:00:00 +1000 645 Stuart Wemyss, ProSolution, Investopoly, Rules of the Lending Game, financial advice, financial advisors, independent advice, 225 full false Average incomes can’t drive property prices perpetually higher Average incomes can’t drive property prices perpetually higher  Commentators often refer to the price of property in Australia relative to household incomes. They highlight that property prices have risen two to three times faster than household incomes. They conclude that property growth cannot exceed income growth perpetually.  

Obviously, this is unsustainable at a macro level. I’ve written about the factors that contributed to property price growth over the past few decades here. But many of these factors won’t repeat themselves over future decades. 

However, I argue that this commentary isn’t relevant to investors if they invest in investment-grade property. My thesis is that if you invest in locations that attract the wealthiest 20% of Australians, it is likely you will enjoy an above average capital growth rate. 

Wealth inequality is a terrible phenomenon

Wealth inequality means that the rich get richer, and the poor get poorer in a real and relative sense. It makes escaping poverty more difficult. It robs people of equal opportunities. It’s a terrible phenomenon. 

The chart below demonstrates how significant wealth inequality is in Australia. The wealthiest 20% of Australian’s own more than 73% of the total personal wealth in Australia – the 80/20 rule at play. 

 CHART

It would be lovely to think that Australia will create greater wealth equality in the future, but unfortunately, I don’t think it’s likely. In fact, wealth inequality is likely to get worse, not better. Unfortunately, Covid exacerbated it as higher income earners were typically able to work from home. Rising interest rates and inflation are much less of a concern to wealthier and/or higher income earners.  All these things make wealth inequality worse. 

Therefore, when making investment decisions, it’s prudent and advisable to assume that wealth inequality will continue. If it does, its likely property price growth rates in blue-chip locations which attract the wealthiest Australians, will materially exceed outer suburbs.  

Is there a relationship between average suburb owners’ income and capital growth?

The theory is that if you invest in suburbs where the occupants earn above average incomes (based on census data or similar), then those suburbs will experience higher rates of growth because occupants can afford to pay more. Whilst this sounds logical, in reality, income data is hard to measure accurately, and it's only one component that determines a property buyers’ capacity. This article explored the shortcomings of relying on income data. 

Therefore, investing in property isn’t just about investing in locations that attract higher income earners. 

Beware of being too data driven 

I have written previously that investing in property successfully requires an approach that is almost equal parts art and science. The science element relates to data and analysis – all the objective factors and considerations. 

However, relying on data and analysis alone is too risky, as not all data is reliable or meaningful. Data can be out-of-date or not representative of the factor you are trying to measure. And its only half the picture. 

The art element is the property know-how including understanding the market, what typical buyers are looking for, being an expert in a geographical location and so on. For example, sometimes there’s no objective reason why some streets (locations) perennially underperform – sometimes

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]>  Commentators often refer to the price of property in Australia relative to household incomes. They highlight that property prices have risen two to three times faster than household incomes. They conclude that property growth cannot exceed income growth perpetually.  

Obviously, this is unsustainable at a macro level. I’ve written about the factors that contributed to property price growth over the past few decades here. But many of these factors won’t repeat themselves over future decades. 

However, I argue that this commentary isn’t relevant to investors if they invest in investment-grade property. My thesis is that if you invest in locations that attract the wealthiest 20% of Australians, it is likely you will enjoy an above average capital growth rate. 

Wealth inequality is a terrible phenomenon

Wealth inequality means that the rich get richer, and the poor get poorer in a real and relative sense. It makes escaping poverty more difficult. It robs people of equal opportunities. It’s a terrible phenomenon. 

The chart below demonstrates how significant wealth inequality is in Australia. The wealthiest 20% of Australian’s own more than 73% of the total personal wealth in Australia – the 80/20 rule at play. 

 CHART

It would be lovely to think that Australia will create greater wealth equality in the future, but unfortunately, I don’t think it’s likely. In fact, wealth inequality is likely to get worse, not better. Unfortunately, Covid exacerbated it as higher income earners were typically able to work from home. Rising interest rates and inflation are much less of a concern to wealthier and/or higher income earners.  All these things make wealth inequality worse. 

Therefore, when making investment decisions, it’s prudent and advisable to assume that wealth inequality will continue. If it does, its likely property price growth rates in blue-chip locations which attract the wealthiest Australians, will materially exceed outer suburbs.  

Is there a relationship between average suburb owners’ income and capital growth?

The theory is that if you invest in suburbs where the occupants earn above average incomes (based on census data or similar), then those suburbs will experience higher rates of growth because occupants can afford to pay more. Whilst this sounds logical, in reality, income data is hard to measure accurately, and it's only one component that determines a property buyers’ capacity. This article explored the shortcomings of relying on income data. 

Therefore, investing in property isn’t just about investing in locations that attract higher income earners. 

Beware of being too data driven 

I have written previously that investing in property successfully requires an approach that is almost equal parts art and science. The science element relates to data and analysis – all the objective factors and considerations. 

However, relying on data and analysis alone is too risky, as not all data is reliable or meaningful. Data can be out-of-date or not representative of the factor you are trying to measure. And its only half the picture. 

The art element is the property know-how including understanding the market, what typical buyers are looking for, being an expert in a geographical location and so on. For example, sometimes there’s no objective reason why some streets (locations) perennially underperform – sometimes

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11220078 Wed, 31 Aug 2022 07:00:00 +1000 602 Stuart Wemyss, ProSolution, Investopoly, Rules of the Lending Game, Property investing, Build wealth, wealth inequality 224 full false There's no need to take a lot of investment risks There's no need to take a lot of investment risks I believe that most people have a very similar tolerance for investment risk.  Most people are comfortable achieving a long-term annual return of 7% to 10% if the risk of losing money is very low. In short, I think most people have a low appetite for risk – they prefer to take as little risk as possible and invest in a “sure thing” if the return will be enough for them to meet their goals. 

What is a risk profile

Risk is the probability of not achieving your targeted investment returns. This might happen in two ways. 

Firstly, the investment might end up being a dud with little prospects of ever delivering the returns you desire i.e., an investment mistake. 

Secondly, you might not achieve your returns temporarily, due to intermittent volatility. For example, if you invested in the Australian share market in May 2021, your return just over one year later is zero, as over that time, the market risen, fallen, and subsequently recovered back to May 2021 levels (ignoring dividend income). But this volatility is almost certainly temporary. We know that over multiyear periods (e.g., a decade or longer), the market has always trended higher. 

Most people are only concerned by the first risk because they know volatility is normal and are happy to endure it if they will be rewarded adequately in the long run. 

That said, some people, albeit a minority, have a low tolerance for intermittent volatility. 

How do you measure your risk profile 

The traditional way to measure risk tolerance is by asking a series of hypothetical questions to measure your comfort/discomfort with experiencing volatility and investment losses. This questionnaire is a good example, which we use in our practice (it’s based on this paper). 

However, I am skeptical that these questionnaires provide reliable information. It’s one thing to predict how you’d feel if your investments fell by 30% of value, but until your experience it, you don’t know for sure. We know that humans have a strong cognitive bias for loss aversion – the pain of losing is psychologically twice as powerful as the pleasure of gaining. 

95% of people have the same profile 

I describe most people’s risk tolerance below (including my own): 

I work hard for my money, so I don’t want to take high risks and risk losing it. I’d be happy to generate a long-term investment return of 7-10% p.a. as I know that if I do that, it will help me build substantial wealth over many decades. But I want to take as little risk as possible to achieve that. 

Warren Buffett famously has two rules for investing. In essence, he counsels investors to not take huge risks. Don’t gamble with your money. Only invest if you are convinced that there’s plenty of upside and very little (no) downside risks.   

5% of people have very different risk appetites 

There are always outliers. Some people will have a very low tolerance for risk and therefore should skew their investments towards safer, low-volatility asset classes. 

Conversely, some investors have a very high-risk tolerance and enjoy “betting the farm” in the pursuit of high returns. 

But both cohorts constitute a very small minority, arguably even less than 5% of all investors. 

At some point, capital preservation becomes more important than capital returns 

Investors know that they must be prepared to take some risk to generate inves

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> I believe that most people have a very similar tolerance for investment risk.  Most people are comfortable achieving a long-term annual return of 7% to 10% if the risk of losing money is very low. In short, I think most people have a low appetite for risk – they prefer to take as little risk as possible and invest in a “sure thing” if the return will be enough for them to meet their goals. 

What is a risk profile

Risk is the probability of not achieving your targeted investment returns. This might happen in two ways. 

Firstly, the investment might end up being a dud with little prospects of ever delivering the returns you desire i.e., an investment mistake. 

Secondly, you might not achieve your returns temporarily, due to intermittent volatility. For example, if you invested in the Australian share market in May 2021, your return just over one year later is zero, as over that time, the market risen, fallen, and subsequently recovered back to May 2021 levels (ignoring dividend income). But this volatility is almost certainly temporary. We know that over multiyear periods (e.g., a decade or longer), the market has always trended higher. 

Most people are only concerned by the first risk because they know volatility is normal and are happy to endure it if they will be rewarded adequately in the long run. 

That said, some people, albeit a minority, have a low tolerance for intermittent volatility. 

How do you measure your risk profile 

The traditional way to measure risk tolerance is by asking a series of hypothetical questions to measure your comfort/discomfort with experiencing volatility and investment losses. This questionnaire is a good example, which we use in our practice (it’s based on this paper). 

However, I am skeptical that these questionnaires provide reliable information. It’s one thing to predict how you’d feel if your investments fell by 30% of value, but until your experience it, you don’t know for sure. We know that humans have a strong cognitive bias for loss aversion – the pain of losing is psychologically twice as powerful as the pleasure of gaining. 

95% of people have the same profile 

I describe most people’s risk tolerance below (including my own): 

I work hard for my money, so I don’t want to take high risks and risk losing it. I’d be happy to generate a long-term investment return of 7-10% p.a. as I know that if I do that, it will help me build substantial wealth over many decades. But I want to take as little risk as possible to achieve that. 

Warren Buffett famously has two rules for investing. In essence, he counsels investors to not take huge risks. Don’t gamble with your money. Only invest if you are convinced that there’s plenty of upside and very little (no) downside risks.   

5% of people have very different risk appetites 

There are always outliers. Some people will have a very low tolerance for risk and therefore should skew their investments towards safer, low-volatility asset classes. 

Conversely, some investors have a very high-risk tolerance and enjoy “betting the farm” in the pursuit of high returns. 

But both cohorts constitute a very small minority, arguably even less than 5% of all investors. 

At some point, capital preservation becomes more important than capital returns 

Investors know that they must be prepared to take some risk to generate inves

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11182834 Wed, 24 Aug 2022 07:00:00 +1000 824 Stuart Wemyss, ProSolution, Investopoly, Rules of the Lending Game, Property investing, Build wealth, investment risk, risk profile 223 full false Why obtaining quality financial advice will become even more difficult Why obtaining quality financial advice will become even more difficult  Most people would say that finding a good financial advisor has always been a difficult task. Ten years ago, most financial planners received commissions for remuneration, so clients had to navigate endless conflicts of interest. Thankfully, investment commissions no longer exist. The challenge is now finding an advisor with well-rounded experience. 

Commissions are banned – it's more about experience and scope

Financial advisors use to receive commissions from managed fund providers which created a conflict of interest, as data showed that they’d only recommend the funds that paid commissions, and the higher fees (resulting from the cost of paying this commissions) greatly diminished net investment returns. In essence, commissions incentivised planners to recommend poor quality investments (managed funds). 

Commissions on new investments were banned in 2014 and on existing (grandfathered) investments in 2018. Financial advisors now cannot accept conflicted remuneration arrangements by law e.g., commissions. 

Obviously, this was a massive step forward because the existence of commissions was almost wholly responsible for all the poor advice outcomes that people experienced. In a commission-based (or any conflict of interest) world, most advisors core competency was salesmanship, not delivering quality financial advice. But most unsuspecting customers didn’t realise this – often planners were wolves in sheep’s clothing. 

This has changed now. Financial advisors no longer need to sell, just advise. Therefore, in my view, when choosing an advisor, you must consider (1) whether they have enough experience and (2) whether the scope of their advice maximises your opportunity i.e., knowledge. 

With respect to scope, I’m a staunch believer that holistic advice maximises value, as discussed here (where I shared 6 case client studies). High quality advice is multifaceted because it includes many considerations including tax, super, estate planning, insurance/risk and so on. 

The mass exodus of advisors will take years to repair 

There have been several changes in the financial planning industry which have resulted in a mass exodus of advisors. In 2018 there were about 28,000 financial advisors in Australia. Around 40% of these advisors have already left the industry and it is predicted that advisor numbers will fall to circa 13,000 by the end of next year. 

Of course, there were many shoddy financial advisors that really needed to leave the industry, so that’s a good thing. But more than halving the number of advisors in only five years is a terrible outcome for Australians. Imagine if that happened with lawyers, accountants, or doctors. 

The problem is that as older, more experienced advisors leave the industry, there aren’t enough intermediate advisors to eventually take their place. You can’t replicate decades of experience overnight – there are no shortcuts. Therefore, the financial advisor shortage will get worse before it gets better. A lot worse! 

Robo-advice has limited application 

Robo-advice solutions have been lauded as a cheaper alternative to personal financial advice. Robo-advice is an algorithm-driven software tool that makes recommendations based on the answers to a series of questions. Currently, robo-advice tools provide very limited solutions. 

The problem with robo-advice is that it’s a very logical tool. However, the study of behavioural finance tells us that financial decisions can be heavily influenced by emotions. Often, it is difficult to change someone’s mind with logic alone, especially if they did not use logic to make their original decisions. In this situation, a human-to-human relat

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]>  Most people would say that finding a good financial advisor has always been a difficult task. Ten years ago, most financial planners received commissions for remuneration, so clients had to navigate endless conflicts of interest. Thankfully, investment commissions no longer exist. The challenge is now finding an advisor with well-rounded experience. 

Commissions are banned – it's more about experience and scope

Financial advisors use to receive commissions from managed fund providers which created a conflict of interest, as data showed that they’d only recommend the funds that paid commissions, and the higher fees (resulting from the cost of paying this commissions) greatly diminished net investment returns. In essence, commissions incentivised planners to recommend poor quality investments (managed funds). 

Commissions on new investments were banned in 2014 and on existing (grandfathered) investments in 2018. Financial advisors now cannot accept conflicted remuneration arrangements by law e.g., commissions. 

Obviously, this was a massive step forward because the existence of commissions was almost wholly responsible for all the poor advice outcomes that people experienced. In a commission-based (or any conflict of interest) world, most advisors core competency was salesmanship, not delivering quality financial advice. But most unsuspecting customers didn’t realise this – often planners were wolves in sheep’s clothing. 

This has changed now. Financial advisors no longer need to sell, just advise. Therefore, in my view, when choosing an advisor, you must consider (1) whether they have enough experience and (2) whether the scope of their advice maximises your opportunity i.e., knowledge. 

With respect to scope, I’m a staunch believer that holistic advice maximises value, as discussed here (where I shared 6 case client studies). High quality advice is multifaceted because it includes many considerations including tax, super, estate planning, insurance/risk and so on. 

The mass exodus of advisors will take years to repair 

There have been several changes in the financial planning industry which have resulted in a mass exodus of advisors. In 2018 there were about 28,000 financial advisors in Australia. Around 40% of these advisors have already left the industry and it is predicted that advisor numbers will fall to circa 13,000 by the end of next year. 

Of course, there were many shoddy financial advisors that really needed to leave the industry, so that’s a good thing. But more than halving the number of advisors in only five years is a terrible outcome for Australians. Imagine if that happened with lawyers, accountants, or doctors. 

The problem is that as older, more experienced advisors leave the industry, there aren’t enough intermediate advisors to eventually take their place. You can’t replicate decades of experience overnight – there are no shortcuts. Therefore, the financial advisor shortage will get worse before it gets better. A lot worse! 

Robo-advice has limited application 

Robo-advice solutions have been lauded as a cheaper alternative to personal financial advice. Robo-advice is an algorithm-driven software tool that makes recommendations based on the answers to a series of questions. Currently, robo-advice tools provide very limited solutions. 

The problem with robo-advice is that it’s a very logical tool. However, the study of behavioural finance tells us that financial decisions can be heavily influenced by emotions. Often, it is difficult to change someone’s mind with logic alone, especially if they did not use logic to make their original decisions. In this situation, a human-to-human relat

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11144474 Wed, 17 Aug 2022 07:00:00 +1000 1193 Stuart Wemyss, ProSolution, Investopoly, Rules of the Lending Game, financial advice, financial advisors, independent advice, 222 full false The RBA made 3 BIG mistakes... to the detriment of borrowers and the economy The RBA made 3 BIG mistakes... to the detriment of borrowers and the economy If Australia slips into a recession, it will mostly likely be the RBA’s fault. They have completely botched the management of interest rates to the detriment of borrowers, the economy, and the bond market. Here’s why…  

In its defence 

Firstly, in the RBA’s defence, is has been navigating uncharted territory over the past 2.5 years. There was a lot of uncertainty about what damage a once-in-a-lifetime global pandemic could cause. At the beginning, no one knew how long lockdowns would last for or whether pharmaceutical companies would ever be able to formulate a vaccine. There was a lot of uncertainty and no pandemic experience to guide decision making. 

Secondly, the RBA did react very quickly with some good initiatives as soon as Covid hit in March 2020, namely: 

§  It slashed the cash rate by 0.75% in March 2020 and then by 0.15% in November 2020, so that the cash rate was ostensibly zero (target rate was 0.10%). 

§  It launched its Term Funding Facility where it ended up lending $188 billion to the banks at a fixed rate of only 0.10% for 3 years. The banks used this facility to offer customers very cheap mortgage fixed rates – often below 2% p.a. – which gave borrowers confidence and improved household cash flow during what was a tumultuous period. The RBA closed this facility in June 2021. 

§  It also participated in what’s called yield curve control. This means it actively participated in the bond market to maintain the 3-year bond rate at 0.10% (the cash rate), often through buying government bonds i.e., QE.  

All three of these measures were appropriate, timely and necessary.

What it did wrong 

In my view, the RBA made three critical mistakes. 

Firstly, the RBA’s Governor, Lowe adopted the unusual practice of providing forward interest rate guidance. Up until last year, Lowe relentlessly assured Australians that the RBA would not raise rates until 2024. Yes, he did say that his prediction was conditional upon the RBA’s economic expectations, which did not include higher inflation at the time. But my point is that historically, the RBA says very little and lets the free market decide what the future holds. 

Secondly, it began raising the cash rate too late and it’s probably hiking it too quickly. I think it was obvious by the first half of 2021 that the Australian economy was very resilient. Sure, lockdowns did cause some economic pain, but as soon as they were lifted, spending bounced back strongly. It has now aggressively increased rates by 1.75% in only four months. The RBA has only done that once before where in 1994 it increased rates by 2.75% over 5 months. It’s aggressive. Perhaps too aggressive.  

Finally, without much warning, it abandoned its yield curve control which crashed the bond market! When the RBA first initiated yield curve control, it only took 11 days and purchasing $27 billion of government bonds to get the 3-year bond rate to equal the cash rate i.e., 0.10%. After that initial intervention, the RBA didn’t have to do much at all. However, in July 2021 it announced that it would be winding back its yield curve control and completely abandoned it in late October 2021. Consequently, between September and early November 2021, the 3-year bond rate increased 10-fold i.e., jumped from 0.10% to above 1.00%! This caused bond values to crash and increased borrowing costs for banks and corporates. 

Why Australia is different to the US 

It is true that other developed countries have been raising interest rates quickly too. The US Federal Reserve has hiked rates by 2.25% this year so far. And the Bank of England has hiked ra

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> If Australia slips into a recession, it will mostly likely be the RBA’s fault. They have completely botched the management of interest rates to the detriment of borrowers, the economy, and the bond market. Here’s why…  

In its defence 

Firstly, in the RBA’s defence, is has been navigating uncharted territory over the past 2.5 years. There was a lot of uncertainty about what damage a once-in-a-lifetime global pandemic could cause. At the beginning, no one knew how long lockdowns would last for or whether pharmaceutical companies would ever be able to formulate a vaccine. There was a lot of uncertainty and no pandemic experience to guide decision making. 

Secondly, the RBA did react very quickly with some good initiatives as soon as Covid hit in March 2020, namely: 

§  It slashed the cash rate by 0.75% in March 2020 and then by 0.15% in November 2020, so that the cash rate was ostensibly zero (target rate was 0.10%). 

§  It launched its Term Funding Facility where it ended up lending $188 billion to the banks at a fixed rate of only 0.10% for 3 years. The banks used this facility to offer customers very cheap mortgage fixed rates – often below 2% p.a. – which gave borrowers confidence and improved household cash flow during what was a tumultuous period. The RBA closed this facility in June 2021. 

§  It also participated in what’s called yield curve control. This means it actively participated in the bond market to maintain the 3-year bond rate at 0.10% (the cash rate), often through buying government bonds i.e., QE.  

All three of these measures were appropriate, timely and necessary.

What it did wrong 

In my view, the RBA made three critical mistakes. 

Firstly, the RBA’s Governor, Lowe adopted the unusual practice of providing forward interest rate guidance. Up until last year, Lowe relentlessly assured Australians that the RBA would not raise rates until 2024. Yes, he did say that his prediction was conditional upon the RBA’s economic expectations, which did not include higher inflation at the time. But my point is that historically, the RBA says very little and lets the free market decide what the future holds. 

Secondly, it began raising the cash rate too late and it’s probably hiking it too quickly. I think it was obvious by the first half of 2021 that the Australian economy was very resilient. Sure, lockdowns did cause some economic pain, but as soon as they were lifted, spending bounced back strongly. It has now aggressively increased rates by 1.75% in only four months. The RBA has only done that once before where in 1994 it increased rates by 2.75% over 5 months. It’s aggressive. Perhaps too aggressive.  

Finally, without much warning, it abandoned its yield curve control which crashed the bond market! When the RBA first initiated yield curve control, it only took 11 days and purchasing $27 billion of government bonds to get the 3-year bond rate to equal the cash rate i.e., 0.10%. After that initial intervention, the RBA didn’t have to do much at all. However, in July 2021 it announced that it would be winding back its yield curve control and completely abandoned it in late October 2021. Consequently, between September and early November 2021, the 3-year bond rate increased 10-fold i.e., jumped from 0.10% to above 1.00%! This caused bond values to crash and increased borrowing costs for banks and corporates. 

Why Australia is different to the US 

It is true that other developed countries have been raising interest rates quickly too. The US Federal Reserve has hiked rates by 2.25% this year so far. And the Bank of England has hiked ra

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11096641 Wed, 10 Aug 2022 07:00:00 +1000 1113 Stuart Wemyss, ProSolution, Investopoly, Rules of the Lending Game, Property investing, Build wealth, RBA, cash rate, interest rates 221 full false Important changes to Queensland land tax Important changes to Queensland land tax Queensland announced changes to land tax in its state budget in February 2022. On 12 July 2022, it released more detail regarding how these changes will be implemented (see here).  

Queensland land tax to rise substantially for interstate investors 

Essentially, when determining an investors land tax liability, the Queensland government will consider the value of landholdings in Australia (excluding principal residence), not just Queensland, and apportion the land tax liability accordingly.  

This is best explained using an example 

Situation: Gary owns an investment property in Queensland with a land value of $800k and an investment property in Victoria with a land value of $1m. Total Australian landholdings are therefore $1.8 million, excluding his primary residence.  

Current land tax: Gary is only charged land tax on his Queensland property only at a rate of 1% for the amount above $600k plus $500 (individual land tax rates can be found here). So, Gary’s land tax liability is $2,500 p.a.  

Proposed from 30 June 2023: The Queensland government will calculate the land tax payable on $1.8 million and multiple this amount by 44% (being the portion of Queensland land versus total land owned Australia wide i.e., $800k/$1.8m). Consequently, Gary’s land tax liability will increase from $2,500 p.a. to $7,866 p.a.! Yes, a 3-fold increase!!!  

There are some practical challenges 

If you own an investment property in Queensland and other states, you will have to declare the value of this land with the QRO within 30 days of receiving a land tax assessment or by 31 October 2023, whichever is earlier.  

Whether Queensland is able to data match and audit these declarations, is unknown at this stage, but I suspect they will.  

What impact will this change have? 

These changes don’t begin until 30 June 2023 and a lot can happen between now and then. I expect the Queensland government will receive a lot of resistance and lobbying.  

However, assuming these changes are implemented as proposed, this will have a big impact on investors returns and cash flow. Investors will either need to pass on some of these higher holding costs onto tenants in the form of higher rents or they will divest of their property/s, which potentially means fewer properties available to let. Either way, it will almost certainly result in a rental crisis, particularly in Brisbane.  

I don’t think it will last 

My feeling is that this land tax change will be like the Vendor Duty that NSW introduced in 2005. NSW demanded that Vendors pay a duty of 2.25% when they sold an investment property, in addition to the stamp duty that buyers paid. This ill-conceived tax was scrapped only a matter of months after it was introduced.  

If the Queensland land tax changes do come into force on 30 June 2023 as proposed, I think the government will be forced to abolish them relatively quickly as the Brisbane market relies on interstate investors. Strong population growth means that Brisbane needs more accommodation, not less.  

Therefore, at this stage, my advice to investors is to hold tight. Do not react to these changes just yet. 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Queensland announced changes to land tax in its state budget in February 2022. On 12 July 2022, it released more detail regarding how these changes will be implemented (see here).  

Queensland land tax to rise substantially for interstate investors 

Essentially, when determining an investors land tax liability, the Queensland government will consider the value of landholdings in Australia (excluding principal residence), not just Queensland, and apportion the land tax liability accordingly.  

This is best explained using an example 

Situation: Gary owns an investment property in Queensland with a land value of $800k and an investment property in Victoria with a land value of $1m. Total Australian landholdings are therefore $1.8 million, excluding his primary residence.  

Current land tax: Gary is only charged land tax on his Queensland property only at a rate of 1% for the amount above $600k plus $500 (individual land tax rates can be found here). So, Gary’s land tax liability is $2,500 p.a.  

Proposed from 30 June 2023: The Queensland government will calculate the land tax payable on $1.8 million and multiple this amount by 44% (being the portion of Queensland land versus total land owned Australia wide i.e., $800k/$1.8m). Consequently, Gary’s land tax liability will increase from $2,500 p.a. to $7,866 p.a.! Yes, a 3-fold increase!!!  

There are some practical challenges 

If you own an investment property in Queensland and other states, you will have to declare the value of this land with the QRO within 30 days of receiving a land tax assessment or by 31 October 2023, whichever is earlier.  

Whether Queensland is able to data match and audit these declarations, is unknown at this stage, but I suspect they will.  

What impact will this change have? 

These changes don’t begin until 30 June 2023 and a lot can happen between now and then. I expect the Queensland government will receive a lot of resistance and lobbying.  

However, assuming these changes are implemented as proposed, this will have a big impact on investors returns and cash flow. Investors will either need to pass on some of these higher holding costs onto tenants in the form of higher rents or they will divest of their property/s, which potentially means fewer properties available to let. Either way, it will almost certainly result in a rental crisis, particularly in Brisbane.  

I don’t think it will last 

My feeling is that this land tax change will be like the Vendor Duty that NSW introduced in 2005. NSW demanded that Vendors pay a duty of 2.25% when they sold an investment property, in addition to the stamp duty that buyers paid. This ill-conceived tax was scrapped only a matter of months after it was introduced.  

If the Queensland land tax changes do come into force on 30 June 2023 as proposed, I think the government will be forced to abolish them relatively quickly as the Brisbane market relies on interstate investors. Strong population growth means that Brisbane needs more accommodation, not less.  

Therefore, at this stage, my advice to investors is to hold tight. Do not react to these changes just yet. 

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11060009 Thu, 04 Aug 2022 07:00:00 +1000 486 wemyss, land tax, queensland land tax, property investing, 220 full false Which industry super fund do I think is the best overall? (Inc. 2022 super returns) Which industry super fund do I think is the best overall? (Inc. 2022 super returns)  Superannuation returns for the 2021/22 financial year were mostly negative. However, we shouldn’t forget that the previous 18-month period (i.e., mid-2020 to the end of calendar year 2021) was stellar, so we must keep a longer-term perspective. 

And the winner is… 

The table below sets out investment returns for the largest 8 industry funds based on a Balanced investment option (data provided by research house, Lonsec). The table is sorted by 1-year returns, highest to lowest for the financial year ended June 2022. Hostplus achieved the highest return – more about this below. 

 TABLE

I have selected the relevant pre-mixed investment options that have between 60% and 76% of assets invested in growth assets e.g., shares. This is defined as a Balanced asset allocation. You will note however that some super funds don’t use the Balanced description – some call the option Growth or Core and so on. This highlights that it is important to not rely solely on an investment option’s name. Instead, it is important to examine the actual asset allocation of the option you are considering. 

Click here to view a similar comparison for a Growth investment option. 

Beware of unlisted assets valuations (or lack thereof) 

One of the concerns I have with some of these industry super funds is their lack of transparency, particularly with unlisted investments, as I discussed here last year. Transparency invites more accountability, which is a positive attribute, especially when investing is concerned. That is why I’m so attracted to rules-based and evidence-based investment methodologies – they are completely transparent. 

Transparency allows stakeholders to make better assessments as to an investment portfolios inherent risks and therefore likely future returns. Transparency reduces risk too because there’s nowhere to hide fees, risk or underperformance. 

I read with great interest this article in the AFR on 20 July 2022. The article suggested that two super funds held an interest in Australian technology company, Canva. These super funds (Hostplus and Aware) adopted two different valuation approaches for their shareholdings as at 30 June 2022. Aware reduced its valuation, as technology company valuations have fallen substantially through the first half of 2022. However, Hostplus didn’t amend its valuation. 

Stripe is a large unlisted US technology company (like Canva) and it reported a 28% lower valuation in July, so it seems unreasonable (unethical) that Hostplus hasn’t adjusted its valuation. Coincidentally, Hostplus was the only fund to report a positive return last financial year. Read into that what you will. 

Members may eventually pay

In July, the super fund regulator, APRA indicated that it would crack down on valuations of unlisted investments, but it could be too late for some members. 

Most super funds are unitised investments which means that the fund calculates the value of members units each day. If a fund has overvalued an investment (which means unit prices are overvalued too) and a member leaves the fund, it will mean they will receive a higher payout (rollover) than what they would otherwise be entitled to if the investment was valued correctly. In this case, the remaining super fund members are left holding the bag i.e., they will wear the full impact of the eventual d

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]>  Superannuation returns for the 2021/22 financial year were mostly negative. However, we shouldn’t forget that the previous 18-month period (i.e., mid-2020 to the end of calendar year 2021) was stellar, so we must keep a longer-term perspective. 

And the winner is… 

The table below sets out investment returns for the largest 8 industry funds based on a Balanced investment option (data provided by research house, Lonsec). The table is sorted by 1-year returns, highest to lowest for the financial year ended June 2022. Hostplus achieved the highest return – more about this below. 

 TABLE

I have selected the relevant pre-mixed investment options that have between 60% and 76% of assets invested in growth assets e.g., shares. This is defined as a Balanced asset allocation. You will note however that some super funds don’t use the Balanced description – some call the option Growth or Core and so on. This highlights that it is important to not rely solely on an investment option’s name. Instead, it is important to examine the actual asset allocation of the option you are considering. 

Click here to view a similar comparison for a Growth investment option. 

Beware of unlisted assets valuations (or lack thereof) 

One of the concerns I have with some of these industry super funds is their lack of transparency, particularly with unlisted investments, as I discussed here last year. Transparency invites more accountability, which is a positive attribute, especially when investing is concerned. That is why I’m so attracted to rules-based and evidence-based investment methodologies – they are completely transparent. 

Transparency allows stakeholders to make better assessments as to an investment portfolios inherent risks and therefore likely future returns. Transparency reduces risk too because there’s nowhere to hide fees, risk or underperformance. 

I read with great interest this article in the AFR on 20 July 2022. The article suggested that two super funds held an interest in Australian technology company, Canva. These super funds (Hostplus and Aware) adopted two different valuation approaches for their shareholdings as at 30 June 2022. Aware reduced its valuation, as technology company valuations have fallen substantially through the first half of 2022. However, Hostplus didn’t amend its valuation. 

Stripe is a large unlisted US technology company (like Canva) and it reported a 28% lower valuation in July, so it seems unreasonable (unethical) that Hostplus hasn’t adjusted its valuation. Coincidentally, Hostplus was the only fund to report a positive return last financial year. Read into that what you will. 

Members may eventually pay

In July, the super fund regulator, APRA indicated that it would crack down on valuations of unlisted investments, but it could be too late for some members. 

Most super funds are unitised investments which means that the fund calculates the value of members units each day. If a fund has overvalued an investment (which means unit prices are overvalued too) and a member leaves the fund, it will mean they will receive a higher payout (rollover) than what they would otherwise be entitled to if the investment was valued correctly. In this case, the remaining super fund members are left holding the bag i.e., they will wear the full impact of the eventual d

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Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11059762 Wed, 03 Aug 2022 07:00:00 +1000 1131 super returns, 2022, investopoly, wemyss, stuart wemyss, industry super 219 full false Now’s a great time to buy property. Here’s why… Now’s a great time to buy property. Here’s why… In mid-2021, I wrote this blog: “Don’t buy a property in this market…” because, at that time, many property buyers were over-paying for property just to get into the market. I call it the FOMO premium, for lack of a better term (more about this below). My thesis was that since it’s never wise to allow fear (e.g., FOMO) to influence financial decision making, it was better to not buy property in 2021 if it meant having to overpay.  

We all know that the market has cooled somewhat this year. It is now my view that this is a much better market to buy in, if you can find the right asset, of course.  

What drove the property boom in 2020 and 2021? 

The median house price in the eastern capital cities grew by between 12% and 16% p.a. compounding over the 3 years ended March 2021. I believe this growth was driven by two predominant factors: 

1.     Long-horizon mean reversion; and 

2.     FOMO premium.  

The market was mostly making up for lost ground 

The chart below illustrates the historic compounding capital growth of the median house price in Melbourne, Sydney and Brisbane for the periods ending March 2022. The “long-term” figures reflect growth over the past 42 years i.e., 1980 to 2022. 

 <<CHART>> 

Whilst recent growth in property prices was well above the long-term average and therefore unsustainable, longer-term growth rates are still below the long-term averages with only two exceptions: 

1.     Sydney’s growth rate over the past 10 years exceeds the long-term average by 1.60% p.a. However, growth over 15 years is in line with the long-term average. Therefore, it’s possible that Sydney prices have over-corrected over recent years and could enter into a flatter cycle for the few years; and 

2.     Brisbane’s growth rate over the past 5 years has exceeded its long-term average. It is noteworthy however that growth over 10 and 15 years is still below average, so this market is probably still undervalued and could continue to grow strongly to revert to its mean.   

This updated chart demonstrates that property markets tend to move in two distinct cycles: a flat cycle followed by a growth cycle. To a large extent, this is what happened in Melbourne and Sydney after posting house price declines over the 3 years prior to the beginning of Covid. As demonstrated, the 5-year growth is still below average.  

The FOMO premium

Australia’s reaction to Covid throughout 2020 and 2021 fueled demand for property: 

§  The cash rate was ostensibly cut to zero. The RBA lent cheap money to the banks which they used to fund very low fixed rate loans, often at rates below 2% p.a. 

§  Higher income earners were able to preserve their incomes because their occupations were able to be conducted from home, unlike lower-income earners that worked in retail, hospitality and travel, for example. 

§  Due to the lockdowns, higher-income-earners spent less and saved more – they enjoyed much larger levels of surplus cash flow. 

§  And finally, people were spending more time at home which invited them to reflect on whether their home adequately suited their lifestyle needs.  

These factors conspired to create a lot of demand for property, particularly from higher income earners who considered upgrading their home (i.e., demand was mainly fueled by owner-occupiers, not investors).  

In early 2021, the co

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In mid-2021, I wrote this blog: “Don’t buy a property in this market…” because, at that time, many property buyers were over-paying for property just to get into the market. I call it the FOMO premium, for lack of a better term (more about this below). My thesis was that since it’s never wise to allow fear (e.g., FOMO) to influence financial decision making, it was better to not buy property in 2021 if it meant having to overpay.  

We all know that the market has cooled somewhat this year. It is now my view that this is a much better market to buy in, if you can find the right asset, of course.  

What drove the property boom in 2020 and 2021? 

The median house price in the eastern capital cities grew by between 12% and 16% p.a. compounding over the 3 years ended March 2021. I believe this growth was driven by two predominant factors: 

1.     Long-horizon mean reversion; and 

2.     FOMO premium.  

The market was mostly making up for lost ground 

The chart below illustrates the historic compounding capital growth of the median house price in Melbourne, Sydney and Brisbane for the periods ending March 2022. The “long-term” figures reflect growth over the past 42 years i.e., 1980 to 2022. 

 <<CHART>> 

Whilst recent growth in property prices was well above the long-term average and therefore unsustainable, longer-term growth rates are still below the long-term averages with only two exceptions: 

1.     Sydney’s growth rate over the past 10 years exceeds the long-term average by 1.60% p.a. However, growth over 15 years is in line with the long-term average. Therefore, it’s possible that Sydney prices have over-corrected over recent years and could enter into a flatter cycle for the few years; and 

2.     Brisbane’s growth rate over the past 5 years has exceeded its long-term average. It is noteworthy however that growth over 10 and 15 years is still below average, so this market is probably still undervalued and could continue to grow strongly to revert to its mean.   

This updated chart demonstrates that property markets tend to move in two distinct cycles: a flat cycle followed by a growth cycle. To a large extent, this is what happened in Melbourne and Sydney after posting house price declines over the 3 years prior to the beginning of Covid. As demonstrated, the 5-year growth is still below average.  

The FOMO premium

Australia’s reaction to Covid throughout 2020 and 2021 fueled demand for property: 

§  The cash rate was ostensibly cut to zero. The RBA lent cheap money to the banks which they used to fund very low fixed rate loans, often at rates below 2% p.a. 

§  Higher income earners were able to preserve their incomes because their occupations were able to be conducted from home, unlike lower-income earners that worked in retail, hospitality and travel, for example. 

§  Due to the lockdowns, higher-income-earners spent less and saved more – they enjoyed much larger levels of surplus cash flow. 

§  And finally, people were spending more time at home which invited them to reflect on whether their home adequately suited their lifestyle needs.  

These factors conspired to create a lot of demand for property, particularly from higher income earners who considered upgrading their home (i.e., demand was mainly fueled by owner-occupiers, not investors).  

In early 2021, the co

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-11021547 Wed, 27 Jul 2022 07:00:00 +1000 1031 Stuart Wemyss, ProSolution, Investopoly, Rules of the Lending Game, Property investing, Build wealth 218 full false How to maximise investment property tax deductions How to maximise investment property tax deductions You must invest in residential property primarily to benefit from the power of compounding capital growth. Any tax benefits (negative gearing) are merely a positive consequence of this investment, not the reason for it. That said, of course it makes sense to maximise your taxation deductions wherever possible.  

Make it easy for yourself

Maintaining accurate and complete taxation records is necessary to ensure all tax deductions are captured and treated correctly.  

I encourage my clients to utilise their property managers services to make record keeping as simple as possible. This involves asking your property manager to pay for all property specific related expenses on your behalf. For example, if you receive a bill, forward it to your property manager and request they pay it. You may need to transfer some money into their trust account if there’s not enough rental income to pay for it, but that’s not a big deal. In fact, having your bills mailed/emailed directly to your property manager streamlines this approach.  

The advantage of getting your property manager to pay for all expenses is that it will be recorded in the end-of-financial-year income and expense summary that they will provide you. At the end of the financial year, you just need to provide your accountant two pieces of information: (1) the rental summary and (2) a summary of interest and bank fees. This makes record keeping very simple.  

Summary of most common tax deductions 

The ATO publishes taxation statistics for each tax year (the most recent data is from the 2018/19 tax year). This data covers the 2.8 million investment properties that are owned by 2.2 million taxpayers. The most common tax deductions were:  

 | Deduction expense | Proportion of total deductions
 | Interest on loans  | 47%
 | Capital works deduction  | 8%
 | Council Rates | 7%
 | Property Agent fees/commission | 6%
 | Plant depreciation | 6%
 | Repairs and maintenance | 6%
 | Body Corporate Fees  | 5%
 | Water charges | 4%
 | Insurance | 3%
 | Land tax | 3%
 | Other inc. cleaning, garden, adverting, etc. | 5%

Source: ATO 

Interest and bank fees 

Interest and mortgage related fees will likely be your biggest tax deduction so it’s critical that you ensure its complete and accurate. I wrote this blog in 2020 which lists ten rules to follow to ensure you maximise your interest deductions.  

Most banks provide year-end interest summaries (accessible via internet banking) which summarises the amount of interest charged in respect to each loan account. If you refinanced or restructured your loans during the year, you will need to include any interest charged in respect to loan accounts that were subsequently closed.  

In addition, you will need to identify all banking fees changed during the financial year. This includes monthly account fees, any once off fees (such as variation or discharge fees) and any borrowing costs (the deduction for any upfront borrowing costs that exceed $100, such as Lenders Mortgage Insurance, must be spread over 5 years). These fees are often debited to transaction accounts (not loan accounts).  

Depreciation tax deductions 

There are two types of depreciation tax deductions that you can claim in respect to residential property, being (1) capital works and (2) deduction for the decline in value of plant, equipment and fittings such as air conditioners, stoves and so on. Based on the ATO statistics above, these items account for 14% of total deductions claimed, so they can be material. Any depreciation claimed (or that you were entitled to claim) will reduce a property’s cost base for CGT

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> You must invest in residential property primarily to benefit from the power of compounding capital growth. Any tax benefits (negative gearing) are merely a positive consequence of this investment, not the reason for it. That said, of course it makes sense to maximise your taxation deductions wherever possible.  

Make it easy for yourself

Maintaining accurate and complete taxation records is necessary to ensure all tax deductions are captured and treated correctly.  

I encourage my clients to utilise their property managers services to make record keeping as simple as possible. This involves asking your property manager to pay for all property specific related expenses on your behalf. For example, if you receive a bill, forward it to your property manager and request they pay it. You may need to transfer some money into their trust account if there’s not enough rental income to pay for it, but that’s not a big deal. In fact, having your bills mailed/emailed directly to your property manager streamlines this approach.  

The advantage of getting your property manager to pay for all expenses is that it will be recorded in the end-of-financial-year income and expense summary that they will provide you. At the end of the financial year, you just need to provide your accountant two pieces of information: (1) the rental summary and (2) a summary of interest and bank fees. This makes record keeping very simple.  

Summary of most common tax deductions 

The ATO publishes taxation statistics for each tax year (the most recent data is from the 2018/19 tax year). This data covers the 2.8 million investment properties that are owned by 2.2 million taxpayers. The most common tax deductions were:  

 | Deduction expense | Proportion of total deductions
 | Interest on loans  | 47%
 | Capital works deduction  | 8%
 | Council Rates | 7%
 | Property Agent fees/commission | 6%
 | Plant depreciation | 6%
 | Repairs and maintenance | 6%
 | Body Corporate Fees  | 5%
 | Water charges | 4%
 | Insurance | 3%
 | Land tax | 3%
 | Other inc. cleaning, garden, adverting, etc. | 5%

Source: ATO 

Interest and bank fees 

Interest and mortgage related fees will likely be your biggest tax deduction so it’s critical that you ensure its complete and accurate. I wrote this blog in 2020 which lists ten rules to follow to ensure you maximise your interest deductions.  

Most banks provide year-end interest summaries (accessible via internet banking) which summarises the amount of interest charged in respect to each loan account. If you refinanced or restructured your loans during the year, you will need to include any interest charged in respect to loan accounts that were subsequently closed.  

In addition, you will need to identify all banking fees changed during the financial year. This includes monthly account fees, any once off fees (such as variation or discharge fees) and any borrowing costs (the deduction for any upfront borrowing costs that exceed $100, such as Lenders Mortgage Insurance, must be spread over 5 years). These fees are often debited to transaction accounts (not loan accounts).  

Depreciation tax deductions 

There are two types of depreciation tax deductions that you can claim in respect to residential property, being (1) capital works and (2) deduction for the decline in value of plant, equipment and fittings such as air conditioners, stoves and so on. Based on the ATO statistics above, these items account for 14% of total deductions claimed, so they can be material. Any depreciation claimed (or that you were entitled to claim) will reduce a property’s cost base for CGT

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-10984219 Wed, 20 Jul 2022 07:00:00 +1000 907 217 full false Why did apartments miss out on the recent property boom? Why did apartments miss out on the recent property boom?  It’s been well documented that property prices rose significantly over the course of 2020 and 2021. According to the Real Estate Institute of Australia, median house prices in eastern capital cities rose between 30% to 40% over those 2 years.  

However, unfortunately apartments underperformed compared to houses in a big way. I wanted to discuss why this occurred and consider what growth prospects apartments might provide in the future.  

Apartment prices are low relative to houses 

The chart below compares the median price of apartments to median price of houses from March 1980 to March 2022 (source: REIA). On average, the median house price has ranged between 1.2 and 1.4 times higher than the median apartment price in Melbourne and Sydney. 

 CHART

However, since house prices increased strongly during 2020 and 2021, the median house price is now almost 1.6 times the median apartment price in Sydney and Brisbane, and over 1.9 times in Melbourne. This is because the price of houses rose strongly over this time whereas the price of apartments barely changed.  

Covid negatively impacted apartment values 

Apartments are typically owned by people on lower incomes or investors.  

It has been well documented that lower income earners suffered the most during Covid lockdowns, as typically their occupations do not lend themselves well to working from home and/or their industries were closed e.g., hospitality and retail.  

Investors that owned apartments during Covid were asked to provide rental discounts/waivers and were restricted from vacating tenants and/or increasing rent.  

Consequently, throughout 2020 and 2021, apartment vacancy rates rose, rental incomes fell and of course, investors avoided this segment of the market.  

Conversely, Covid had a positive effect on house prices 

Homeowners tend to earn higher incomes than apartment owners, especially in blue-chip suburbs. These higher income earners were able to work from home during lockdowns and as such, they didn’t suffer any reduction in income. In fact, because they were in lockdown, they found they saved a lot more money which strengthened their financial position.  

Falling interest rates also helped higher income earners as it increased their borrowing capacity and ability to service debt. Together with an increased focus on lifestyle such as having a home office and/or relocating to a tree or seaside location, prompted more higher-income earners to upgrade their house. As such, houses enjoyed very strong buyer demand.  

What drives the gap between apartments and houses? 

Of course, it makes sense that houses cost more than apartments. Houses provide a larger amount of accommodation and provide the benefit of a direct land holding. The supply of houses in a blue-chip suburb is fixed because subdividing a block and constructing multiple dwellings tends to be uneconomic for developers (due to the high cost of the land) or restricted by governing municipalities.  

However, the price gap between houses and apartments cannot continue to grow perpetually. Eventually, fewer people will be able to afford to buy a house in a particular location/suburb. These people either must move to a more affordable location or buy an apartment instead of a house. As such, demand will increase for apartments and that will translate to price growth (due to the law of supply and demand).  

Cost of new apartments will rise 

Apartment buyers have the choice to buy a new apartment or an existing one. Often, buyers are attracted to a shiny and new building (however, I strongly recommend you steer

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]>  It’s been well documented that property prices rose significantly over the course of 2020 and 2021. According to the Real Estate Institute of Australia, median house prices in eastern capital cities rose between 30% to 40% over those 2 years.  

However, unfortunately apartments underperformed compared to houses in a big way. I wanted to discuss why this occurred and consider what growth prospects apartments might provide in the future.  

Apartment prices are low relative to houses 

The chart below compares the median price of apartments to median price of houses from March 1980 to March 2022 (source: REIA). On average, the median house price has ranged between 1.2 and 1.4 times higher than the median apartment price in Melbourne and Sydney. 

 CHART

However, since house prices increased strongly during 2020 and 2021, the median house price is now almost 1.6 times the median apartment price in Sydney and Brisbane, and over 1.9 times in Melbourne. This is because the price of houses rose strongly over this time whereas the price of apartments barely changed.  

Covid negatively impacted apartment values 

Apartments are typically owned by people on lower incomes or investors.  

It has been well documented that lower income earners suffered the most during Covid lockdowns, as typically their occupations do not lend themselves well to working from home and/or their industries were closed e.g., hospitality and retail.  

Investors that owned apartments during Covid were asked to provide rental discounts/waivers and were restricted from vacating tenants and/or increasing rent.  

Consequently, throughout 2020 and 2021, apartment vacancy rates rose, rental incomes fell and of course, investors avoided this segment of the market.  

Conversely, Covid had a positive effect on house prices 

Homeowners tend to earn higher incomes than apartment owners, especially in blue-chip suburbs. These higher income earners were able to work from home during lockdowns and as such, they didn’t suffer any reduction in income. In fact, because they were in lockdown, they found they saved a lot more money which strengthened their financial position.  

Falling interest rates also helped higher income earners as it increased their borrowing capacity and ability to service debt. Together with an increased focus on lifestyle such as having a home office and/or relocating to a tree or seaside location, prompted more higher-income earners to upgrade their house. As such, houses enjoyed very strong buyer demand.  

What drives the gap between apartments and houses? 

Of course, it makes sense that houses cost more than apartments. Houses provide a larger amount of accommodation and provide the benefit of a direct land holding. The supply of houses in a blue-chip suburb is fixed because subdividing a block and constructing multiple dwellings tends to be uneconomic for developers (due to the high cost of the land) or restricted by governing municipalities.  

However, the price gap between houses and apartments cannot continue to grow perpetually. Eventually, fewer people will be able to afford to buy a house in a particular location/suburb. These people either must move to a more affordable location or buy an apartment instead of a house. As such, demand will increase for apartments and that will translate to price growth (due to the law of supply and demand).  

Cost of new apartments will rise 

Apartment buyers have the choice to buy a new apartment or an existing one. Often, buyers are attracted to a shiny and new building (however, I strongly recommend you steer

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-10944411 Wed, 13 Jul 2022 07:00:00 +1000 919 216 full false Beware: existing customers always pay higher interest rates Beware: existing customers always pay higher interest rates  

Banks will usually offer higher interest rate discounts to new customers to win their business. But, of course, the banks never offer these higher discounts to existing customers, unless they ask for them.  

Whilst this has always been the case, it is noteworthy that interest rate discounts have increased substantially over the past 10 years. This means the gap between what interest rates existing and new customers are being charged has also widened to the extent that it is becoming more important that you (or your mortgage broker) review your loans at least annually.  

New customers are enjoying higher discounts

A decade ago, interest rate discounts (i.e., discount off the standard variable rate) typically ranged between 0.70% and 0.90% p.a. Today, we are obtaining discounts of up to 2.95% p.a.[1]! This means it’s very likely that new customers are paying significantly lower interest rates than existing ones, particularly if they haven’t renegotiated their loans for a few years.   

The chart below is compiled by the RBA and illustrates that new customers (orange line) are, on average, being charged lower variable interest rates than existing customers (purple line) – see yellow highlighted box. As you can see, this gap has widened considerably over recent years.  

 CHART 

What drives home loan discounts? 

Management remuneration packages (i.e., senior banking executives) tend to be linked to shareholder returns i.e., the share price. Bank share prices will be affected by factors such as (1) growth in mortgages compared to their peers and (2) net interest rate margin (which essentially is the gross profit generated by mortgage lending). A positive or negative change in these factors will tend to have an influence on a banks’ share price.  

For a variety of reasons, banks can experience phases where they produce better results (i.e., high growth and margins) than their peers. Conversely, the reverse is true too. Therefore, when a bank underperforms, it must make up for lost growth and buy a greater share of the (mortgage) market. It does this through discounting, either through broad based promotions or more often, offering higher customer-specific discounts to win new business.  

For example, in its recent half-yearly presentation in May 2022, Westpac confirmed that its investment mortgage loan book experienced a decline of 6.6% since September 2020 whereas its competitors, such as CBA, maintained its level of investor lending. Therefore, it is not surprising that Westpac is now offering higher interest rate discounts to win new investment loan customers.  

All the banks ebb and flow between being more and less aggressive regarding pricing (discounting) which creates useful competition for proactive borrowers and mortgage brokers.  

Automated re-pricing of mortgages 

At ProSolution, we have recently implemented an artificial intelligence tool that periodically re-prices our clients’ mortgages. Using a range of data, it calculates what variable interest rates our clients should be paying and then automatically submits a request to their lender/bank to match that pricing.  

With the growing popularity of fintech, I’m sure it won’t be long before similar tools to be available to consumers.  

What to do if you don’t have a mortgage broker 

It is advisable to proactively review your loans if your mortgage broker doesn’t do that on your behalf (or you don’t have a mortgage broker).  

To do that, you must first research which lenders will offer you the highest discount. That will depend on many factors including your LVR, total lending, number of individual loans, whether you have any exist

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]>  

Banks will usually offer higher interest rate discounts to new customers to win their business. But, of course, the banks never offer these higher discounts to existing customers, unless they ask for them.  

Whilst this has always been the case, it is noteworthy that interest rate discounts have increased substantially over the past 10 years. This means the gap between what interest rates existing and new customers are being charged has also widened to the extent that it is becoming more important that you (or your mortgage broker) review your loans at least annually.  

New customers are enjoying higher discounts

A decade ago, interest rate discounts (i.e., discount off the standard variable rate) typically ranged between 0.70% and 0.90% p.a. Today, we are obtaining discounts of up to 2.95% p.a.[1]! This means it’s very likely that new customers are paying significantly lower interest rates than existing ones, particularly if they haven’t renegotiated their loans for a few years.   

The chart below is compiled by the RBA and illustrates that new customers (orange line) are, on average, being charged lower variable interest rates than existing customers (purple line) – see yellow highlighted box. As you can see, this gap has widened considerably over recent years.  

 CHART 

What drives home loan discounts? 

Management remuneration packages (i.e., senior banking executives) tend to be linked to shareholder returns i.e., the share price. Bank share prices will be affected by factors such as (1) growth in mortgages compared to their peers and (2) net interest rate margin (which essentially is the gross profit generated by mortgage lending). A positive or negative change in these factors will tend to have an influence on a banks’ share price.  

For a variety of reasons, banks can experience phases where they produce better results (i.e., high growth and margins) than their peers. Conversely, the reverse is true too. Therefore, when a bank underperforms, it must make up for lost growth and buy a greater share of the (mortgage) market. It does this through discounting, either through broad based promotions or more often, offering higher customer-specific discounts to win new business.  

For example, in its recent half-yearly presentation in May 2022, Westpac confirmed that its investment mortgage loan book experienced a decline of 6.6% since September 2020 whereas its competitors, such as CBA, maintained its level of investor lending. Therefore, it is not surprising that Westpac is now offering higher interest rate discounts to win new investment loan customers.  

All the banks ebb and flow between being more and less aggressive regarding pricing (discounting) which creates useful competition for proactive borrowers and mortgage brokers.  

Automated re-pricing of mortgages 

At ProSolution, we have recently implemented an artificial intelligence tool that periodically re-prices our clients’ mortgages. Using a range of data, it calculates what variable interest rates our clients should be paying and then automatically submits a request to their lender/bank to match that pricing.  

With the growing popularity of fintech, I’m sure it won’t be long before similar tools to be available to consumers.  

What to do if you don’t have a mortgage broker 

It is advisable to proactively review your loans if your mortgage broker doesn’t do that on your behalf (or you don’t have a mortgage broker).  

To do that, you must first research which lenders will offer you the highest discount. That will depend on many factors including your LVR, total lending, number of individual loans, whether you have any exist

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-10900047 Wed, 06 Jul 2022 07:00:00 +1000 789 215 full false Economics 101: 7 key principles you should know Economics 101: 7 key principles you should know  

An understanding of basic economic principles will set you in good stead to understand financial commentary, political rhetoric and make your own assessment of economic risks and opportunities. That is not to suggest you need to become an economic expert but understanding some basic principles will go a long way.  

 

The foundation of economics: the law of supply and demand 

The law of supply and demand is the cornerstone of economic theory. 

 

The law of demand states that as the price of a product or service rises (holding all other factors constant), the level (quantity) of demand for that product or service falls. Basic logic supports this principle because fewer people will be able to afford the product as the price increases and/or an increasing proportion of people will consider it uneconomical to buy it at that (higher) price. The demand curve is downward sloping, as depicted in the diagram below. 

 

The law of supply is the opposite to demand. That is, the higher the price of a product or service, the higher the quantity of the product or service supplied by the economy (i.e., business). Again, this is common sense because as the price of a product or service rises, so does its profitability, so businesses therefore want to produce more. 

 

 Diagram 1 

 

The intersection of the supply and demand curves is the equilibrium price. This is the is the price at which the producer can sell all the units they want to produce, and the buyer can buy all the units they want. 

Diagram 2  


A current example 

A current example of the law of supply and demand at work is reflected in the price of lettuce – a topic being discussed in the media lately. As we know, supply has contracted due to supply chain issues and floods. Consequently, the supply curve has shifted left, and the price has risen to find a new equilibrium (i.e., equilibrium moves from A to B in the chart below). When supply returns to normal, so will prices.  

 

Economic output and growth 

The economic health of a country is primarily measured using Gross Domestic Product (or GDP). This measures the market value of all the goods and services that a country produces. The formula to calculate GDP is: 

 

GDP = Consumer spending + Government spending + Investment + Net exports 

 

Consumer spending is driven by factors such as employment, age growth and consumer confidence. When consumers are confident, they feel comfortable spending more and GDP rises. Approximately 50% of Australian GDP is generated through consumer spending. 

 

Government spending includes everything that the government spends money on including equipment, infrastructure, public service payroll, etc. Approximately 25% of Australian GDP is generated by government spending, although it’s been higher in recent years due to Covid support measures. 

 

Investment refers to private domestic investment including investments in businesses (e.g., buildings, plant and equipment, etc.), residential property construction and business inventories (stock). Approximately 22% of Australian GDP is generated by investment. 

 

Net exports are calculated by subtracting the value of all imports from the value of all exports. Approximately 3% of Australian GDP is generated by net exports (i.e., approximately $50 billion of exports less approximately $40 billion of imports). High commodity prices have contributed a lot to GDP growth. 

 

G

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

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This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]>  

An understanding of basic economic principles will set you in good stead to understand financial commentary, political rhetoric and make your own assessment of economic risks and opportunities. That is not to suggest you need to become an economic expert but understanding some basic principles will go a long way.  

 

The foundation of economics: the law of supply and demand 

The law of supply and demand is the cornerstone of economic theory. 

 

The law of demand states that as the price of a product or service rises (holding all other factors constant), the level (quantity) of demand for that product or service falls. Basic logic supports this principle because fewer people will be able to afford the product as the price increases and/or an increasing proportion of people will consider it uneconomical to buy it at that (higher) price. The demand curve is downward sloping, as depicted in the diagram below. 

 

The law of supply is the opposite to demand. That is, the higher the price of a product or service, the higher the quantity of the product or service supplied by the economy (i.e., business). Again, this is common sense because as the price of a product or service rises, so does its profitability, so businesses therefore want to produce more. 

 

 Diagram 1 

 

The intersection of the supply and demand curves is the equilibrium price. This is the is the price at which the producer can sell all the units they want to produce, and the buyer can buy all the units they want. 

Diagram 2  


A current example 

A current example of the law of supply and demand at work is reflected in the price of lettuce – a topic being discussed in the media lately. As we know, supply has contracted due to supply chain issues and floods. Consequently, the supply curve has shifted left, and the price has risen to find a new equilibrium (i.e., equilibrium moves from A to B in the chart below). When supply returns to normal, so will prices.  

 

Economic output and growth 

The economic health of a country is primarily measured using Gross Domestic Product (or GDP). This measures the market value of all the goods and services that a country produces. The formula to calculate GDP is: 

 

GDP = Consumer spending + Government spending + Investment + Net exports 

 

Consumer spending is driven by factors such as employment, age growth and consumer confidence. When consumers are confident, they feel comfortable spending more and GDP rises. Approximately 50% of Australian GDP is generated through consumer spending. 

 

Government spending includes everything that the government spends money on including equipment, infrastructure, public service payroll, etc. Approximately 25% of Australian GDP is generated by government spending, although it’s been higher in recent years due to Covid support measures. 

 

Investment refers to private domestic investment including investments in businesses (e.g., buildings, plant and equipment, etc.), residential property construction and business inventories (stock). Approximately 22% of Australian GDP is generated by investment. 

 

Net exports are calculated by subtracting the value of all imports from the value of all exports. Approximately 3% of Australian GDP is generated by net exports (i.e., approximately $50 billion of exports less approximately $40 billion of imports). High commodity prices have contributed a lot to GDP growth. 

 

G

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-10846518 Wed, 29 Jun 2022 08:00:00 +1000 1129 214 full false Should future trends drive your investment decisions? Should future trends drive your investment decisions? Many investors consider future trends when making investment decisions. Popular examples of investable trends include the growing demand for green energy, mainstream adoption of electric vehicles and cybersecurity.  

 

The thesis is that if you can correctly spot/predict a trend in the early stages, then you can invest in the companies and sectors that are best positioned to benefit economically. This is called thematic investing. 

 

What is thematic investing? 

Thematic investing is an approach that seeks to capitalise on megatrends and/or long-term structural changes. Most thematic trends tend to relate to three broad categories being (1) demographic change, (2) technological innovation and (3) climate change.  

 

The goal is to invest in sectors or companies that are likely to benefit substantially from these changes. For example, electronic vehicles (EV’s) will likely benefit from increasing consumer demand because of an increasing focus on climate change. If you agree with this thesis, then you may be attracted to investing in not only EV manufactures but the downstream industries such as battery, sensor manufactures, rare material miners (e.g., lithium – Australia is the largest exporter of lithium) and so on.  

 

Can you pick trends with consistent accuracy? 

The main challenge with thematic investing is that it’s a higher risk strategy because it relies on your (trend) expectations materialising. Our expectations can often be shaped by our world view, personal experiences and the dominant narrative of the day. However, these things may not be useful when making investment decisions. 

 

Also, because these themes are based on future outcomes, we must realise that expectations, products, technology and so on can change very quickly. Again, using EV’s as an example, whilst some valuable advancement have been made, there’s still plenty of opportunity for significant development in the future. Challenges such as battery storage, manufacturing costs, faster charging, battery recycling all need to be addressed. And the solution may not rest entirely with lithium batteries, but an alternative technology that is not discovered yet. 

 

How trends ultimately play out is inherently difficult to predict. 

 

Do you need to pick trends? 

An argument can be made that you don’t need to pick trends because when themes eventually materialise and result in value (profitable businesses/sectors), they will eventually be included in traditional share market indices. 

 

The chart below was shared in a presentation by Research Affiliates about 2 years ago. It lists the top 10 most valuable global companies in each decade since 1980. As you can see, the top 10 change a lot from one decade to the next. This demonstrates how share indices change over time as new technologies and industries emerge and others become redundant. 

 

Chart

 

The best performing thematic ETF’s over the past 5 years have been cybersecurity, technology (even despite recent volatility) and healthcare. These trends are reflected in indices as the technology and health care sectors now account for 35% of the total global index. 

 

Of course, the main downside with index investing is that you miss the first mover advantage i.e., investing when a product, tech or industry is in its infancy. But also, it is important to recognise that you also miss out on a lot of that risk too. The risk is that you invest in several thematic investments and only 1 out of 10 end up producing quality returns, which wouldn’t be an uncommon outcome. 

&n

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Many investors consider future trends when making investment decisions. Popular examples of investable trends include the growing demand for green energy, mainstream adoption of electric vehicles and cybersecurity.  

 

The thesis is that if you can correctly spot/predict a trend in the early stages, then you can invest in the companies and sectors that are best positioned to benefit economically. This is called thematic investing. 

 

What is thematic investing? 

Thematic investing is an approach that seeks to capitalise on megatrends and/or long-term structural changes. Most thematic trends tend to relate to three broad categories being (1) demographic change, (2) technological innovation and (3) climate change.  

 

The goal is to invest in sectors or companies that are likely to benefit substantially from these changes. For example, electronic vehicles (EV’s) will likely benefit from increasing consumer demand because of an increasing focus on climate change. If you agree with this thesis, then you may be attracted to investing in not only EV manufactures but the downstream industries such as battery, sensor manufactures, rare material miners (e.g., lithium – Australia is the largest exporter of lithium) and so on.  

 

Can you pick trends with consistent accuracy? 

The main challenge with thematic investing is that it’s a higher risk strategy because it relies on your (trend) expectations materialising. Our expectations can often be shaped by our world view, personal experiences and the dominant narrative of the day. However, these things may not be useful when making investment decisions. 

 

Also, because these themes are based on future outcomes, we must realise that expectations, products, technology and so on can change very quickly. Again, using EV’s as an example, whilst some valuable advancement have been made, there’s still plenty of opportunity for significant development in the future. Challenges such as battery storage, manufacturing costs, faster charging, battery recycling all need to be addressed. And the solution may not rest entirely with lithium batteries, but an alternative technology that is not discovered yet. 

 

How trends ultimately play out is inherently difficult to predict. 

 

Do you need to pick trends? 

An argument can be made that you don’t need to pick trends because when themes eventually materialise and result in value (profitable businesses/sectors), they will eventually be included in traditional share market indices. 

 

The chart below was shared in a presentation by Research Affiliates about 2 years ago. It lists the top 10 most valuable global companies in each decade since 1980. As you can see, the top 10 change a lot from one decade to the next. This demonstrates how share indices change over time as new technologies and industries emerge and others become redundant. 

 

Chart

 

The best performing thematic ETF’s over the past 5 years have been cybersecurity, technology (even despite recent volatility) and healthcare. These trends are reflected in indices as the technology and health care sectors now account for 35% of the total global index. 

 

Of course, the main downside with index investing is that you miss the first mover advantage i.e., investing when a product, tech or industry is in its infancy. But also, it is important to recognise that you also miss out on a lot of that risk too. The risk is that you invest in several thematic investments and only 1 out of 10 end up producing quality returns, which wouldn’t be an uncommon outcome. 

&n

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss Buzzsprout-10820382 Wed, 22 Jun 2022 08:00:00 +1000 1037 213 full false Should you do anything about rising interest rates? Should you do anything about rising interest rates? Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss bb0f59bb-da1b-43c3-9f09-b2de128f5e3a Wed, 15 Jun 2022 08:00:00 +1000 951 false 6 case studies: The importance of holistic advice 6 case studies: The importance of holistic advice Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 6e8f21f8-6be8-4b4b-a3b7-d5288de9b009 Wed, 08 Jun 2022 08:00:00 +1000 1386 false "Timing" the market can be more important than "time in" the market "Timing" the market can be more important than "time in" the market Most people are familiar with the saying that “time in the market is more important than timing the market”. It is very true that holding a quality investment for many decades will mask imperfect timing. However, for some asset classes/investments, timing can be very important.

Most markets move in cycles
Most people understand that markets move in cycles. To generalise, an asset class can be over-valued (particularly during a boom cycle), under-valued (after a bust cycle) or fairly valued.

If you had have invested in the US tech index (NASDAQ) in November 2021 you would have lost about 30% to date. This is a lesson in poor timing. $100 invested would now be worth $70. An investor needs a 43% return just to get back to $100 again (breakeven). It’s worth noting that every fundamental indicator highlighted that the NASDAQ has been overvalued for some time. Of course, a bull market can last a lot longer than anyone can anticipate which invites people to ignore these fundamental indicators.

Mean reversion: what goes up, must come down
If we acknowledge that most markets move in cycles, then it is obvious that we should invest in undervalued or fairly valued asset classes and sell asset classes that are overvalued. Taking this approach leverages the power of mean reversion as I explain in this blog.

Investment-grade property has much flatter cycles
It is important to define what I mean by “investment-grade property”. Investment-grade property is an asset that has produced a solid historical capital growth rate, underpinned by a strong land value component and scarcity. As such, investment-grade property benefits from perpetually strong demand at a level that exceeds supply. These assets are generally located in well-established, sort after, blue-chip suburbs.

Property is a lot less volatile than shares – about half the rate. I suspect there’s two reasons for this. Firstly, property is a necessity. We all need a roof over our heads. It is not a discretionary asset, like shares are. Secondly, due to high transactional costs (agent fees, stamp duty, etc.), property isn’t traded (bought and sold) in the same way shares are.

For example, the volatility of the median houses price in Melbourne since 1980 is 9.1%. The average capital growth rate over that period was 8.3% p.a. Therefore, two-thirds of the time investors should expect the annual growth rate will range between 0.8% and 17.4%[1].

That compares favourably to share markets which tend to have volatility rates of 18-20%. Therefore, two-thirds of the time share market returns will range between -11% and +28% - a much wider range.

Timing the property market is less important
This chart sets out long-term growth patterns for property in each capital city. It is noteworthy that property tends to eb between two cycles being growth and flat. Of course, it would be great if you could accurately pick when each cycle will begin and end, but you can’t. It is very difficult (read impossible). Markets cycles can last longer than you may expect. For example, Melbourne’s apartment market is a good example of this – it’s been flat since 2010.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Most people are familiar with the saying that “time in the market is more important than timing the market”. It is very true that holding a quality investment for many decades will mask imperfect timing. However, for some asset classes/investments, timing can be very important.

Most markets move in cycles
Most people understand that markets move in cycles. To generalise, an asset class can be over-valued (particularly during a boom cycle), under-valued (after a bust cycle) or fairly valued.

If you had have invested in the US tech index (NASDAQ) in November 2021 you would have lost about 30% to date. This is a lesson in poor timing. $100 invested would now be worth $70. An investor needs a 43% return just to get back to $100 again (breakeven). It’s worth noting that every fundamental indicator highlighted that the NASDAQ has been overvalued for some time. Of course, a bull market can last a lot longer than anyone can anticipate which invites people to ignore these fundamental indicators.

Mean reversion: what goes up, must come down
If we acknowledge that most markets move in cycles, then it is obvious that we should invest in undervalued or fairly valued asset classes and sell asset classes that are overvalued. Taking this approach leverages the power of mean reversion as I explain in this blog.

Investment-grade property has much flatter cycles
It is important to define what I mean by “investment-grade property”. Investment-grade property is an asset that has produced a solid historical capital growth rate, underpinned by a strong land value component and scarcity. As such, investment-grade property benefits from perpetually strong demand at a level that exceeds supply. These assets are generally located in well-established, sort after, blue-chip suburbs.

Property is a lot less volatile than shares – about half the rate. I suspect there’s two reasons for this. Firstly, property is a necessity. We all need a roof over our heads. It is not a discretionary asset, like shares are. Secondly, due to high transactional costs (agent fees, stamp duty, etc.), property isn’t traded (bought and sold) in the same way shares are.

For example, the volatility of the median houses price in Melbourne since 1980 is 9.1%. The average capital growth rate over that period was 8.3% p.a. Therefore, two-thirds of the time investors should expect the annual growth rate will range between 0.8% and 17.4%[1].

That compares favourably to share markets which tend to have volatility rates of 18-20%. Therefore, two-thirds of the time share market returns will range between -11% and +28% - a much wider range.

Timing the property market is less important
This chart sets out long-term growth patterns for property in each capital city. It is noteworthy that property tends to eb between two cycles being growth and flat. Of course, it would be great if you could accurately pick when each cycle will begin and end, but you can’t. It is very difficult (read impossible). Markets cycles can last longer than you may expect. For example, Melbourne’s apartment market is a good example of this – it’s been flat since 2010.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss e222638e-9c40-4479-9581-867975f17912 Wed, 01 Jun 2022 08:00:00 +1000 968 investopoly,rules of the lending game,wemyss,financial advisor,financial planning,financial advice,financial advsier,investment decisions,long term plan,timing,investment timing,market cycles,mean reversion 1 210 false Be prepared for a few years of turbulence... and opportunity Be prepared for a few years of turbulence... and opportunity I think we need to be prepared for the possibility that the next couple of years might be a bumpy ride in terms of the economy, financial markets, interest rates and so forth. The media thrives on higher levels of uncertainty, so be prepared for plenty of doomsday predictions and lots of negativity. The silver lining is that negative sentiment almost always creates attractive long term investment opportunities, but you must be on the lookout for them.

Inflation is not demand driven
It has been well documented that the cost of living has been rising in Australia and around the world. Australia’s inflation rate is currently 5.1% p.a. (as measured by CPI), but anyone that’s been to the supermarket lately knows that prices of many products has risen by a lot more than this. Inflation is a problem in many other countries too – NZ inflation is 6.9%, UK is 9.0% and US is 8.3%.

Inflation occurs because demand for goods and services exceeds supply. Inflation can be demand driven (i.e., when demand is above normal, but supply remains at normal levels) or supply driven (i.e., supply is below normal).

I certainly acknowledge that some sectors have experienced levels of consumer demand that are well above normal levels, particularly during lockdowns. However, at this stage, I think inflation is mainly driven by supply chain shortages. Therefore, to cool inflation, demand must be reduced to below normal levels. Unfortunately, that means financial pain for some people because household budgets need to be strained to the point that people buy fewer goods and services than they would otherwise need to buy. That will be achieved either by higher prices (market forces) or higher interest rates (RBA), or both. Cooling supply driven inflation is generally painful, especially when wages aren’t rising nearly as fast as prices.


But interest rates must return to normal ASAP almost regardless of inflation
One year ago, I wrote that interest rate expectations can change very quickly, and we shouldn’t get seduced into thinking they won’t rise. Last year many commentators were suggesting that interest rates might not rise for many, many years. Today, the same commentators are predicting multiple increases in the coming months.

The reality is that interest rates were at emergency settings (zero) for a very good reason – Australia was in lockdown! But that is no longer the case and interest rates must return to more normal levels as soon as the economy can afford it. If interest rates were left at zero for too long, there would be severe negative long-term consequences.

The big question that economists are currently wrestling with is what do normal interest rates look like? It is likely that the neutral interest rate

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> I think we need to be prepared for the possibility that the next couple of years might be a bumpy ride in terms of the economy, financial markets, interest rates and so forth. The media thrives on higher levels of uncertainty, so be prepared for plenty of doomsday predictions and lots of negativity. The silver lining is that negative sentiment almost always creates attractive long term investment opportunities, but you must be on the lookout for them.

Inflation is not demand driven
It has been well documented that the cost of living has been rising in Australia and around the world. Australia’s inflation rate is currently 5.1% p.a. (as measured by CPI), but anyone that’s been to the supermarket lately knows that prices of many products has risen by a lot more than this. Inflation is a problem in many other countries too – NZ inflation is 6.9%, UK is 9.0% and US is 8.3%.

Inflation occurs because demand for goods and services exceeds supply. Inflation can be demand driven (i.e., when demand is above normal, but supply remains at normal levels) or supply driven (i.e., supply is below normal).

I certainly acknowledge that some sectors have experienced levels of consumer demand that are well above normal levels, particularly during lockdowns. However, at this stage, I think inflation is mainly driven by supply chain shortages. Therefore, to cool inflation, demand must be reduced to below normal levels. Unfortunately, that means financial pain for some people because household budgets need to be strained to the point that people buy fewer goods and services than they would otherwise need to buy. That will be achieved either by higher prices (market forces) or higher interest rates (RBA), or both. Cooling supply driven inflation is generally painful, especially when wages aren’t rising nearly as fast as prices.


But interest rates must return to normal ASAP almost regardless of inflation
One year ago, I wrote that interest rate expectations can change very quickly, and we shouldn’t get seduced into thinking they won’t rise. Last year many commentators were suggesting that interest rates might not rise for many, many years. Today, the same commentators are predicting multiple increases in the coming months.

The reality is that interest rates were at emergency settings (zero) for a very good reason – Australia was in lockdown! But that is no longer the case and interest rates must return to more normal levels as soon as the economy can afford it. If interest rates were left at zero for too long, there would be severe negative long-term consequences.

The big question that economists are currently wrestling with is what do normal interest rates look like? It is likely that the neutral interest rate

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 02f52c00-bbc7-429a-b8fe-bae2864ad014 Wed, 25 May 2022 08:00:00 +1000 1147 investopoly,wemyss,rules of the lending game,prosolution,shares,share market,index funds,share market crash,Melbourne property,inflation,interest rates 1 209 false Should you plan to give or receive an inheritance? Should you plan to give or receive an inheritance? A lot has been written about the good fortune of baby-boomers in that, overall, they have enjoyed a long period of economic, share market and property market prosperity. Whilst they haven’t enjoyed the full benefit of compulsory super (which only began in 1992), other assets such as property has certainly compensated for that.

This means an inheritance tsunami will hit the next generation over the next two decades. Baby Boomers are expected to bequeath $224 billion each year in inheritance by 2050, representing a fourfold increase in the value of inheritances over the next 30 years. This creates a huge financial planning opportunity for many families.

At the same time, it invites you to think about the value of assets that you plan to leave your beneficiaries.

(A) Planning to receive an inheritance
There are many factors that you must consider if there’s a chance that you may receive an inheritance.

Do not rely on it, but certainly plan for it
The size of any potential inheritance and your family’s circumstances will typically determine whether it’s prudent to rely on receiving an inheritance when developing your personal financial plan.

Whilst you might expect to receive an inheritance, we all know that circumstances can quickly change. For example, the expected benefactors (often parents) might end up spending all their money or losing it (poor investments) or changing their mind and leaving it all to charity. Anything can happen.

You also must consider your family’s circumstances. If there’s a risk of conflict (between potential beneficiaries) then it’s possible you may not receive what you expect or you may be involved in a long legal battle. Any experienced estate lawyer will tell you how often money issues upset and ruin otherwise well-functioning and happy families. Money and family rarely mix well.

How can you factor it into your plans?
If you are confident that you will receive an inheritance and that you are unlikely to experience any family conflict, then you may take this into account in your own financial plan. For example, you might be comfortable borrowing additional monies to invest on the assumption that the inherence will assist you in repaying or reducing this debt when you retire. Or perhaps you might prioritise your lifestyle expenditure now (and invest less).

I must say that I am often reluctant to include inheritance when developing a financial plan for my clients, because it is just so uncertain – anything can change. If possible, I prefer to develop a strategy that does not consider inheritance and treat it as “icing on the cake” if its ever received.

Receive it tax-effectively
Typically, I prefer my clients to receive all inheritance via a testamentary trust. For this to be an option, a testamentary trust must be included in the benefactor’s will. A testamentary trust offers a few advantages.

Firstly, it can distribute to minors (your children or grandchildren that are less than 18 years old) and the income or capital gains are taxed at adult tax rates, which means each child can effectively receive circa $20,000 p.a. without paying any tax. This can be a great tax planning tool.

Secondly, as it’s a discretionary trust, it provides a lot of flexibility as to how income and capital gains are to be distributed which means it’s a good gift-making vehicle.

And finally, it provides a level of asset protection for the recipients.

If you expect to receive an inheritance you need to check with th

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> A lot has been written about the good fortune of baby-boomers in that, overall, they have enjoyed a long period of economic, share market and property market prosperity. Whilst they haven’t enjoyed the full benefit of compulsory super (which only began in 1992), other assets such as property has certainly compensated for that.

This means an inheritance tsunami will hit the next generation over the next two decades. Baby Boomers are expected to bequeath $224 billion each year in inheritance by 2050, representing a fourfold increase in the value of inheritances over the next 30 years. This creates a huge financial planning opportunity for many families.

At the same time, it invites you to think about the value of assets that you plan to leave your beneficiaries.

(A) Planning to receive an inheritance
There are many factors that you must consider if there’s a chance that you may receive an inheritance.

Do not rely on it, but certainly plan for it
The size of any potential inheritance and your family’s circumstances will typically determine whether it’s prudent to rely on receiving an inheritance when developing your personal financial plan.

Whilst you might expect to receive an inheritance, we all know that circumstances can quickly change. For example, the expected benefactors (often parents) might end up spending all their money or losing it (poor investments) or changing their mind and leaving it all to charity. Anything can happen.

You also must consider your family’s circumstances. If there’s a risk of conflict (between potential beneficiaries) then it’s possible you may not receive what you expect or you may be involved in a long legal battle. Any experienced estate lawyer will tell you how often money issues upset and ruin otherwise well-functioning and happy families. Money and family rarely mix well.

How can you factor it into your plans?
If you are confident that you will receive an inheritance and that you are unlikely to experience any family conflict, then you may take this into account in your own financial plan. For example, you might be comfortable borrowing additional monies to invest on the assumption that the inherence will assist you in repaying or reducing this debt when you retire. Or perhaps you might prioritise your lifestyle expenditure now (and invest less).

I must say that I am often reluctant to include inheritance when developing a financial plan for my clients, because it is just so uncertain – anything can change. If possible, I prefer to develop a strategy that does not consider inheritance and treat it as “icing on the cake” if its ever received.

Receive it tax-effectively
Typically, I prefer my clients to receive all inheritance via a testamentary trust. For this to be an option, a testamentary trust must be included in the benefactor’s will. A testamentary trust offers a few advantages.

Firstly, it can distribute to minors (your children or grandchildren that are less than 18 years old) and the income or capital gains are taxed at adult tax rates, which means each child can effectively receive circa $20,000 p.a. without paying any tax. This can be a great tax planning tool.

Secondly, as it’s a discretionary trust, it provides a lot of flexibility as to how income and capital gains are to be distributed which means it’s a good gift-making vehicle.

And finally, it provides a level of asset protection for the recipients.

If you expect to receive an inheritance you need to check with th

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 5b8fab46-d32b-40ae-b95d-d19a58859ad3 Wed, 18 May 2022 08:00:00 +1000 968 Investopoly,rules of the lending game,wemyss,will,wills,estate planning,Power of attorney,Asset protection,testamentary trust,inheritence,gifts 1 208 false Patience & discipline: Two vital traits of every successful investor Patience & discipline: Two vital traits of every successful investor I find it ironic that the two common financial mistakes that people make are (1) not investing i.e., procrastination or (2) doing too much i.e., turning over investments, changing their mind and so on.

Of course, not doing anything is an obviously bad thing as nothing comes from nothing. I wrote about this in March. But, sometimes reacting, changing, tinkering, selling, buying and so on can be equally as bad. The truth is that investing requires a lot of patience. The quote below from Warren Buffett’s business partner since 1975, Charlie Munger says it perfectly.

Look at those hedge funds - you think they can wait? They don't know how to wait! I have sat for years at a time with $10 to $12 million in treasuries or municipals, just waiting, waiting...As Jesse Livermore said, 'The big money is not in the buying and selling...but in the waiting.'
– Charlie Munger
When it comes to investing, doing nothing is often sometimes the most intelligent thing to do.

Research demonstrates that buying and selling destroys wealth
There’s a commonly cited story about global fund manager, Fidelity conducting research into which investment accounts performed the best. It is said that it found that inactive accounts i.e., where the investor forgot that the account existed produced the best returns, on average.

A study that included 66,465 investors concluded that portfolio turnover (i.e. buying and selling stocks) is inversely related to returns. That is, higher turnover leads to lower (about 5.5% p.a.) returns, on average. Whilst this study only considered stocks, the same would be true for every other asset class.

Three reasons why you need the discipline to be patient
If you have the discipline to be patient, you will enjoy much better investment returns for three reasons.

(1) Markets move in cycles
Most investment markets move in cycles. That is, a period of above-average returns follows a period of below average-returns, as shown in this chart of historic property returns. If you were unlucky and invested at the beginning of a flat growth period, it’s likely that you must hold an asset for a much longer period to generate a return close to the long-term average (i.e., 7-8% p.a.).

For example, generally, you must be prepared to hold a property for at least 10 years to enjoy the long-term average return (i.e., 7-8% p.a.). However, if you invest at the beginning of a flat period, you’ll have to hold the property for 15 to 20 years. Returns should be similar in both cases (i.e., 7-8% p.a.). The difference is the distribution of returns over time. Investment-grade apartments are a good example of this – see here.

(2) Returns compound
Compounding capital growth takes time. As this chart demonstrates, the projected growth (equity) in the first decade of ownership is $580k. But in the third decade is projected to be $2.7 million! That is the power of compounding returns. The two key ingredients are (1)

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> I find it ironic that the two common financial mistakes that people make are (1) not investing i.e., procrastination or (2) doing too much i.e., turning over investments, changing their mind and so on.

Of course, not doing anything is an obviously bad thing as nothing comes from nothing. I wrote about this in March. But, sometimes reacting, changing, tinkering, selling, buying and so on can be equally as bad. The truth is that investing requires a lot of patience. The quote below from Warren Buffett’s business partner since 1975, Charlie Munger says it perfectly.

Look at those hedge funds - you think they can wait? They don't know how to wait! I have sat for years at a time with $10 to $12 million in treasuries or municipals, just waiting, waiting...As Jesse Livermore said, 'The big money is not in the buying and selling...but in the waiting.'
– Charlie Munger
When it comes to investing, doing nothing is often sometimes the most intelligent thing to do.

Research demonstrates that buying and selling destroys wealth
There’s a commonly cited story about global fund manager, Fidelity conducting research into which investment accounts performed the best. It is said that it found that inactive accounts i.e., where the investor forgot that the account existed produced the best returns, on average.

A study that included 66,465 investors concluded that portfolio turnover (i.e. buying and selling stocks) is inversely related to returns. That is, higher turnover leads to lower (about 5.5% p.a.) returns, on average. Whilst this study only considered stocks, the same would be true for every other asset class.

Three reasons why you need the discipline to be patient
If you have the discipline to be patient, you will enjoy much better investment returns for three reasons.

(1) Markets move in cycles
Most investment markets move in cycles. That is, a period of above-average returns follows a period of below average-returns, as shown in this chart of historic property returns. If you were unlucky and invested at the beginning of a flat growth period, it’s likely that you must hold an asset for a much longer period to generate a return close to the long-term average (i.e., 7-8% p.a.).

For example, generally, you must be prepared to hold a property for at least 10 years to enjoy the long-term average return (i.e., 7-8% p.a.). However, if you invest at the beginning of a flat period, you’ll have to hold the property for 15 to 20 years. Returns should be similar in both cases (i.e., 7-8% p.a.). The difference is the distribution of returns over time. Investment-grade apartments are a good example of this – see here.

(2) Returns compound
Compounding capital growth takes time. As this chart demonstrates, the projected growth (equity) in the first decade of ownership is $580k. But in the third decade is projected to be $2.7 million! That is the power of compounding returns. The two key ingredients are (1)

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 626c3a81-7417-4d27-8c3b-1f2aec276bed Wed, 04 May 2022 08:00:00 +1000 908 investopoly,rules of the lending game,wemyss,financial advisor,financial planning,financial advice,financial advsier,investment decisions,long term plan 1 207 false "Consistency" (not intensity) is the key to building wealth "Consistency" (not intensity) is the key to building wealth When it comes to building wealth, the truth is that unremarkable actions completed consistently for many years (decades) produce remarkable results. But because these actions appear unremarkable, people tend to overlook their importance. Also, sometimes, people are tempted to undertake intense and often risky “investments” as a shortcut to make up for past inaction. Unfortunately, this approach rarely pays off. Consistency beats intensity.
This blog sets out the top 4 unremarkable actions that generate the most wealth if completed consistently over many years.
Eliminate unconscious expenditure
Holidays are expensive. And post-Covid, holidays are even more expensive. However, holidays tend to deliver a lot of happiness and satisfaction. We tend to think deeply about whether to book a holiday, where to go and how much to spend. This conscious approach to spending typically means we get good value for money i.e., in economic terms, maximise the utility per dollar spent.
If you are reading this blog, it’s very likely that you make wise, rational decisions about how you spend money. Therefore, your only potential weakness then is unconscious expenditure, which you must eliminate. Unconscious expenditure is when you spend money on items without thinking about it. These items tend to be small dollar value transactions. Most importantly, they tend to add little to your standard of living (i.e., utility), and as such, are a waste. A perfect example is the Stan subscription that I cancelled last month. My family hasn’t watched anything on Stan for a few months, so it was a waste to continue to pay for it. Unconscious expenditure can add up to multiples of tens of thousands of dollars each year.
How do you eliminate unconscious expenditure? There are two ways. You can track every dollar and cent you spend using an app like Pocketbook. However, for most people, this approach feels tedious, time consuming, and draconian. Instead, you need an approach that is simple and unintrusive so that you can stick to it for the long term. All my clients have had great success with the approach set out in this blog.
If you can adopt a strategy that ensures you minimise or hopefully eliminate unconscious expenditure and stick to it for the rest of your life, it will probably literally save you millions of dollars.
Invest regularly either in the share market or by making additional super contributions
If you invest $500 per month for 20 years and earn a return of 7% p.a. (on average), you will accumulate $260,000. If you invest $1,000 per month, you will accumulate $520,000 (consisting of $240,000 of capital plus $280,000 of investment returns).
You can accumulate substantial wealth by consistently investing relatively small amounts of money over long periods of time. The sooner you begin, the less you need to invest to produce substantial outcomes. For example, if a 25-year-old invested $500 per month, they would accumulate over $1.3 million by the time they were 65 years old!
There are two main ways to invest money regularly. Firstly, you could make additional contributions into super (be careful to not breach your annual cap of $27,500).

Or secondly, you could invest money in the share market. This blog sets out a very simple and cost-effective way to do that yourself.
You must measure your progress
You have probably heard these sayings; “what gets measured gets d

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> When it comes to building wealth, the truth is that unremarkable actions completed consistently for many years (decades) produce remarkable results. But because these actions appear unremarkable, people tend to overlook their importance. Also, sometimes, people are tempted to undertake intense and often risky “investments” as a shortcut to make up for past inaction. Unfortunately, this approach rarely pays off. Consistency beats intensity.
This blog sets out the top 4 unremarkable actions that generate the most wealth if completed consistently over many years.
Eliminate unconscious expenditure
Holidays are expensive. And post-Covid, holidays are even more expensive. However, holidays tend to deliver a lot of happiness and satisfaction. We tend to think deeply about whether to book a holiday, where to go and how much to spend. This conscious approach to spending typically means we get good value for money i.e., in economic terms, maximise the utility per dollar spent.
If you are reading this blog, it’s very likely that you make wise, rational decisions about how you spend money. Therefore, your only potential weakness then is unconscious expenditure, which you must eliminate. Unconscious expenditure is when you spend money on items without thinking about it. These items tend to be small dollar value transactions. Most importantly, they tend to add little to your standard of living (i.e., utility), and as such, are a waste. A perfect example is the Stan subscription that I cancelled last month. My family hasn’t watched anything on Stan for a few months, so it was a waste to continue to pay for it. Unconscious expenditure can add up to multiples of tens of thousands of dollars each year.
How do you eliminate unconscious expenditure? There are two ways. You can track every dollar and cent you spend using an app like Pocketbook. However, for most people, this approach feels tedious, time consuming, and draconian. Instead, you need an approach that is simple and unintrusive so that you can stick to it for the long term. All my clients have had great success with the approach set out in this blog.
If you can adopt a strategy that ensures you minimise or hopefully eliminate unconscious expenditure and stick to it for the rest of your life, it will probably literally save you millions of dollars.
Invest regularly either in the share market or by making additional super contributions
If you invest $500 per month for 20 years and earn a return of 7% p.a. (on average), you will accumulate $260,000. If you invest $1,000 per month, you will accumulate $520,000 (consisting of $240,000 of capital plus $280,000 of investment returns).
You can accumulate substantial wealth by consistently investing relatively small amounts of money over long periods of time. The sooner you begin, the less you need to invest to produce substantial outcomes. For example, if a 25-year-old invested $500 per month, they would accumulate over $1.3 million by the time they were 65 years old!
There are two main ways to invest money regularly. Firstly, you could make additional contributions into super (be careful to not breach your annual cap of $27,500).

Or secondly, you could invest money in the share market. This blog sets out a very simple and cost-effective way to do that yourself.
You must measure your progress
You have probably heard these sayings; “what gets measured gets d

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss c7de4400-9754-4600-90ba-406432d95ef4 Wed, 20 Apr 2022 08:00:00 +1000 1076 investopoly,rules of the lending game,wemyss,financial advisor,financial planning,financial advice,financial advsier,investment decisions,long term plan,money habits, 1 206 false Should you ever sell property? Should you ever sell property? A common property investing rule-of-thumb is that you should “buy property and never sell”. That’s because prices always trend higher over time which means you benefit from compounding capital growth.

Of course, the rule-of-thumb should be adjusted to include “buy quality property and never sell” to ensure you maximise investment returns.

But the reality is, that sometimes the smartest thing to do, is to sell a property, even if it is a quality asset, if it helps you move forward towards achieving your goals.

I discuss four of the most common scenarios where I have recommended clients sell property.

Poor investment returns
Of course, the most obvious reason for selling a property is that its past performance has been poor i.e., a low capital growth rate. But most importantly, you must form a view about whether future returns are likely to be acceptable or not. If the assets fundamentals are sound, then it’s likely you should retain the asset. Sometimes investing requires patience and discipline, which I’ll write more about in a few weeks.

My previous analysis concluded that a property needs to underperform by at least 2% p.a. to warrant selling it. Therefore, if a property has only slightly underperformed (by say 1% p.a.), it may not be worth selling because doing so crystalises CGT liabilities and selling costs.

I believe that there’s almost never a bad time to buy a quality asset (property). By extension that means there’s never a bad time to sell a dud asset. Whilst that is true to a large extent, it is wise to be strategic about it. A dud asset almost always has one or more impairments (e.g. located on a busy road). Afterall, that’s what makes them duds. As such, they can be more difficult to sell in a balanced or buyer's market. As such, it is best to sell impaired assets in a buoyant (seller’s) market. The rationale is that the high level of buyer demand and positive market sentiment may encourage some potential buyers to overlook the property’s shortfalls.

Illiquidity
Investment property rental yields are relatively low e.g., a house might yield an income of 2% to 2.5% p.a. of its value and an apartment 3% to 3.5% p.a. before expenses. After subtracting expenses such as council rates, insurance, maintenance, property management and so on, you may receive a net rental income of 1% to 2% p.a. And that’s before any interest expenses if you have outstanding mortgages.

An obvious negative attribute of property is that its illiquid. That is, you can’t gradually sell down your investment like you can with shares. Instead, it’s a case of selling all or nothing.

Investing a lot of your wealth in property whilst you are working can make sense because during that stage of life

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> A common property investing rule-of-thumb is that you should “buy property and never sell”. That’s because prices always trend higher over time which means you benefit from compounding capital growth.

Of course, the rule-of-thumb should be adjusted to include “buy quality property and never sell” to ensure you maximise investment returns.

But the reality is, that sometimes the smartest thing to do, is to sell a property, even if it is a quality asset, if it helps you move forward towards achieving your goals.

I discuss four of the most common scenarios where I have recommended clients sell property.

Poor investment returns
Of course, the most obvious reason for selling a property is that its past performance has been poor i.e., a low capital growth rate. But most importantly, you must form a view about whether future returns are likely to be acceptable or not. If the assets fundamentals are sound, then it’s likely you should retain the asset. Sometimes investing requires patience and discipline, which I’ll write more about in a few weeks.

My previous analysis concluded that a property needs to underperform by at least 2% p.a. to warrant selling it. Therefore, if a property has only slightly underperformed (by say 1% p.a.), it may not be worth selling because doing so crystalises CGT liabilities and selling costs.

I believe that there’s almost never a bad time to buy a quality asset (property). By extension that means there’s never a bad time to sell a dud asset. Whilst that is true to a large extent, it is wise to be strategic about it. A dud asset almost always has one or more impairments (e.g. located on a busy road). Afterall, that’s what makes them duds. As such, they can be more difficult to sell in a balanced or buyer's market. As such, it is best to sell impaired assets in a buoyant (seller’s) market. The rationale is that the high level of buyer demand and positive market sentiment may encourage some potential buyers to overlook the property’s shortfalls.

Illiquidity
Investment property rental yields are relatively low e.g., a house might yield an income of 2% to 2.5% p.a. of its value and an apartment 3% to 3.5% p.a. before expenses. After subtracting expenses such as council rates, insurance, maintenance, property management and so on, you may receive a net rental income of 1% to 2% p.a. And that’s before any interest expenses if you have outstanding mortgages.

An obvious negative attribute of property is that its illiquid. That is, you can’t gradually sell down your investment like you can with shares. Instead, it’s a case of selling all or nothing.

Investing a lot of your wealth in property whilst you are working can make sense because during that stage of life

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 2ab5b5d9-9051-46b0-a164-244435826ab2 Wed, 13 Apr 2022 08:00:00 +1000 1092 investopoly,wemyss,rules of the lending game,prosolution,property investing,property demand,property prices,property supply,invest in property,brisbane property,investment grade,property market crash,property crash 1 205 false Three steps to develop your own financial plan Three steps to develop your own financial plan A few weeks ago I wrote a blog about the one thing that stops most people from making the most of their financial opportunities including making regular investments.

It was my thesis that a lack of context is the main cause. Having a long-term plan provides you with the context required to make mistake-free financial decisions. It is difficult to work out what investments to make (and when) if you don’t know where you are heading and how your will get there.

A financial plan will give you sufficient context in which to measure your financial decisions against.

We follow three distinct steps to develop and implement a financial plan for our clients. We have refined this process over many decades and have found this disciplined and logical approach helps develop very efficient evidence-based plans.

Step 1: Develop a high-level strategy
Determine your future cash flow and net worth
The first step is to build a financial model. A financial model will forecast your future income and expenses and therefore, how much cash flow you have to allocate towards investing. It should also forecast your assets and liabilities i.e. net worth.

The purpose of a financial model is to do two things.

Firstly, to measure whether your chosen strategy will work i.e., achieve your goals. For example, if you plan to invest in 2 properties and maximise super contributions, will that be enough to generate $100k p.a. of income (after-tax) that you require in retirement?

The second purpose of a financial model is to compare strategies to eliminate inferior ones and pick the one that has the highest probability of working i.e., the one that generates the highest returns for the lowest risk.

Financial modelling is part-art, part-science. The science bit is the Excel skills and technical knowledge required to build financial models. The art is knowing what strategies work best in various situations, which can only be acquired with many years/decades of experience. Realistically, most people won’t have the skill and experience to complete their own financial modelling.

Mixture of asset classes
Most people would be well served by investing in a mixture of asset classes including super, residential property, share market investments and so forth. The financial modelling exercise will help you determine optimum mixture of asset classes that suits your goals, risk profile and financial position.

Level of gearing
Whether you will borrow money to invest and if so, to what extent is a major strategic consideration. A financial model will assist with determining the right level of gearing. It is important you consider whether you will have enough cash flow to service debt. But even more important is to determine to what extent you need to repay debt before you retire. It is prudent to not take high levels of debt into retirement so you must have a debt retirement strategy.

Of course, a strategy is only useful if it can be implemented, so you will need to consider your present and future borrowing capacity i.e., how much will the banks lend you.

Ownership structures
Once you have determined the mixture of asset classes that you will invest in and how much gearing you will adopt, you can then determine the best investment ownership structures. Considerations include income tax payable over your lifetime, land tax (for property), CGT if your strategy includes selling, current and projected cash flow, borrowing capacity and asset protection.

Retain high-level focus
<

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> A few weeks ago I wrote a blog about the one thing that stops most people from making the most of their financial opportunities including making regular investments.

It was my thesis that a lack of context is the main cause. Having a long-term plan provides you with the context required to make mistake-free financial decisions. It is difficult to work out what investments to make (and when) if you don’t know where you are heading and how your will get there.

A financial plan will give you sufficient context in which to measure your financial decisions against.

We follow three distinct steps to develop and implement a financial plan for our clients. We have refined this process over many decades and have found this disciplined and logical approach helps develop very efficient evidence-based plans.

Step 1: Develop a high-level strategy
Determine your future cash flow and net worth
The first step is to build a financial model. A financial model will forecast your future income and expenses and therefore, how much cash flow you have to allocate towards investing. It should also forecast your assets and liabilities i.e. net worth.

The purpose of a financial model is to do two things.

Firstly, to measure whether your chosen strategy will work i.e., achieve your goals. For example, if you plan to invest in 2 properties and maximise super contributions, will that be enough to generate $100k p.a. of income (after-tax) that you require in retirement?

The second purpose of a financial model is to compare strategies to eliminate inferior ones and pick the one that has the highest probability of working i.e., the one that generates the highest returns for the lowest risk.

Financial modelling is part-art, part-science. The science bit is the Excel skills and technical knowledge required to build financial models. The art is knowing what strategies work best in various situations, which can only be acquired with many years/decades of experience. Realistically, most people won’t have the skill and experience to complete their own financial modelling.

Mixture of asset classes
Most people would be well served by investing in a mixture of asset classes including super, residential property, share market investments and so forth. The financial modelling exercise will help you determine optimum mixture of asset classes that suits your goals, risk profile and financial position.

Level of gearing
Whether you will borrow money to invest and if so, to what extent is a major strategic consideration. A financial model will assist with determining the right level of gearing. It is important you consider whether you will have enough cash flow to service debt. But even more important is to determine to what extent you need to repay debt before you retire. It is prudent to not take high levels of debt into retirement so you must have a debt retirement strategy.

Of course, a strategy is only useful if it can be implemented, so you will need to consider your present and future borrowing capacity i.e., how much will the banks lend you.

Ownership structures
Once you have determined the mixture of asset classes that you will invest in and how much gearing you will adopt, you can then determine the best investment ownership structures. Considerations include income tax payable over your lifetime, land tax (for property), CGT if your strategy includes selling, current and projected cash flow, borrowing capacity and asset protection.

Retain high-level focus
<

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 8cba7fa1-cf64-4db2-9246-0255e511ee02 Wed, 06 Apr 2022 08:00:00 +1000 1276 investopoly,rules of the lending game,wemyss,financial advisor,financial planning,financial advice,financial advsier,investment decisions,long term plan 1 204 false 2022 Federal Budget Summary: What's in it for you? 2022 Federal Budget Summary: What's in it for you? This blog summarises the initiative contained in the 2022 Federal Budget announced on 29 March 2022.

Budget initiatives that might affect you
Extended the home loan guarantee scheme
The First Home Loan Deposit Scheme (FHLDS) allows borrowers to borrow more than 80% of a property’s value whilst avoiding the cost of lenders mortgage insurance (LMI), because the government guarantees part of the loan. The government has announced it will increase the number of places from 20,000 to 50,000 per year. 10,000 of these places are reserved for regional home buyers and 5,000 for single parents.

Cut the cost of petrol and diesel by 24 cents per litre
Effective immediately, the fuel excise (which is currently 44.2 cents per litre) will be cut by half for 6 months i.e. until the end of September. As excise also attracts GST, the saving per litre will be a little over 24 cents. This is estimated to save drivers between $10 and $20 per tank.

Excise is charged when fuel is deposited into petrol retailers’ tanks (at the service station). Therefore, this saving will not flow through to consumers until fuel stocks are replenished, which should occur over the next couple of weeks.

A tax refund of up to $420 when you lodge your tax return after 1 July 2022
If you earn less than $126,000, you would have been entitled to the Low and middle income tax offset (LMITO) since the 2018/19 financial year. The maximum tax offset used to be $1,080 if you earned $90,000. For this financial year ending 30 June 2022, the maximum LMITO will be increase by $420 to $1,500. If you earn close to $90,000, your tax return will be $420 more when you lodge your 2021/22 tax return.

One-off payment to pensioners
Next month, the government will make a one-off, tax-exempt payment of $250 to eligible pensioners, welfare recipients, veterans, and eligible concession card holders.

Work-related RAT tests are tax-deductible
The cost to purchase Rapid Antigen Tests for work-related purposes are tax-deductible (and exempt from Fridge Benefits Tax if provided by employers).

Minimum super pension halved for another year
If you are retired and have a super pension account, you must draw a minimum annual pension that is based on your age; e.g. if you are under 65 you must draw 4% of your balance at the beginning of the financial year. The government will halve this minimum amount for the last two financial years to help people preserve their super balance given recent share market volatility i.e. so they didn’t have to sell down investments. This initiative will extend for one further year (i.e. 2022/23).

Small business tax instalments to be based on actual profitability
Small businesses must pay quarterly income tax instalments. The amount of the instalments is based on the business’ previous financial year. The government will change the system from the start of 2024 such that instalments are based on actual quarterly profit. This should help small business improve their cash flow management.

Additional 20% tax deduction for small business
Small business’ will be entitled to an additional 20% deduction for the cost of employees attending external training (provided by Regi

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> This blog summarises the initiative contained in the 2022 Federal Budget announced on 29 March 2022.

Budget initiatives that might affect you
Extended the home loan guarantee scheme
The First Home Loan Deposit Scheme (FHLDS) allows borrowers to borrow more than 80% of a property’s value whilst avoiding the cost of lenders mortgage insurance (LMI), because the government guarantees part of the loan. The government has announced it will increase the number of places from 20,000 to 50,000 per year. 10,000 of these places are reserved for regional home buyers and 5,000 for single parents.

Cut the cost of petrol and diesel by 24 cents per litre
Effective immediately, the fuel excise (which is currently 44.2 cents per litre) will be cut by half for 6 months i.e. until the end of September. As excise also attracts GST, the saving per litre will be a little over 24 cents. This is estimated to save drivers between $10 and $20 per tank.

Excise is charged when fuel is deposited into petrol retailers’ tanks (at the service station). Therefore, this saving will not flow through to consumers until fuel stocks are replenished, which should occur over the next couple of weeks.

A tax refund of up to $420 when you lodge your tax return after 1 July 2022
If you earn less than $126,000, you would have been entitled to the Low and middle income tax offset (LMITO) since the 2018/19 financial year. The maximum tax offset used to be $1,080 if you earned $90,000. For this financial year ending 30 June 2022, the maximum LMITO will be increase by $420 to $1,500. If you earn close to $90,000, your tax return will be $420 more when you lodge your 2021/22 tax return.

One-off payment to pensioners
Next month, the government will make a one-off, tax-exempt payment of $250 to eligible pensioners, welfare recipients, veterans, and eligible concession card holders.

Work-related RAT tests are tax-deductible
The cost to purchase Rapid Antigen Tests for work-related purposes are tax-deductible (and exempt from Fridge Benefits Tax if provided by employers).

Minimum super pension halved for another year
If you are retired and have a super pension account, you must draw a minimum annual pension that is based on your age; e.g. if you are under 65 you must draw 4% of your balance at the beginning of the financial year. The government will halve this minimum amount for the last two financial years to help people preserve their super balance given recent share market volatility i.e. so they didn’t have to sell down investments. This initiative will extend for one further year (i.e. 2022/23).

Small business tax instalments to be based on actual profitability
Small businesses must pay quarterly income tax instalments. The amount of the instalments is based on the business’ previous financial year. The government will change the system from the start of 2024 such that instalments are based on actual quarterly profit. This should help small business improve their cash flow management.

Additional 20% tax deduction for small business
Small business’ will be entitled to an additional 20% deduction for the cost of employees attending external training (provided by Regi

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss a85b7159-6b95-4674-86a2-9603dbb5b4c3 Wed, 30 Mar 2022 07:00:00 +1100 755 investopoly,rules of the lending game,wemyss,federal budget,superannuation,corporate tax,2022 budget,first home buyers,MLITO 1 203 false Why haven't you invested as much as you could and should have? Why haven't you invested as much as you could and should have? It is very common for people to make an initial investment e.g., buy a parcel of shares or an investment property, but fail to make any further investments for many years or decades. Why does this happen? What is paralysing their ability to make investment decisions?

Perhaps you don’t have enough time
We use lack of time as an excuse for not doing many things. But if we are honest with ourselves, if the matter was important to us, we’d make time. It’s easy to let our time get absorbed by the matters that appear urgent at the expense of the matters that are important. Or sometimes we tackle the seemingly ‘easy’ tasks first – the easy wins – and procrastinate on the more complex matters. You can never maximise your position without good time management and discipline.

But when it comes to building wealth, lack of time is a very poor excuse. If you think investing successfully will absorb a lot of your time, then its likely you've got the wrong advisors or adopted the wrong approach.

Many of my clients wouldn’t spend more than a few hours a year thinking about or dealing with their investments.

Maybe it feels too risky
Making a choice about where to invest your money can feel risky because you fear making a mistake. Financial mistakes can be costly. And you have worked hard to get to your current financial position, and you don’t want to jeopardise it.

Often, we think the solution to minimising this uncertainty (risky feeling) is getting more information. As such, we postpone making a decision so we can research more, talk to more people, listen to more podcasts, observe markets and so forth.

But this approach rarely works because it’s not the lack information that matters. It’s the lack of experience.

Experience helps us decide when and how to use the knowledge we have. Knowledge is only useful when we know how and when to use it. In this case, it’s best to ask a ‘who’ not ‘what’ question.

Whilst a lack of experience might be preventing people from investing regularly, I think there’s a bigger reason.

Maybe insufficient capacity to invest
It is possible that you haven’t invested more because you do not have the capacity to do so e.g., cash flow, cash savings and/or borrowing capacity. If you fall into this category, then this blog isn’t about you. The blog is about people that have the capacity to invest more but have not done so.

It’s impossible to make confident financial decisions without any ‘context’
If a person stopped you in the street to ask you for directions but didn’t know where they were heading (i.e., destination), would you be able to help them? Of course not. The same is true for investment decisions.

If you asked me whether you should buy an investment property, how could I give you an answer without knowing what your financial and lifestyle goals are and your plan to achieve them. It is possible that investing in a property would hinder your abilities to achieve these goals.

One of the most valuable outcomes of developing an evidence-based investment strategy is that it provides you a clear context for making all financial decisions. Such important decisions can include where, when and how much to invest in the future, whether buying a beach house will compromise your ability to enjoy a comfortable retirement, whether you can afford to make a career change (that results in a lower income) and so on.

Context is your missing ingredient
It is my thesis that most people fail to progress their investment journey becau

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> It is very common for people to make an initial investment e.g., buy a parcel of shares or an investment property, but fail to make any further investments for many years or decades. Why does this happen? What is paralysing their ability to make investment decisions?

Perhaps you don’t have enough time
We use lack of time as an excuse for not doing many things. But if we are honest with ourselves, if the matter was important to us, we’d make time. It’s easy to let our time get absorbed by the matters that appear urgent at the expense of the matters that are important. Or sometimes we tackle the seemingly ‘easy’ tasks first – the easy wins – and procrastinate on the more complex matters. You can never maximise your position without good time management and discipline.

But when it comes to building wealth, lack of time is a very poor excuse. If you think investing successfully will absorb a lot of your time, then its likely you've got the wrong advisors or adopted the wrong approach.

Many of my clients wouldn’t spend more than a few hours a year thinking about or dealing with their investments.

Maybe it feels too risky
Making a choice about where to invest your money can feel risky because you fear making a mistake. Financial mistakes can be costly. And you have worked hard to get to your current financial position, and you don’t want to jeopardise it.

Often, we think the solution to minimising this uncertainty (risky feeling) is getting more information. As such, we postpone making a decision so we can research more, talk to more people, listen to more podcasts, observe markets and so forth.

But this approach rarely works because it’s not the lack information that matters. It’s the lack of experience.

Experience helps us decide when and how to use the knowledge we have. Knowledge is only useful when we know how and when to use it. In this case, it’s best to ask a ‘who’ not ‘what’ question.

Whilst a lack of experience might be preventing people from investing regularly, I think there’s a bigger reason.

Maybe insufficient capacity to invest
It is possible that you haven’t invested more because you do not have the capacity to do so e.g., cash flow, cash savings and/or borrowing capacity. If you fall into this category, then this blog isn’t about you. The blog is about people that have the capacity to invest more but have not done so.

It’s impossible to make confident financial decisions without any ‘context’
If a person stopped you in the street to ask you for directions but didn’t know where they were heading (i.e., destination), would you be able to help them? Of course not. The same is true for investment decisions.

If you asked me whether you should buy an investment property, how could I give you an answer without knowing what your financial and lifestyle goals are and your plan to achieve them. It is possible that investing in a property would hinder your abilities to achieve these goals.

One of the most valuable outcomes of developing an evidence-based investment strategy is that it provides you a clear context for making all financial decisions. Such important decisions can include where, when and how much to invest in the future, whether buying a beach house will compromise your ability to enjoy a comfortable retirement, whether you can afford to make a career change (that results in a lower income) and so on.

Context is your missing ingredient
It is my thesis that most people fail to progress their investment journey becau

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss ab289567-5637-4ea3-b1e8-81699870c661 Wed, 23 Mar 2022 08:00:00 +1100 616 investopoly,rules of the lending game,wemyss,financial advisor,financial planning,financial advice,financial advsier,investment decisions,long term plan, 1 202 false Super: What are your options when you retire? Super: What are your options when you retire? Even though its compulsory to invest money in superannuation, many people do not understand their options once they retire.

This blog provides a summary. However, of course, everyone’s situation is different. Some super funds have different rules and there may be exceptions to some rules, so it’s important you receive personalised advice from an independent financial advisor.

When can you access your super?
The rules that govern when you can access super are contained in the SIS Act and they are called the ‘conditions of release’. There are three ways you can access your super benefit:
1. You have reached your preservation age, which is age 60 for most people (or sooner if you were born prior to 1 July 1964), you have ceased employment and have no intentions of becoming reemployed in the future;
2. If you have reached your preservation age but are younger than 65 and still working, you are able to commence a Transition-to-Retirement Income Stream (TRIS) pension; or
3. You are 65 years of age, regardless of employment status.

These minimum rules apply to all super funds. Super funds are permitted to impose tougher rules than outlined above, so it’s important to check with your super fund.

You have two options
When you retire you generally have two options:
1. Withdraw your full super balance as a lump sum; or
2. Start an income stream pension.

If you are a member of a defined benefit fund, you may have additional options such as commencing an indexed lifetime pension.

If you opt to take your benefit as a lump sum, some of your benefit (i.e. the “taxable – untaxed element”) may be taxed at a rate of up to 17% and the “taxable – taxed element” will be tax-free.

Given the tax advantages of leaving your money in super (outlined below), most people are much better off to opt to start an income stream pension.

Consequences of starting a pension
You can start a pension by rolling over your accumulation account into a pension account. You can roll over up to $1.7 million into a pension account (this is a lifetime cap – called the transfer balance cap). Any account balance that exceeds $1.7 million must be retained in your accumulation account.

Pension super accounts attract a zero-tax rate. That means you do not pay any tax on any investment income or capital gains that your super balance generates.

If you commence a pension, you must withdraw a minimum pension amount, which is based on your age. For example, its 4% of your super balance at the beginning of the financial year if you are younger than 65, or 5% if you are aged between 65 and 74. There is no maximum i.e. you can withdraw as much as you like from super each year. Again, typically, the goal is to preserve your super balance as much as possible as it’s a zero-tax environment.

All income that you receive personally from an income stream pension is tax-free if you are 60 years or older i.e. it does not attract any personal income tax.

If you withdraw money (pension) from super but don’t spend it i.e. its more than you need, you may be able to put it back into super via making a non-concessional contribution. If

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Even though its compulsory to invest money in superannuation, many people do not understand their options once they retire.

This blog provides a summary. However, of course, everyone’s situation is different. Some super funds have different rules and there may be exceptions to some rules, so it’s important you receive personalised advice from an independent financial advisor.

When can you access your super?
The rules that govern when you can access super are contained in the SIS Act and they are called the ‘conditions of release’. There are three ways you can access your super benefit:
1. You have reached your preservation age, which is age 60 for most people (or sooner if you were born prior to 1 July 1964), you have ceased employment and have no intentions of becoming reemployed in the future;
2. If you have reached your preservation age but are younger than 65 and still working, you are able to commence a Transition-to-Retirement Income Stream (TRIS) pension; or
3. You are 65 years of age, regardless of employment status.

These minimum rules apply to all super funds. Super funds are permitted to impose tougher rules than outlined above, so it’s important to check with your super fund.

You have two options
When you retire you generally have two options:
1. Withdraw your full super balance as a lump sum; or
2. Start an income stream pension.

If you are a member of a defined benefit fund, you may have additional options such as commencing an indexed lifetime pension.

If you opt to take your benefit as a lump sum, some of your benefit (i.e. the “taxable – untaxed element”) may be taxed at a rate of up to 17% and the “taxable – taxed element” will be tax-free.

Given the tax advantages of leaving your money in super (outlined below), most people are much better off to opt to start an income stream pension.

Consequences of starting a pension
You can start a pension by rolling over your accumulation account into a pension account. You can roll over up to $1.7 million into a pension account (this is a lifetime cap – called the transfer balance cap). Any account balance that exceeds $1.7 million must be retained in your accumulation account.

Pension super accounts attract a zero-tax rate. That means you do not pay any tax on any investment income or capital gains that your super balance generates.

If you commence a pension, you must withdraw a minimum pension amount, which is based on your age. For example, its 4% of your super balance at the beginning of the financial year if you are younger than 65, or 5% if you are aged between 65 and 74. There is no maximum i.e. you can withdraw as much as you like from super each year. Again, typically, the goal is to preserve your super balance as much as possible as it’s a zero-tax environment.

All income that you receive personally from an income stream pension is tax-free if you are 60 years or older i.e. it does not attract any personal income tax.

If you withdraw money (pension) from super but don’t spend it i.e. its more than you need, you may be able to put it back into super via making a non-concessional contribution. If

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss a2fb4d74-3d96-4c11-a833-cffca2ddaf9d Wed, 16 Mar 2022 08:00:00 +1100 1162 investopoly,wemyss,rules of the lending game,prosolution private clients,industry super funds,superannuation,super,super funds,super contributions,top industry super funds 1 201 false Will higher interest rates cause property prices to fall? Will higher interest rates cause property prices to fall? Vocal market commentor and fund manager, Chris Joye wrote in the AFR in November last year that Australian house prices could fall by 15% to 25% after the RBA starts increasing interest rates (here’s a copy of that article).

Of course, there are many property doomsayers that perpetually (and often inaccurately) predict property market crashes. However, Chris is not one of these people. In fact, Chris’ predictions are usually quite accurate. However, on this occasion, I disagree with his prediction, and I share the reasons why below.

However, more importantly, I wanted to discuss what impact rising interest rates might have on the property market.

It’s interesting that almost everyone disagrees with the RBA
The RBA has persistently reminded us that it will not raise the cash rate until inflation is sustainably within its 2% to 3% band. And for that to be the case, the wage inflation rate must be sustainably in the 3% to 4% range, according to the RBA. Price inflation can’t remain sustainably high unless it’s supported by rising wages. Last week, wage inflation printed at 2.3% p.a., so we are some way off the RBA’s target.

Despite the RBA’s clear indication, the market stubbornly predicts that interest rates will rise quickly over the course of this year. In fact, this chart shows the money market is currently pricing in 7 to 8 rate hikes (of 0.25% each) over the next 16 months. This seems over ambitious.

So, why would the market ignore the RBA’s commentary and price in more rate hikes? The RBA’s in full control of the cash rate, so shouldn’t we listen to it? It’s like your child telling all her friends that she thinks she’s coming to the party when she’s grounded. I suspect the answer is that markets are imperfect, especially in the short run.

It is worth noting that Australia is in a much different position to the US. In the US, inflation is very high (at 7.5% p.a.) which is underpinned by historically high wage inflation (at 4.5% p.a. which is a 40-year high). One of the main problems is that the US participation rate hasn’t bounced back like it has in Australia and other countries, which results in a tighter labour market. The high Covid death rate per capita in the USA might be responsible for this.

It is therefore very likely that the US (Fed Reserve) will hike rates by 1% or more during 2022, but the RBA is likely to do very little until wage inflation increases.

Higher rates do impact asset values
Theatrically, increasing the cash rate should result in lower asset values. There are a few fundamental reasons for this.

Firstly, as it becomes more expensive to borrow money, people become more careful with how they invest these borrowings i.e. they are more careful to not overpay for a property. Also, demand for new borrowings falls. Less capital flowing into the market results in lower demand and all things remaining equal, it will lead to lower prices.

Secondly, as interest rates rise, lower-risk investment options such as term deposits become more attractive, compared to higher risk options such as shares or property. Many investors prefer lower risk options but have been forced to invest elsewhere (in higher risk investments), whilst interest rates are close to zero.

Therefore, theoretically, higher rates should lead to lower asset prices.

Firstly, owner-occupiers don’t c

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Vocal market commentor and fund manager, Chris Joye wrote in the AFR in November last year that Australian house prices could fall by 15% to 25% after the RBA starts increasing interest rates (here’s a copy of that article).

Of course, there are many property doomsayers that perpetually (and often inaccurately) predict property market crashes. However, Chris is not one of these people. In fact, Chris’ predictions are usually quite accurate. However, on this occasion, I disagree with his prediction, and I share the reasons why below.

However, more importantly, I wanted to discuss what impact rising interest rates might have on the property market.

It’s interesting that almost everyone disagrees with the RBA
The RBA has persistently reminded us that it will not raise the cash rate until inflation is sustainably within its 2% to 3% band. And for that to be the case, the wage inflation rate must be sustainably in the 3% to 4% range, according to the RBA. Price inflation can’t remain sustainably high unless it’s supported by rising wages. Last week, wage inflation printed at 2.3% p.a., so we are some way off the RBA’s target.

Despite the RBA’s clear indication, the market stubbornly predicts that interest rates will rise quickly over the course of this year. In fact, this chart shows the money market is currently pricing in 7 to 8 rate hikes (of 0.25% each) over the next 16 months. This seems over ambitious.

So, why would the market ignore the RBA’s commentary and price in more rate hikes? The RBA’s in full control of the cash rate, so shouldn’t we listen to it? It’s like your child telling all her friends that she thinks she’s coming to the party when she’s grounded. I suspect the answer is that markets are imperfect, especially in the short run.

It is worth noting that Australia is in a much different position to the US. In the US, inflation is very high (at 7.5% p.a.) which is underpinned by historically high wage inflation (at 4.5% p.a. which is a 40-year high). One of the main problems is that the US participation rate hasn’t bounced back like it has in Australia and other countries, which results in a tighter labour market. The high Covid death rate per capita in the USA might be responsible for this.

It is therefore very likely that the US (Fed Reserve) will hike rates by 1% or more during 2022, but the RBA is likely to do very little until wage inflation increases.

Higher rates do impact asset values
Theatrically, increasing the cash rate should result in lower asset values. There are a few fundamental reasons for this.

Firstly, as it becomes more expensive to borrow money, people become more careful with how they invest these borrowings i.e. they are more careful to not overpay for a property. Also, demand for new borrowings falls. Less capital flowing into the market results in lower demand and all things remaining equal, it will lead to lower prices.

Secondly, as interest rates rise, lower-risk investment options such as term deposits become more attractive, compared to higher risk options such as shares or property. Many investors prefer lower risk options but have been forced to invest elsewhere (in higher risk investments), whilst interest rates are close to zero.

Therefore, theoretically, higher rates should lead to lower asset prices.

Firstly, owner-occupiers don’t c

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss fba47c91-9262-43a3-9c32-4a85be3aed4f Wed, 09 Mar 2022 10:00:00 +1100 1605 investopoly,wemyss,rules of the lending game,prosolution,property investing,property demand,property prices,property supply,invest in property,investment grade,property market crash,property crash,interest rates, 1 200 false Is it a good strategy to renovate or develop an investment property? Is it a good strategy to renovate or develop an investment property? The value of a property consists of two components being the land plus any improvements i.e., the dwelling. Generally, land appreciates in value whereas buildings depreciate over time due to wear and tear.

It is possible to manufacture equity in a property by making improvements e.g. renovating/rebuilding the existing dwelling or constructing multiple dwellings. This occurs when the end value of the property exceeds its cost e.g. spending $100,000 on a renovation improves its value by $150,000, thereby “creating” $50,000 in equity.

This blog considers the merits of this strategy.

The theory (maths)
As noted above, a property’s value is the aggregate of the land value plus the building value. In investment-grade locations, it is not unusual for the land value to represent at least 60% of the total value and the improvements 40%.

If we assume the long-term capital growth rate for these types of assets is likely to be in excess of 7% p.a. (which isn’t uncommon), then the land must appreciate at a higher rate to offset the building’s depreciation to result in an overall appreciation rate of 7% p.a. If we assume that the building depreciates by 2.5% p.a., then the land must appreciate by 13.3% p.a.

For example, if a property is worth $100, then the building value is $40, and it will depreciate by $1 p.a. (being 2.5%) and the land value which is $60 will appreciate by $8 (being 13.3%). Therefore, its total value after one year will be $100 - $1 + $8 = $107, being a 7% p.a. growth rate.

Therefore, to maximise your expected rate of capital growth, you must spend as much as possible on the land in return for spending as little as possible on the building.

Capital improvements create a once-off value appreciation
It is common for the market value of a newly renovated or constructed property to exceed its hard cost. This occurs for a few reasons:
§ Completing building works takes several months or years. In addition, there’s a lot of work involved in coordinating and meeting with architects, buildings and so forth. Not everyone wants to go through that process. As such, buyers may pay a premium to secure a move-in-ready dwelling.
§ Undertaking building works is not a riskless exercise. Things can go wrong including cost blow outs and so on. As such, some purchasers will pay a premium to avoid these risks.
§ Newly constructed or renovated properties are more marketable/appealing because they are in better condition. Their improved marketability means they will attract a higher price.
§ Subdividing creates value because you create more affordable parcels of land. For example, a developer might construct 4 townhouses on a 1,000 sqm block of land. There’s a lot more people that can afford to buy a townhouse on 250 sqm of land compared to a house on 1,000 sqm of land.

The market will discount properties in disrepair
For the same reasons that newly constructed or renovated properties command a premium, properties that are in disrepair tend to attract discounts. That’s because fewer buyers have the time and appetite to buy a property that needs refurbishment.

To maximise your capital growth, it is best to maintain the dwelling in a state that is in keeping with buyer expectations.

Benefits from making capital improvements
Renovating or rebuilding an investment property can give rise to a few possible benefits:
§ Improved rental yield – typically tenants will pay a higher rental rate for dwellings in better condition, larger accommodation or more amenities.
§ Depreciation benefits – capital works can typically be depreciated at a rate of 2.5% p.a. and plant and equipment (i.e.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> The value of a property consists of two components being the land plus any improvements i.e., the dwelling. Generally, land appreciates in value whereas buildings depreciate over time due to wear and tear.

It is possible to manufacture equity in a property by making improvements e.g. renovating/rebuilding the existing dwelling or constructing multiple dwellings. This occurs when the end value of the property exceeds its cost e.g. spending $100,000 on a renovation improves its value by $150,000, thereby “creating” $50,000 in equity.

This blog considers the merits of this strategy.

The theory (maths)
As noted above, a property’s value is the aggregate of the land value plus the building value. In investment-grade locations, it is not unusual for the land value to represent at least 60% of the total value and the improvements 40%.

If we assume the long-term capital growth rate for these types of assets is likely to be in excess of 7% p.a. (which isn’t uncommon), then the land must appreciate at a higher rate to offset the building’s depreciation to result in an overall appreciation rate of 7% p.a. If we assume that the building depreciates by 2.5% p.a., then the land must appreciate by 13.3% p.a.

For example, if a property is worth $100, then the building value is $40, and it will depreciate by $1 p.a. (being 2.5%) and the land value which is $60 will appreciate by $8 (being 13.3%). Therefore, its total value after one year will be $100 - $1 + $8 = $107, being a 7% p.a. growth rate.

Therefore, to maximise your expected rate of capital growth, you must spend as much as possible on the land in return for spending as little as possible on the building.

Capital improvements create a once-off value appreciation
It is common for the market value of a newly renovated or constructed property to exceed its hard cost. This occurs for a few reasons:
§ Completing building works takes several months or years. In addition, there’s a lot of work involved in coordinating and meeting with architects, buildings and so forth. Not everyone wants to go through that process. As such, buyers may pay a premium to secure a move-in-ready dwelling.
§ Undertaking building works is not a riskless exercise. Things can go wrong including cost blow outs and so on. As such, some purchasers will pay a premium to avoid these risks.
§ Newly constructed or renovated properties are more marketable/appealing because they are in better condition. Their improved marketability means they will attract a higher price.
§ Subdividing creates value because you create more affordable parcels of land. For example, a developer might construct 4 townhouses on a 1,000 sqm block of land. There’s a lot more people that can afford to buy a townhouse on 250 sqm of land compared to a house on 1,000 sqm of land.

The market will discount properties in disrepair
For the same reasons that newly constructed or renovated properties command a premium, properties that are in disrepair tend to attract discounts. That’s because fewer buyers have the time and appetite to buy a property that needs refurbishment.

To maximise your capital growth, it is best to maintain the dwelling in a state that is in keeping with buyer expectations.

Benefits from making capital improvements
Renovating or rebuilding an investment property can give rise to a few possible benefits:
§ Improved rental yield – typically tenants will pay a higher rental rate for dwellings in better condition, larger accommodation or more amenities.
§ Depreciation benefits – capital works can typically be depreciated at a rate of 2.5% p.a. and plant and equipment (i.e.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss e74e0766-d096-4fff-b14d-5bdf2ba933ad Wed, 02 Mar 2022 08:00:00 +1100 1552 investopoly,wemyss,rules of the lending game,prosolution,property investing,property demand,property prices,property supply,invest in property,brisbane property,investment grade,property market crash,property crash 1 199 false Playing the long game is not always easy but it is the most powerful approach Playing the long game is not always easy but it is the most powerful approach In my book, Investopoly, I outlined 8 investing rules that if followed, will help you build wealth and avoid making costly mistakes. These 8 rules are evidenced-based which I have refined over the past 20+ years.

Rule number one is; play the long game. Arguably, it’s the most important rule because I’ve observed that this is the most common mistakes investors make i.e., they don’t play the long game. Whilst this rule is simple to understand, its often very challenging to follow.

Short term profit does not create long term value
Which investment option would you prefer (you can only pick one)? Invest in an index (share) fund which will accumulate $500,000 of additional wealth over the next 10 years or follow a “stock tip” which will generate a $50,000 profit within 9 months?

Unfortunately, many investors would pick the stock tip option. They might justify their decision by planning to invest in the long-term option after they have banked a quick profit, but they rarely do. Instead, they search for the next short-term hit. To many, making a quick profit feels less risky than waiting 10+ years for a much larger gain.

Three reasons short-term opportunities are inferior
I recently came across an investment opportunity to complete a 4-townhouse development which was projected to generate between $460k to $550k in pre-tax profit (which equated to a return of between 15% and 18%). It may take 2 to 3 years to complete this development.

Of course, an alternative to this investment is to purchase a high-quality, investment-grade property and hold it for the long term. This is a better option for 3 reasons (which is why I didn’t pursue the property development).

(1) Risk-adjusted returns
Risk refers to the chance that your actual returns will vary from your expected returns i.e. that the investment doesn’t achieve what you expect. Low risk investments produce very predictable returns, such as term deposits – as the return is virtually guaranteed. An investment’s volatility rate is a good measure of its risk.

You cannot compare two investing options without also comparing their inherent risk. This is called a risk-adjusted return.

Over long periods of time, a high-quality investment property (house) should produce an average capital growth rate of at least 7% p.a. to 8% p.a. plus a net (after all expenses) rental yield of at least 1% p.a. I have previously calculated that Australian property has a historical volatility rate of circa 10%.

Property developments can present several risks including cost blowouts, failure to achieve your desired sales price due to changes in the market, adverse changes in planning rules and so on. For the sake of this example, lets apply a volatility rate of 30% (for comparison, the share market’s volatility rate is circa 20%).

The Sharpe ratio is a commonly used methodology for calculating risk-adjusted returns. A higher Sharpe ratio is better as it means you receive a high return per unit of risk.

§ Development option: Return of 15% to 18% p.a., risk of 30% = Sharpe ratio of 0.48 (range is 0.43 to 0.53)
§ Long-term hold: Total return of 8% to 9% p.a., risk of 10% = Sharpe ratio of 0.65 (range is 0.60 to 0.70)

This shows that the long-term hold option provides the investor with a higher return relative to its risk.

(2) Perpetual re

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In my book, Investopoly, I outlined 8 investing rules that if followed, will help you build wealth and avoid making costly mistakes. These 8 rules are evidenced-based which I have refined over the past 20+ years.

Rule number one is; play the long game. Arguably, it’s the most important rule because I’ve observed that this is the most common mistakes investors make i.e., they don’t play the long game. Whilst this rule is simple to understand, its often very challenging to follow.

Short term profit does not create long term value
Which investment option would you prefer (you can only pick one)? Invest in an index (share) fund which will accumulate $500,000 of additional wealth over the next 10 years or follow a “stock tip” which will generate a $50,000 profit within 9 months?

Unfortunately, many investors would pick the stock tip option. They might justify their decision by planning to invest in the long-term option after they have banked a quick profit, but they rarely do. Instead, they search for the next short-term hit. To many, making a quick profit feels less risky than waiting 10+ years for a much larger gain.

Three reasons short-term opportunities are inferior
I recently came across an investment opportunity to complete a 4-townhouse development which was projected to generate between $460k to $550k in pre-tax profit (which equated to a return of between 15% and 18%). It may take 2 to 3 years to complete this development.

Of course, an alternative to this investment is to purchase a high-quality, investment-grade property and hold it for the long term. This is a better option for 3 reasons (which is why I didn’t pursue the property development).

(1) Risk-adjusted returns
Risk refers to the chance that your actual returns will vary from your expected returns i.e. that the investment doesn’t achieve what you expect. Low risk investments produce very predictable returns, such as term deposits – as the return is virtually guaranteed. An investment’s volatility rate is a good measure of its risk.

You cannot compare two investing options without also comparing their inherent risk. This is called a risk-adjusted return.

Over long periods of time, a high-quality investment property (house) should produce an average capital growth rate of at least 7% p.a. to 8% p.a. plus a net (after all expenses) rental yield of at least 1% p.a. I have previously calculated that Australian property has a historical volatility rate of circa 10%.

Property developments can present several risks including cost blowouts, failure to achieve your desired sales price due to changes in the market, adverse changes in planning rules and so on. For the sake of this example, lets apply a volatility rate of 30% (for comparison, the share market’s volatility rate is circa 20%).

The Sharpe ratio is a commonly used methodology for calculating risk-adjusted returns. A higher Sharpe ratio is better as it means you receive a high return per unit of risk.

§ Development option: Return of 15% to 18% p.a., risk of 30% = Sharpe ratio of 0.48 (range is 0.43 to 0.53)
§ Long-term hold: Total return of 8% to 9% p.a., risk of 10% = Sharpe ratio of 0.65 (range is 0.60 to 0.70)

This shows that the long-term hold option provides the investor with a higher return relative to its risk.

(2) Perpetual re

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 0ce59650-97b9-4160-8a64-9fa1c7df0508 Wed, 23 Feb 2022 10:00:00 +1100 1220 investopoly,rules of the lending game,wemyss,financial advisor,financial planning,financial advice,choosing a financial advsior,financial advsier 1 198 false Quality is King: Most important property investing golden rule Quality is King: Most important property investing golden rule There is one property investing golden rule that is more important than everything else. And if you nail this ‘one thing’, you are guaranteed to build wealth over the long run. This statement might sound sensationist, but I honestly cannot overstate this point.

The golden rule is that the quality of the property you invest in will drive its long-term investment returns. If you invest in an average quality property, your long-term returns are likely to be average. Of course, if you want above average returns, you must invest in above-average quality property.

This golden rule applies to all other assets classes as well, including shares, bonds, commercial property and so on.

What does ‘quality’ mean?
A quality property has the necessary attributes that sustains a level of buyer-demand that perpetually exceeds supply. This imbalance of supply-demand results in appreciating value/prices in the long-run. A high-quality property is often referred to as investment-grade.

It is worth discussing the factors that impact supply and demand.

In investment-grade locations, supply is fixed or diminishing
Supply is probably the easier of the two factors to understand and ascertain. Supply refers to both land supply and dwelling type/style.

Regarding land, it is important that the supply of land is fixed and finite. Consider a well-established, blue-chip suburb. In these locations there is rarely any vacant land available, often within a 10km to 20km radius. And there is no way that any new land can by ‘released’ for sale. However, in outer suburbs, land supply can be abundant due to land releases within a 20km radius. The further a property’s location is away from available vacant land, the tighter supply will be.

Property type and style also affect supply. For example, in high land value locations, the supply of houses rarely changes, because its rarely economical to complete small sub-divisions in high-land-value locations, so the number of houses/townhouses remains unchanged. However, the supply of apartments can more readily change e.g. when a developer buys a commercial site and builds a residential tower. An example of a property type on the opposite end of the scale is Victorian houses. Virtually no one is building Victorian houses anymore, so their supply is finite. In fact, some probably get demolished every year, so supply is probably diminishing.

Buyer-demand perpetually exceeds supply
Buyer-demand refers to the size of the pool of potential buyers that desire to own property in a particular location and can afford to do so.

Demand substantially exceeds supply
When the number of buyers exceeds the number of sellers, property prices tend to rise. Of course, that’s because buyers must be willing to pay more to successfully purchase a property.

It is important that you invest in locations when buyer demand substantially exceeds supply. Notionally, there might be 10 buyers for every one seller. This level of imbalance in supply and demand will ensure that property prices will withstand changes in supply (e.g. an unusual number of properties for sale) or demand (e.g. an economic recession causes buyer demand to reduce). Despite what happens, it is likely that the number of buyers will always exceed the number of sellers and prices will be supported.

Demand is diversified
When considering a property investment, it is wise to consider who might like to own said property. It is important that the property appeals to a variety of types of buyers. Again, notionally, if you have 10 potential buyers (as mentioned above), 3 of them might be self-fu

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> There is one property investing golden rule that is more important than everything else. And if you nail this ‘one thing’, you are guaranteed to build wealth over the long run. This statement might sound sensationist, but I honestly cannot overstate this point.

The golden rule is that the quality of the property you invest in will drive its long-term investment returns. If you invest in an average quality property, your long-term returns are likely to be average. Of course, if you want above average returns, you must invest in above-average quality property.

This golden rule applies to all other assets classes as well, including shares, bonds, commercial property and so on.

What does ‘quality’ mean?
A quality property has the necessary attributes that sustains a level of buyer-demand that perpetually exceeds supply. This imbalance of supply-demand results in appreciating value/prices in the long-run. A high-quality property is often referred to as investment-grade.

It is worth discussing the factors that impact supply and demand.

In investment-grade locations, supply is fixed or diminishing
Supply is probably the easier of the two factors to understand and ascertain. Supply refers to both land supply and dwelling type/style.

Regarding land, it is important that the supply of land is fixed and finite. Consider a well-established, blue-chip suburb. In these locations there is rarely any vacant land available, often within a 10km to 20km radius. And there is no way that any new land can by ‘released’ for sale. However, in outer suburbs, land supply can be abundant due to land releases within a 20km radius. The further a property’s location is away from available vacant land, the tighter supply will be.

Property type and style also affect supply. For example, in high land value locations, the supply of houses rarely changes, because its rarely economical to complete small sub-divisions in high-land-value locations, so the number of houses/townhouses remains unchanged. However, the supply of apartments can more readily change e.g. when a developer buys a commercial site and builds a residential tower. An example of a property type on the opposite end of the scale is Victorian houses. Virtually no one is building Victorian houses anymore, so their supply is finite. In fact, some probably get demolished every year, so supply is probably diminishing.

Buyer-demand perpetually exceeds supply
Buyer-demand refers to the size of the pool of potential buyers that desire to own property in a particular location and can afford to do so.

Demand substantially exceeds supply
When the number of buyers exceeds the number of sellers, property prices tend to rise. Of course, that’s because buyers must be willing to pay more to successfully purchase a property.

It is important that you invest in locations when buyer demand substantially exceeds supply. Notionally, there might be 10 buyers for every one seller. This level of imbalance in supply and demand will ensure that property prices will withstand changes in supply (e.g. an unusual number of properties for sale) or demand (e.g. an economic recession causes buyer demand to reduce). Despite what happens, it is likely that the number of buyers will always exceed the number of sellers and prices will be supported.

Demand is diversified
When considering a property investment, it is wise to consider who might like to own said property. It is important that the property appeals to a variety of types of buyers. Again, notionally, if you have 10 potential buyers (as mentioned above), 3 of them might be self-fu

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 85f22d55-8b49-41ed-9afe-3aa415650d23 Wed, 16 Feb 2022 08:00:00 +1100 1186 investopoly,wemyss,rules of the lending game,prosolution,property investing,property demand,property prices,property supply,invest in property,brisbane property,investment grade,property market crash,property crash 1 197 false How to invest in Commercial Property: Part 2 How to invest in Commercial Property: Part 2 This is the second part of a two-part blog about investing in commercial property (you can read part one here). Now that you have a broad understanding of commercial property attributes, the next topic to discuss is how you can successfully invest in commercial property.

Why type of commercial property do I recommend?
Personally, at the moment I invest in commercial offices, and recommend the same to my advisory clients.

Not retail property
I do not invest in retail property because the profit margins in the retail sector have been under increasing pressure and landlords are not immune to the impact of these pressures. Rental yields are already relatively low in the retail sector, and they could be compressed further, which will adversely affect asset values. Overall, I don’t find this sector attractive.

Not industrial property
Whilst the high rental yields that industrial property offers is certainly very attractive, there are two downsides. Firstly, industrial properties tend to have a single tenant (i.e. no tenant diversification) which could lead to protected periods of vacancy (3-6 months is not uncommon). Secondly, these assets tend to provide very little (no) scope for improvement.

I prefer offices for these reasons
I am more attracted to office buildings because it offers tenant diversification i.e. an office building might have 20-40 tenants, so the likelihood of a materially lower income due to vacancy is lower. In addition, office buildings can provide scope to add value to the asset. There are two primary ways to do this.

Firstly, you can ensure the building offers the same amenities that newly built towers do. That can include a refurbished foyer/atrium (so its attractive for staff and clients to visit), end-of-trip facilities (such as showers, bike racks and so on), offices that are already fit out and ready to be occupied, etc. These capital improvements are all aimed at achieving a higher rent per sqm.

Secondly, you can improve the landlord’s relationship with the tenants. Ensuring tenants are well looked after and satisfied with the building is critical in reducing tenant turnover/vacancy and maximising rent. Weighted Average Lease Expiry (WALE) is a key metric that is used with office buildings to measure the strength of the property’s income stream. Increasing the WALE, reduces the capitalisation rate, which increases a buildings value.

Investment option: Direct ownership
One option is to purchase a commercial property to own directly i.e. you own 100% of the building, just like you would do with residential property. Of course, one downside with this option is that if you have a limited budget, you may need to compromise on the quality which is never a good idea.

Whilst it is highly dependent on the type and location of the property, I suggest that you need a budget of at least $2 million to invest in a satisfactory commercial property.

One of the advantages of hav

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> This is the second part of a two-part blog about investing in commercial property (you can read part one here). Now that you have a broad understanding of commercial property attributes, the next topic to discuss is how you can successfully invest in commercial property.

Why type of commercial property do I recommend?
Personally, at the moment I invest in commercial offices, and recommend the same to my advisory clients.

Not retail property
I do not invest in retail property because the profit margins in the retail sector have been under increasing pressure and landlords are not immune to the impact of these pressures. Rental yields are already relatively low in the retail sector, and they could be compressed further, which will adversely affect asset values. Overall, I don’t find this sector attractive.

Not industrial property
Whilst the high rental yields that industrial property offers is certainly very attractive, there are two downsides. Firstly, industrial properties tend to have a single tenant (i.e. no tenant diversification) which could lead to protected periods of vacancy (3-6 months is not uncommon). Secondly, these assets tend to provide very little (no) scope for improvement.

I prefer offices for these reasons
I am more attracted to office buildings because it offers tenant diversification i.e. an office building might have 20-40 tenants, so the likelihood of a materially lower income due to vacancy is lower. In addition, office buildings can provide scope to add value to the asset. There are two primary ways to do this.

Firstly, you can ensure the building offers the same amenities that newly built towers do. That can include a refurbished foyer/atrium (so its attractive for staff and clients to visit), end-of-trip facilities (such as showers, bike racks and so on), offices that are already fit out and ready to be occupied, etc. These capital improvements are all aimed at achieving a higher rent per sqm.

Secondly, you can improve the landlord’s relationship with the tenants. Ensuring tenants are well looked after and satisfied with the building is critical in reducing tenant turnover/vacancy and maximising rent. Weighted Average Lease Expiry (WALE) is a key metric that is used with office buildings to measure the strength of the property’s income stream. Increasing the WALE, reduces the capitalisation rate, which increases a buildings value.

Investment option: Direct ownership
One option is to purchase a commercial property to own directly i.e. you own 100% of the building, just like you would do with residential property. Of course, one downside with this option is that if you have a limited budget, you may need to compromise on the quality which is never a good idea.

Whilst it is highly dependent on the type and location of the property, I suggest that you need a budget of at least $2 million to invest in a satisfactory commercial property.

One of the advantages of hav

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 315ac5e9-b7d7-492b-aa53-9a66afad6562 Wed, 09 Feb 2022 10:00:00 +1100 1271 investopoly,wemyss,prosolution,rules of the lending game,commercial,commercial property investing,investing in commercial property 1 196 false Investing in Commercial Property: Part 1 Investing in Commercial Property: Part 1 I believe that most people would be well-served by investing in various asset classes, including shares and property. I do not believe that any one asset class is superior. They all have their pros and cons which you can balance out in a diversified investment portfolio, which could include commercial property.

Commercial property does have some wonderfully attractive attributes but it’s important to introduce it into your portfolio at the right time (stage of life) and of course, invest in the right asset using the right methodology.

I will explain this in a two-part blog. This first part will provide an introduction to commercial property. The second part will consider how to successfully invest in this asset class.

Attraction to commercial property
Most investors are very familiar with residential property as an investment option. As I have highlighted in this blog many times, residential property is a growth asset because it provides most of its total return in the form of capital growth and proportionately very little income.

One of the main attractions to commercial property is that it typically provides a higher level of income, which may be particularly attractive if you are close to retirement, or you already own a few residential investment properties.

Types of commercial property
Commercial properties can have a varying array of attributes and no two properties are likely to be identical. That said, there are three broad categories of commercial property:
§ Office: An office building is usually a multi-level building that has multiple tenants. These buildings are typically situated in central, well-established locations (CBD or suburban hubs), which adds to their scarcity and tends to drive capital growth.
§ Retail: this includes retail shops in suburban shopping strips, mixed-use premises, and specialised properties such as service stations and restaurants. Because these assets are typically located in high-demand locations, they tend to generate lower rental yields.
§ Industrial: this includes industrial sheds, bulky goods centres (bunnings) and the so on. These assets tend to be located in outer, fringe locations and as such may offer higher rental yields.

How does commercial differ from residential?
Given most people have an understanding of residential property attributes, I thought the best way to introduce commercial property is through making a comparison with residential property.

Rental yield
With regard to rental income, there are two main differences between commercial and residential property.

Firstly, a commercial tenant pays for most of a property’s expenses including rates, insurances, maintenance and so forth. The only exception to this may be land tax. In Victoria, if the lease is covered by the Retail Leases Act 2003, the landlord cannot on-charge the cost of land tax to the tenant. However, as property is regulated by the states, rules may vary from state to state. Suffice to say that given a commercial tenant pays for almost all expenses, it means these investments tend to generate a lot more income than residential properties.

Secondly, rental yields tend to be higher than residential, especially for office and industrial properties. Office rental yields tend to range from 4% to 6% p.a. Industrial rental yields can range from 4% to 9% p.a. This compares favourably to residential houses which typically yield circa 2% p.a. gross (in Melbourne and Sydney), which might be reduced to just over 1% p.a. after all expenses (of course, well-located residential houses more than make up for this with capital growth).

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> I believe that most people would be well-served by investing in various asset classes, including shares and property. I do not believe that any one asset class is superior. They all have their pros and cons which you can balance out in a diversified investment portfolio, which could include commercial property.

Commercial property does have some wonderfully attractive attributes but it’s important to introduce it into your portfolio at the right time (stage of life) and of course, invest in the right asset using the right methodology.

I will explain this in a two-part blog. This first part will provide an introduction to commercial property. The second part will consider how to successfully invest in this asset class.

Attraction to commercial property
Most investors are very familiar with residential property as an investment option. As I have highlighted in this blog many times, residential property is a growth asset because it provides most of its total return in the form of capital growth and proportionately very little income.

One of the main attractions to commercial property is that it typically provides a higher level of income, which may be particularly attractive if you are close to retirement, or you already own a few residential investment properties.

Types of commercial property
Commercial properties can have a varying array of attributes and no two properties are likely to be identical. That said, there are three broad categories of commercial property:
§ Office: An office building is usually a multi-level building that has multiple tenants. These buildings are typically situated in central, well-established locations (CBD or suburban hubs), which adds to their scarcity and tends to drive capital growth.
§ Retail: this includes retail shops in suburban shopping strips, mixed-use premises, and specialised properties such as service stations and restaurants. Because these assets are typically located in high-demand locations, they tend to generate lower rental yields.
§ Industrial: this includes industrial sheds, bulky goods centres (bunnings) and the so on. These assets tend to be located in outer, fringe locations and as such may offer higher rental yields.

How does commercial differ from residential?
Given most people have an understanding of residential property attributes, I thought the best way to introduce commercial property is through making a comparison with residential property.

Rental yield
With regard to rental income, there are two main differences between commercial and residential property.

Firstly, a commercial tenant pays for most of a property’s expenses including rates, insurances, maintenance and so forth. The only exception to this may be land tax. In Victoria, if the lease is covered by the Retail Leases Act 2003, the landlord cannot on-charge the cost of land tax to the tenant. However, as property is regulated by the states, rules may vary from state to state. Suffice to say that given a commercial tenant pays for almost all expenses, it means these investments tend to generate a lot more income than residential properties.

Secondly, rental yields tend to be higher than residential, especially for office and industrial properties. Office rental yields tend to range from 4% to 6% p.a. Industrial rental yields can range from 4% to 9% p.a. This compares favourably to residential houses which typically yield circa 2% p.a. gross (in Melbourne and Sydney), which might be reduced to just over 1% p.a. after all expenses (of course, well-located residential houses more than make up for this with capital growth).

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 5818ea82-1c57-46e2-87ea-89686f171a15 Wed, 02 Feb 2022 10:00:00 +1100 1208 investopoly,wemyss,prosolution,rules of the lending game,commercial,commercial property investing,investing in commercial property 1 195 false 2022 Market predictions and Planning: Part 2 2022 Market predictions and Planning: Part 2 Last week, I shared what risks and opportunities investment markets could offer us during 2022. These market expectations helped my wife and I set our personal, relationship, business and financial goals for 2022.

It is stating the obvious to so say that goal setting is important. I believe that if you aim at nothing, often that is exactly what you will achieve; nothing! Goal setting gives you more control over where your life is heading. Drive the bus. Don’t merely be a passenger on it.

Part 2: Goal setting process
This blog sets out the goal setting process that my wife and I followed this year. However, I must say that I don’t think there is a right or wrong goal setting approach. It’s simply about finding the approach and process that suits you. Hopefully this blog gives you some ideas and a broad framework.

Some tips I have learnt over the years
I have two tips that I would like to share with you to help you set goals.

Firstly, make sure your goal is specific, realistic and measurable. For example, a goal of “get fit” or “lose weight” is useless because it’s too vague. You must be specific, so that you can measure your progress.

Secondly, don’t be afraid to set a low bar, especially if this is the first time you have set this goal, or you have failed to achieve it in the past. Remember, some progress is better than none at all and you can always increase the goal/target during the year. For example, you might be super motivated to get into shape this year and be tempted to set a goal of exercising 6 days per week. The problem is that for most people, this will be too hard to stick to for the whole year. And the reality is that if you exercised 3 times per week for say 42 out of 52 weeks, it would go a very long way to helping you achieve your end goal. Also, don’t set too many goals. Unrealistic goals are very demotivating.

For example, to illustrate these two tips above, my health goals read like this; (1) exercise for 40 minutes at least 3 times per week – I track this (and other goals) using an app called Easy Habits, (2) never eat after 8:30pm and (3) I can eat whatever I want one day per week (i.e. one cheat day).

Remember, when it comes to completing goals, consistency way more important than effort. Just 1% of improvement/effort every day for a year will result a 37x improvement.

Step 1: Review last years goals
This first thing we do is review last years goals. There are two reasons for this.

Firstly, it is important to identify any goals that you haven’t achieved and decide whether to include them on this year’s list.

Secondly, it’s wise to consider why you haven’t achieved any goal. If it was circumstances beyond your control, then it’s probably appropriate to include the goal again this year. However, if there are other reasons, then perhaps you can improve your implementation such as creating some form of accountability. Or perhaps it’s just a case that the goal isn’t that important to you, which is fine of course, but means maybe it shouldn’t have been a goal in the first place.

Step 2: Forecast this year’s cash flow
Many goals are dependent upon cash flow e.g. holidays, home improvements and virtually all financial goals. Therefor

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Last week, I shared what risks and opportunities investment markets could offer us during 2022. These market expectations helped my wife and I set our personal, relationship, business and financial goals for 2022.

It is stating the obvious to so say that goal setting is important. I believe that if you aim at nothing, often that is exactly what you will achieve; nothing! Goal setting gives you more control over where your life is heading. Drive the bus. Don’t merely be a passenger on it.

Part 2: Goal setting process
This blog sets out the goal setting process that my wife and I followed this year. However, I must say that I don’t think there is a right or wrong goal setting approach. It’s simply about finding the approach and process that suits you. Hopefully this blog gives you some ideas and a broad framework.

Some tips I have learnt over the years
I have two tips that I would like to share with you to help you set goals.

Firstly, make sure your goal is specific, realistic and measurable. For example, a goal of “get fit” or “lose weight” is useless because it’s too vague. You must be specific, so that you can measure your progress.

Secondly, don’t be afraid to set a low bar, especially if this is the first time you have set this goal, or you have failed to achieve it in the past. Remember, some progress is better than none at all and you can always increase the goal/target during the year. For example, you might be super motivated to get into shape this year and be tempted to set a goal of exercising 6 days per week. The problem is that for most people, this will be too hard to stick to for the whole year. And the reality is that if you exercised 3 times per week for say 42 out of 52 weeks, it would go a very long way to helping you achieve your end goal. Also, don’t set too many goals. Unrealistic goals are very demotivating.

For example, to illustrate these two tips above, my health goals read like this; (1) exercise for 40 minutes at least 3 times per week – I track this (and other goals) using an app called Easy Habits, (2) never eat after 8:30pm and (3) I can eat whatever I want one day per week (i.e. one cheat day).

Remember, when it comes to completing goals, consistency way more important than effort. Just 1% of improvement/effort every day for a year will result a 37x improvement.

Step 1: Review last years goals
This first thing we do is review last years goals. There are two reasons for this.

Firstly, it is important to identify any goals that you haven’t achieved and decide whether to include them on this year’s list.

Secondly, it’s wise to consider why you haven’t achieved any goal. If it was circumstances beyond your control, then it’s probably appropriate to include the goal again this year. However, if there are other reasons, then perhaps you can improve your implementation such as creating some form of accountability. Or perhaps it’s just a case that the goal isn’t that important to you, which is fine of course, but means maybe it shouldn’t have been a goal in the first place.

Step 2: Forecast this year’s cash flow
Many goals are dependent upon cash flow e.g. holidays, home improvements and virtually all financial goals. Therefor

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss b2cd0717-6a4a-4987-8905-c081241e491b Tue, 25 Jan 2022 09:40:00 +1100 1130 investopoly,wemyss,rules of the lending game,prosolution,shares,share market,index funds,property crash,micro bubble,share market crash,Melbourne property,goals,goal setting,2022 goals, 1 194 false 2022 Predictions and Planning: Part 1 2022 Predictions and Planning: Part 1 It is stating the obvious to say that goal setting is important. The fact is, if you aim at nothing, often that is exactly what you will achieve; nothing!

Each year my wife and I set personal, relationship, business and financial goals. We almost always achieve all the goals we set for ourselves each year. I want to share the process which we’ve just completed and share what I think 2022 might bring us investment-opportunity-wise, as this will help you set realistic goals.

Part 1: Investment risks and opportunities that 2022 might bring
On one hand, you should never let markets dictate your investment strategy or decisions. Market sentiment almost always reflected short-term fears and greed – neither of which are any use when making long-term financial decisions. However, understanding markets is helpful in prioritising which goals are most important to implement in the next 12 months.

For example, if you plan to invest in shares and property, but feel shares are wildly over-valued, then you could conclude to invest in property in 2022 and reconsider shares in 2023.

Therefore, I think it is useful to consider what opportunities and risks markets might present during 2022.

Australian property market in 2022
The challenge with forming a view on the property market is that the past 12 months has been influenced by very slow supply i.e. fewer investment grade houses for sale. As such, some buyers have been driven by FOMO and been prepared to overpay for property just to “get into the market”.

Listings in Brisbane are about one third below their usual volume and stock levels in Melbourne and Sydney are also lower, although certainly not to the same extent as Brisbane. Listing numbers in regional locations, particularly beach-side locations, are also chronically low.

If supply remains tight i.e. there are fewer properties than there are buyers, property prices will continue to appreciate, albeit at a slower rate than in 2021. Supply will eventually increase because higher prices encourage more sellers to come to market. However, I don’t think that will happen until the Covid risk disappears. Of course, no one knows when that will happen!

Price becomes more important the further you move down the quality scale
For the sake of this example, let’s assume that Covid evaporates over the course of 2022 and that 2023 brings us a normalised property market i.e. supply returns to normal levels. It is very possible that we may see prices pull back by 5-10%. That’s because there is no longer any pressure to overpay to buy a property. For example, properties that were selling for $1.2-1.3m range may sell for $1.1-1.2m range, which may fairly represent their intrinsic value. If this happens, people that overpaid for property in 2021 might find themselves in a paper-loss position for a short period of time. In short, the consequence of overpaying could be that you accumulate very little equity in your property over the first few (2-4) years of ownership.

If you plan to buy a property (e.g. a home) in a non-investment-grade location, then it is increasingly important to not overpay for property. The further down the quality scale you move, the more the price/value assessment becomes. That’s because high-quality, investment-grade locations tend to benefit from strong price appreciation, and this strong growth quickly makes up for the financial impact of overpaying. However, in lower growth locations, the consequence of overpaying can sting for many years.

I must highlight that when buying an investment-grade property, the quality of the proper

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> It is stating the obvious to say that goal setting is important. The fact is, if you aim at nothing, often that is exactly what you will achieve; nothing!

Each year my wife and I set personal, relationship, business and financial goals. We almost always achieve all the goals we set for ourselves each year. I want to share the process which we’ve just completed and share what I think 2022 might bring us investment-opportunity-wise, as this will help you set realistic goals.

Part 1: Investment risks and opportunities that 2022 might bring
On one hand, you should never let markets dictate your investment strategy or decisions. Market sentiment almost always reflected short-term fears and greed – neither of which are any use when making long-term financial decisions. However, understanding markets is helpful in prioritising which goals are most important to implement in the next 12 months.

For example, if you plan to invest in shares and property, but feel shares are wildly over-valued, then you could conclude to invest in property in 2022 and reconsider shares in 2023.

Therefore, I think it is useful to consider what opportunities and risks markets might present during 2022.

Australian property market in 2022
The challenge with forming a view on the property market is that the past 12 months has been influenced by very slow supply i.e. fewer investment grade houses for sale. As such, some buyers have been driven by FOMO and been prepared to overpay for property just to “get into the market”.

Listings in Brisbane are about one third below their usual volume and stock levels in Melbourne and Sydney are also lower, although certainly not to the same extent as Brisbane. Listing numbers in regional locations, particularly beach-side locations, are also chronically low.

If supply remains tight i.e. there are fewer properties than there are buyers, property prices will continue to appreciate, albeit at a slower rate than in 2021. Supply will eventually increase because higher prices encourage more sellers to come to market. However, I don’t think that will happen until the Covid risk disappears. Of course, no one knows when that will happen!

Price becomes more important the further you move down the quality scale
For the sake of this example, let’s assume that Covid evaporates over the course of 2022 and that 2023 brings us a normalised property market i.e. supply returns to normal levels. It is very possible that we may see prices pull back by 5-10%. That’s because there is no longer any pressure to overpay to buy a property. For example, properties that were selling for $1.2-1.3m range may sell for $1.1-1.2m range, which may fairly represent their intrinsic value. If this happens, people that overpaid for property in 2021 might find themselves in a paper-loss position for a short period of time. In short, the consequence of overpaying could be that you accumulate very little equity in your property over the first few (2-4) years of ownership.

If you plan to buy a property (e.g. a home) in a non-investment-grade location, then it is increasingly important to not overpay for property. The further down the quality scale you move, the more the price/value assessment becomes. That’s because high-quality, investment-grade locations tend to benefit from strong price appreciation, and this strong growth quickly makes up for the financial impact of overpaying. However, in lower growth locations, the consequence of overpaying can sting for many years.

I must highlight that when buying an investment-grade property, the quality of the proper

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss d7de17f3-429e-4b1b-acf3-54580578e434 Wed, 19 Jan 2022 12:37:00 +1100 938 investopoly,wemyss,rules of the lending game,prosolution,shares,share market,index funds,share market crash,Rivian,Melbourne property 1 193 false 2021 in review - where should you have invested? 2021 in review - where should you have invested? For my final podcast for 2021, I thought it would be interesting to look back to see how various investment asset-classes performed. This is important for two reasons. Firstly, it is wise to benchmark your investment returns so that you can assess relative performance. Secondly, it serves as a salient reminder about the cost of delay and procrastination.
Short-term returns are unimportant
In isolation, short term returns are meaningless. That’s because your focus as an investor must be on maximising medium to long term investment returns. What can I invest in today that is likely to generate the highest returns over the next 5 to 10 years? That is the question you must ask yourself.
Therefore, it’s important to highlight at the beginning of this blog that you should not put too much importance on short-term (i.e. 1 year) investment returns. Resist the temptation to guess what asset class will perform best next year. Instead, ask yourself which asset class or investment will produce the highest returns over the next 5+ years i.e. between 2022 and 2027.
Share markets
It was a year of two halves in share markets this year. The first half benefited from strong price appreciation, particularly for value stocks. The second half was adversely impacted by a few things including the risk that higher inflation may not be transitory, interest rate hikes occurring sooner than expected, central banks tapering QE and more recently, the potential impact of the new Omnicom variant.
The table below sets out returns until the end of November 2021 for the main geographical markets.


Emerging markets predominantly include China, Taiwan, South Korea and India. They have been impacted by all the concerns listed above plus many Chinese-specific matters including diplomatic and trade-related tensions, Evergrande default (that occurred last week), tech industry crackdown and economic growth concerns.
This has conspired to make emerging markets the most attractively priced sub-asset class, behind the UK market, as illustrated in the table below.

Expected returns are calculated by Research Affiliates, LLC using various evidence-based valuation models. Total return is the aggregate of income + earnings growth + change in valuation multiples.


Bond markets
Australian bond investment returns this year are the worst since 1994. The Bloomberg AusBond Composite 0+ Yr Index lost 3.23% in the 12 months to the end of November 2021. Australian corporate bonds have performed slightly better losing circa 2% over the same period.
Global bonds have also produced negative returns over the past 12 months – the Bloomberg Global Treasury Scaled Index (hedged) lost circa 1.5%.
Bond values have been adversely impacted because the market has factored in the risk that interest rates may rise sooner than originally anticipated due to inflationary pressures. This is a lot more likely in the US than it is in Australia. Comparatively, it appears that the Australian bond market has overreacted to this risk.
I should highlight that bonds play an important role in a portfolio’s asset allocation because they are negatively correlated with shares. That means when shares rise in value, bonds tend to fall and vice versa. Given share marke

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> For my final podcast for 2021, I thought it would be interesting to look back to see how various investment asset-classes performed. This is important for two reasons. Firstly, it is wise to benchmark your investment returns so that you can assess relative performance. Secondly, it serves as a salient reminder about the cost of delay and procrastination.
Short-term returns are unimportant
In isolation, short term returns are meaningless. That’s because your focus as an investor must be on maximising medium to long term investment returns. What can I invest in today that is likely to generate the highest returns over the next 5 to 10 years? That is the question you must ask yourself.
Therefore, it’s important to highlight at the beginning of this blog that you should not put too much importance on short-term (i.e. 1 year) investment returns. Resist the temptation to guess what asset class will perform best next year. Instead, ask yourself which asset class or investment will produce the highest returns over the next 5+ years i.e. between 2022 and 2027.
Share markets
It was a year of two halves in share markets this year. The first half benefited from strong price appreciation, particularly for value stocks. The second half was adversely impacted by a few things including the risk that higher inflation may not be transitory, interest rate hikes occurring sooner than expected, central banks tapering QE and more recently, the potential impact of the new Omnicom variant.
The table below sets out returns until the end of November 2021 for the main geographical markets.


Emerging markets predominantly include China, Taiwan, South Korea and India. They have been impacted by all the concerns listed above plus many Chinese-specific matters including diplomatic and trade-related tensions, Evergrande default (that occurred last week), tech industry crackdown and economic growth concerns.
This has conspired to make emerging markets the most attractively priced sub-asset class, behind the UK market, as illustrated in the table below.

Expected returns are calculated by Research Affiliates, LLC using various evidence-based valuation models. Total return is the aggregate of income + earnings growth + change in valuation multiples.


Bond markets
Australian bond investment returns this year are the worst since 1994. The Bloomberg AusBond Composite 0+ Yr Index lost 3.23% in the 12 months to the end of November 2021. Australian corporate bonds have performed slightly better losing circa 2% over the same period.
Global bonds have also produced negative returns over the past 12 months – the Bloomberg Global Treasury Scaled Index (hedged) lost circa 1.5%.
Bond values have been adversely impacted because the market has factored in the risk that interest rates may rise sooner than originally anticipated due to inflationary pressures. This is a lot more likely in the US than it is in Australia. Comparatively, it appears that the Australian bond market has overreacted to this risk.
I should highlight that bonds play an important role in a portfolio’s asset allocation because they are negatively correlated with shares. That means when shares rise in value, bonds tend to fall and vice versa. Given share marke

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss cefd95e0-dbb6-445f-8909-5e457904168b Wed, 15 Dec 2021 08:00:00 +1100 1235 investopoly,wemyss,rules of the lending game,prosolution,shares,share market,index funds,property crash,micro bubble,share market crash,Melbourne property 1 192 false Everything you must know about Capital Gain Tax (CGT) Everything you must know about Capital Gain Tax (CGT) Paying Capital Gains Tax (CGT) isn’t necessarily a bad thing because it means that you have sold an asset and made a profit, which is better than a loss, of course. That said, I’m certain that most people would prefer to pay less tax, not more. Therefore, it’s important to understand the ins and outs of CGT.

Capital Gain Tax basics
The amount of tax you must pay on any capital gain is calculated using the below formula (for any asset purchase after 20 September 1985).


(A) Net sale proceeds – this includes the amount that you received less any direct selling costs such as advertising expenses, agent fees, legal fees, brokerage and so forth. If you have gifted the asset or sold it to a related party for less than market value, then your net sale proceeds are deemed to be equal to its market value.

(B) Cost Base – this includes the total cost of the asset, which is what you originally paid for it plus any related costs such as brokerage for shares, stamp duty and buyers’ agent fees for property, legal fees, professional fees and so forth. You may be able to include any holding costs and capital improvements in your cost base if you haven’t already claimed a tax deduction for them. The cost base will be reduced by any depreciation or amortisation claimed on the asset during the ownership period.

(C) 50% discount – if you have owned the asset for more than 12 months and you are a resident for Australian Tax purposes, you are entitled to reduce the net capital gain by 50%.

(D) Marginal Tax Rate – The final step is to multiple the discounted capital gain by your marginal tax rate. For example, if you earn between $120,000 and $180,000, your marginal tax rate is 39% (including 2% Medicare levy).

An example
Leo purchased a property in 2002 for $550,000. The total costs associated with the purchase was $33,000. Leo sold the property in December 2021 and received $2.1 million net of all selling costs. As such, the gross gain is $1,517,000. The discounted gain is $758,500. And as Leo earns over $180,000 p.a. from his job, the whole gain will be taxed at the highest marginal rate of 47%. Consequently, Leo will have to pay $356,495 of tax when he lodges his tax return after 1 July 2022.

What if you make a capital loss?
A capital loss occurs when your net sale proceeds are less than your cost base. Capital losses can be used to offset capital gains. However, capital losses cannot be used to offset other income (such as employment income). Instead, you may carry a capital loss forward to use it in future years if/when you make a capital gain.

Main residence exemption
You are permitted to claim a CGT exemption on your home if (1) you and/or your spouse live in it, (2) you have not used it to generate an income e.g. rented it out and (3) the land is 2 hectares (2,000 sqm) or less.

Your spouse and you can only nominate one main residence at any one time. Therefore, if you have two homes (e.g. a city residence and a beach-side property), only one of those properties can be deemed as your main residence.

Various rules apply for different situations such as your main residence being on multiple titles e.g. adjoining vacant land, you have multiple dwellings on the same title, or you subdivided your main residence. In these circumstances, it is very important to obtain professional advice from a holistic accountant.

Converting a main residence

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Paying Capital Gains Tax (CGT) isn’t necessarily a bad thing because it means that you have sold an asset and made a profit, which is better than a loss, of course. That said, I’m certain that most people would prefer to pay less tax, not more. Therefore, it’s important to understand the ins and outs of CGT.

Capital Gain Tax basics
The amount of tax you must pay on any capital gain is calculated using the below formula (for any asset purchase after 20 September 1985).


(A) Net sale proceeds – this includes the amount that you received less any direct selling costs such as advertising expenses, agent fees, legal fees, brokerage and so forth. If you have gifted the asset or sold it to a related party for less than market value, then your net sale proceeds are deemed to be equal to its market value.

(B) Cost Base – this includes the total cost of the asset, which is what you originally paid for it plus any related costs such as brokerage for shares, stamp duty and buyers’ agent fees for property, legal fees, professional fees and so forth. You may be able to include any holding costs and capital improvements in your cost base if you haven’t already claimed a tax deduction for them. The cost base will be reduced by any depreciation or amortisation claimed on the asset during the ownership period.

(C) 50% discount – if you have owned the asset for more than 12 months and you are a resident for Australian Tax purposes, you are entitled to reduce the net capital gain by 50%.

(D) Marginal Tax Rate – The final step is to multiple the discounted capital gain by your marginal tax rate. For example, if you earn between $120,000 and $180,000, your marginal tax rate is 39% (including 2% Medicare levy).

An example
Leo purchased a property in 2002 for $550,000. The total costs associated with the purchase was $33,000. Leo sold the property in December 2021 and received $2.1 million net of all selling costs. As such, the gross gain is $1,517,000. The discounted gain is $758,500. And as Leo earns over $180,000 p.a. from his job, the whole gain will be taxed at the highest marginal rate of 47%. Consequently, Leo will have to pay $356,495 of tax when he lodges his tax return after 1 July 2022.

What if you make a capital loss?
A capital loss occurs when your net sale proceeds are less than your cost base. Capital losses can be used to offset capital gains. However, capital losses cannot be used to offset other income (such as employment income). Instead, you may carry a capital loss forward to use it in future years if/when you make a capital gain.

Main residence exemption
You are permitted to claim a CGT exemption on your home if (1) you and/or your spouse live in it, (2) you have not used it to generate an income e.g. rented it out and (3) the land is 2 hectares (2,000 sqm) or less.

Your spouse and you can only nominate one main residence at any one time. Therefore, if you have two homes (e.g. a city residence and a beach-side property), only one of those properties can be deemed as your main residence.

Various rules apply for different situations such as your main residence being on multiple titles e.g. adjoining vacant land, you have multiple dwellings on the same title, or you subdivided your main residence. In these circumstances, it is very important to obtain professional advice from a holistic accountant.

Converting a main residence

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 216ac78d-60c7-41be-96cb-f483c193a62f Wed, 08 Dec 2021 08:00:00 +1100 1195 investopoly,wemyss,rules of the lending game,prosolution,property investing,property demand,property prices,invest in property,tax,land tax,CGT,capital gains tax,income tax,ownership structures 1 191 false The three most common mistakes made by investors The three most common mistakes made by investors After almost 20 years of interacting with investors (and potential investors) on a daily basis, I’ve noticed some common themes that prevent investors from achieving their potential. If you can avoid all three, you are almost guaranteed to achieve financial security.
Whilst some of these matters seem relatively simple, you should not let their simplicity fool you into thinking that they are anything less than critical.
Why do we tend to overcomplicate matters?
I believe that investing is simple. If you adopt a rules and evidence-based approach towards making investment decisions, it is virtually impossible to make a mistake. Successful investing is rooted in sound logic and basic math. There is nothing overly complex about it that cannot be explained in simple terms. That is why I wrote Investopoly – to outline 8 time-tested rules that if followed, would guarantee investors avoid making costly mistakes. I apologise if that sounds like a sales spiel. And I appreciate it sounds like a big promise. But I stand by it.
If investing is simple, why do people over-complicate it? Of course, the reason depends on the individual. However, I think there are probably two reasons.
Firstly, there is a lot at stake i.e. my family’s financial security, our dreams and goals. Given what’s at stake, people can have the tendency to over-think it due to fear of making a mistake.
Secondly, to many people, investing seems complex. Humans tend to think that complex problems require complex solutions. The truth is, simple solutions tend to be very effective, exhibit lower risk, lower cost, easy to implement and easy to understand.
Most mistakes are made by over-complicating financial decisions than over-simplifying them.
Investment mistake # 1: try to work it all out themselves
As a rule, I don’t perform my own dental work. I go to a dentist. When buying a property, I don’t do the conveyancing myself. I engage a professional and experienced lawyer. I don’t service my car… you get the point.
I rely on various professionals when (1) the consequences of making a mistake are unacceptable and (2) I don’t have enough knowledge and experience to give me a high level of confidence that I will not make any mistakes.
It has always puzzled me why someone would invest more than $1 million of borrowed money (e.g. buy an investment property) without getting any professional advice. Firstly, $1 million is a lot of money and the relative performance (e.g. 1% p.a. more) of the asset over 10+ years can make a huge difference in dollar terms (which I previously demonstrated here).
Secondly, you are investing money that’s not yours i.e. borrowed money. It’s not yours to lose. And it comes at a cost (interest rate) – and that cost is guaranteed – you must pay it regardless. Therefore, if you are on the hook for the cost of debt, you should take all possible steps to minimise the risk of under-performance. If you are not prepared to do that, then perhaps you shouldn’t be borrowing to invest.
Investment mistake # 2: to reduce risk, aim for a quick profit
For almost 20 years I have written ad nauseam that ‘playing the long game’ gives you the greatest chance of successfully building wealth. That is, make investment/financial decisions that are focused solely on maximising outcomes in 10+ years’ time. This allows you to drown out all the (media) noise and focus on sound fundamentals. Fundamentals, not noise (rhetoric), drive investment returns in the long run.
H

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> After almost 20 years of interacting with investors (and potential investors) on a daily basis, I’ve noticed some common themes that prevent investors from achieving their potential. If you can avoid all three, you are almost guaranteed to achieve financial security.
Whilst some of these matters seem relatively simple, you should not let their simplicity fool you into thinking that they are anything less than critical.
Why do we tend to overcomplicate matters?
I believe that investing is simple. If you adopt a rules and evidence-based approach towards making investment decisions, it is virtually impossible to make a mistake. Successful investing is rooted in sound logic and basic math. There is nothing overly complex about it that cannot be explained in simple terms. That is why I wrote Investopoly – to outline 8 time-tested rules that if followed, would guarantee investors avoid making costly mistakes. I apologise if that sounds like a sales spiel. And I appreciate it sounds like a big promise. But I stand by it.
If investing is simple, why do people over-complicate it? Of course, the reason depends on the individual. However, I think there are probably two reasons.
Firstly, there is a lot at stake i.e. my family’s financial security, our dreams and goals. Given what’s at stake, people can have the tendency to over-think it due to fear of making a mistake.
Secondly, to many people, investing seems complex. Humans tend to think that complex problems require complex solutions. The truth is, simple solutions tend to be very effective, exhibit lower risk, lower cost, easy to implement and easy to understand.
Most mistakes are made by over-complicating financial decisions than over-simplifying them.
Investment mistake # 1: try to work it all out themselves
As a rule, I don’t perform my own dental work. I go to a dentist. When buying a property, I don’t do the conveyancing myself. I engage a professional and experienced lawyer. I don’t service my car… you get the point.
I rely on various professionals when (1) the consequences of making a mistake are unacceptable and (2) I don’t have enough knowledge and experience to give me a high level of confidence that I will not make any mistakes.
It has always puzzled me why someone would invest more than $1 million of borrowed money (e.g. buy an investment property) without getting any professional advice. Firstly, $1 million is a lot of money and the relative performance (e.g. 1% p.a. more) of the asset over 10+ years can make a huge difference in dollar terms (which I previously demonstrated here).
Secondly, you are investing money that’s not yours i.e. borrowed money. It’s not yours to lose. And it comes at a cost (interest rate) – and that cost is guaranteed – you must pay it regardless. Therefore, if you are on the hook for the cost of debt, you should take all possible steps to minimise the risk of under-performance. If you are not prepared to do that, then perhaps you shouldn’t be borrowing to invest.
Investment mistake # 2: to reduce risk, aim for a quick profit
For almost 20 years I have written ad nauseam that ‘playing the long game’ gives you the greatest chance of successfully building wealth. That is, make investment/financial decisions that are focused solely on maximising outcomes in 10+ years’ time. This allows you to drown out all the (media) noise and focus on sound fundamentals. Fundamentals, not noise (rhetoric), drive investment returns in the long run.
H

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss a31a0b7c-252c-450b-acdd-1207149a4975 Wed, 01 Dec 2021 08:00:00 +1100 1031 investopoly,rules of the lending game,wemyss,financial advisor,financial planning,financial advice,choosing a financial advsior,financial advsier 1 190 false Are we in a bubble or micro-bubble? Are we in a bubble or micro-bubble? With property and share markets trading at all-time highs, it’s reasonable and perhaps prudent to consider whether we are in a (asset price) bubble. Bubbles cannot grow indefinitely and at some point, all bubbles burst.

Is the share market about to crash?
Share markets around the world have been incredibly resilient throughout the pandemic and almost all markets are trading above pre-pandemic levels. That probably shouldn’t come as a big surprise, as government fiscal support here and abroad has been unprecedented and interest rates couldn’t be much lower.

Rivian is a good example of a bubble
There are some very clear examples of bubble-like share market valuations. The recent listing of shares in Rivian Automotive Inc. in the US (NASDAQ) is a perfect example. It listed on 9 November raising $US12 billion from investors. Rivan is valued at $US110 billion making it the 5th most valuable automotive manufacturer in the world, behind Volkswagen, which sells 2.8 million units (cars) per year. It’s worth almost as much as Australia’s most valuable company, CBA.

Perhaps the most noteworthy thing about Rivian is that is hasn’t manufactured one product yet. That’s right! It hasn’t generated $1 of revenue, let alone a profit. It is true that Amazon has agreed to buy 100,000 electric delivery trucks from Rivian, which are to be on the road by 2030, but it effectively hasn’t manufactured one unit. There is no conceivable way on earth that a $US110+ billion valuation could be justified for this company. It’s insane.

But not all stocks in the US are overvalued
It is true that the large US tech companies have contributed substantially to the US stock market’s returns over the past 10 years. The FANMAG stocks now account for almost 24% of the S&P500 index. The total value of these six companies is almost $US8.5 trillion. Japan’s entire stock market is worth $US6 trillion. It is also noteworthy that Tesla’s market capitalisation (value) has added almost $US0.5 trillion to the S&P500 index since joining it in December 2020.

But some of these tech companies have been driven by sound fundamentals. Take Apple as an example. It took 38 years to reach a $US1 trillion market valuation in 2018. It only took 2 years to double its valuation to $US2 trillion (by mid-2020). It is currently worth more than $US2.6 trillion. A lot of this growth in value has been driven by underlying earnings (profit). Its trading on a PE ratio of 28 times which is not implausible. In fact, its relatively easy to justify.

It’s happening in Australia too
There are signs of bubbles in different companies in Australia too.

Cloud-based accounting software provider, Xero has a market capitalised value of $22 billion. It reported a loss of $6.5 million for the first half of the 2022 financial year. Whilst Xero likes to talk about the lifetime value of a customer, investors are (or should be) more interested in profitability, of which Xero has none.

But also, there are large Australian companies that are trading at attractive multiples. BHP, for example, is trading at a forward PE ratio of only 12 times, which is very low. That is mainly because its share price has fallen sharply over recent months in line with the price of iron ore.

Australian property price bubble?
According to Core Logic, the home value index has risen by 30% in Sydney over the 12 months to October 2021, 26% for Brisbane and almost 20% for Melbourne.

Whilst recent

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> With property and share markets trading at all-time highs, it’s reasonable and perhaps prudent to consider whether we are in a (asset price) bubble. Bubbles cannot grow indefinitely and at some point, all bubbles burst.

Is the share market about to crash?
Share markets around the world have been incredibly resilient throughout the pandemic and almost all markets are trading above pre-pandemic levels. That probably shouldn’t come as a big surprise, as government fiscal support here and abroad has been unprecedented and interest rates couldn’t be much lower.

Rivian is a good example of a bubble
There are some very clear examples of bubble-like share market valuations. The recent listing of shares in Rivian Automotive Inc. in the US (NASDAQ) is a perfect example. It listed on 9 November raising $US12 billion from investors. Rivan is valued at $US110 billion making it the 5th most valuable automotive manufacturer in the world, behind Volkswagen, which sells 2.8 million units (cars) per year. It’s worth almost as much as Australia’s most valuable company, CBA.

Perhaps the most noteworthy thing about Rivian is that is hasn’t manufactured one product yet. That’s right! It hasn’t generated $1 of revenue, let alone a profit. It is true that Amazon has agreed to buy 100,000 electric delivery trucks from Rivian, which are to be on the road by 2030, but it effectively hasn’t manufactured one unit. There is no conceivable way on earth that a $US110+ billion valuation could be justified for this company. It’s insane.

But not all stocks in the US are overvalued
It is true that the large US tech companies have contributed substantially to the US stock market’s returns over the past 10 years. The FANMAG stocks now account for almost 24% of the S&P500 index. The total value of these six companies is almost $US8.5 trillion. Japan’s entire stock market is worth $US6 trillion. It is also noteworthy that Tesla’s market capitalisation (value) has added almost $US0.5 trillion to the S&P500 index since joining it in December 2020.

But some of these tech companies have been driven by sound fundamentals. Take Apple as an example. It took 38 years to reach a $US1 trillion market valuation in 2018. It only took 2 years to double its valuation to $US2 trillion (by mid-2020). It is currently worth more than $US2.6 trillion. A lot of this growth in value has been driven by underlying earnings (profit). Its trading on a PE ratio of 28 times which is not implausible. In fact, its relatively easy to justify.

It’s happening in Australia too
There are signs of bubbles in different companies in Australia too.

Cloud-based accounting software provider, Xero has a market capitalised value of $22 billion. It reported a loss of $6.5 million for the first half of the 2022 financial year. Whilst Xero likes to talk about the lifetime value of a customer, investors are (or should be) more interested in profitability, of which Xero has none.

But also, there are large Australian companies that are trading at attractive multiples. BHP, for example, is trading at a forward PE ratio of only 12 times, which is very low. That is mainly because its share price has fallen sharply over recent months in line with the price of iron ore.

Australian property price bubble?
According to Core Logic, the home value index has risen by 30% in Sydney over the 12 months to October 2021, 26% for Brisbane and almost 20% for Melbourne.

Whilst recent

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 4dc755d2-e81d-4743-b239-c0a8cb95a295 Wed, 24 Nov 2021 08:00:00 +1100 1239 investopoly,wemyss,rules of the lending game,prosolution,shares,share market,index funds,property crash,bubble,micro bubble,share market crash,Tesla,Rivian,Melbourne property 1 189 false How to attract a great advisor How to attract a great advisor A financial advisor’s job is to develop a plan and help you implement that plan over many years, so that you achieve your financial and lifestyle goals. This includes navigating the inevitable changes in your circumstances, markets, investments and so forth – knowing when to stick to the plan and when to alter it.

Achieving your financial and lifestyle goals is an incredibly valuable outcome. Therefore, it is very likely that financial advisory fees will be a small fraction of that value.

Just like in any profession, the best people are typically in high demand. Of course, when selecting an advisor, you definitely want the best that you can afford.

Shrinking pool of financial advisors
According to research house, Rainmaker, approximately 30% (9,000) of financial advisors have left the industry since 2018. There are now less than 20,000 financial advisors in Australia.

There have been lots of legislative changes over this time that have prompted financial advisors to change careers or retire, including the banning of commissions, mandatory tertiary education standards(all financial advisors must pass a mandatory exam before 1 January 2022), increasing insurance costs and ever-increasing compliance obligations and so on.

The changes that have been implemented over the past few years have contributed towards lifting the bar (professionalism) for financial advisors. Of course, this is a good thing for the industry and its clients. But the result is that there is a growing shortage of financial advisors in Australia.

It’s the person, not that business that matters
A financial advisor and their client have a very personal relationship. This relationship is based on a high level of trust. Therefore, it is critical that clients find an advisor they feel comfortable with. Of course, there’s a personal/emotional element to this.

Second to trust is experience. Whilst it is possible to systemise some facets of the advice formulation process, what cannot be systemised or automated is experience. Experience is one of the most important and valuable benefits a financial advisor must share with you. Knowledge tells you what to do and experience tells you when and how to execute. The challenge is that experience isn’t scalable. There are no shortcuts to accumulating experience either.

An advisor that has been practising for 20 years is almost always going to be more valuable than an advisor with 2 years of experience.

Good advisors are rarer than good clients
There’s a limit to the number of clients that any one financial advisor can look after. Usually, that limit is in the range of 100 to 200 clients. But, of course, it depends on the complexity of each client.

It is very important for an advisor to choose their clients carefully. Of course there are some obvious commercial reasons for this, but I feel the most important consideration relates to the allocation of the scarcest resource; time. There’s a limited amount of time to share with a limited amount of clients, so it’s important that we share our time with clients that could benefit the most.

The only reason I come to work each day is the personal satisfaction I receive from helping my clients. Therefore, if I work with clients that truly need my help, I maximise this satisfaction. It might seem altruistic, but the truth is that it is a selfish pursuit. Thankfully, my client and my interests are perfectly aligned.

I

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> A financial advisor’s job is to develop a plan and help you implement that plan over many years, so that you achieve your financial and lifestyle goals. This includes navigating the inevitable changes in your circumstances, markets, investments and so forth – knowing when to stick to the plan and when to alter it.

Achieving your financial and lifestyle goals is an incredibly valuable outcome. Therefore, it is very likely that financial advisory fees will be a small fraction of that value.

Just like in any profession, the best people are typically in high demand. Of course, when selecting an advisor, you definitely want the best that you can afford.

Shrinking pool of financial advisors
According to research house, Rainmaker, approximately 30% (9,000) of financial advisors have left the industry since 2018. There are now less than 20,000 financial advisors in Australia.

There have been lots of legislative changes over this time that have prompted financial advisors to change careers or retire, including the banning of commissions, mandatory tertiary education standards(all financial advisors must pass a mandatory exam before 1 January 2022), increasing insurance costs and ever-increasing compliance obligations and so on.

The changes that have been implemented over the past few years have contributed towards lifting the bar (professionalism) for financial advisors. Of course, this is a good thing for the industry and its clients. But the result is that there is a growing shortage of financial advisors in Australia.

It’s the person, not that business that matters
A financial advisor and their client have a very personal relationship. This relationship is based on a high level of trust. Therefore, it is critical that clients find an advisor they feel comfortable with. Of course, there’s a personal/emotional element to this.

Second to trust is experience. Whilst it is possible to systemise some facets of the advice formulation process, what cannot be systemised or automated is experience. Experience is one of the most important and valuable benefits a financial advisor must share with you. Knowledge tells you what to do and experience tells you when and how to execute. The challenge is that experience isn’t scalable. There are no shortcuts to accumulating experience either.

An advisor that has been practising for 20 years is almost always going to be more valuable than an advisor with 2 years of experience.

Good advisors are rarer than good clients
There’s a limit to the number of clients that any one financial advisor can look after. Usually, that limit is in the range of 100 to 200 clients. But, of course, it depends on the complexity of each client.

It is very important for an advisor to choose their clients carefully. Of course there are some obvious commercial reasons for this, but I feel the most important consideration relates to the allocation of the scarcest resource; time. There’s a limited amount of time to share with a limited amount of clients, so it’s important that we share our time with clients that could benefit the most.

The only reason I come to work each day is the personal satisfaction I receive from helping my clients. Therefore, if I work with clients that truly need my help, I maximise this satisfaction. It might seem altruistic, but the truth is that it is a selfish pursuit. Thankfully, my client and my interests are perfectly aligned.

I

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss edde245a-70f5-407c-a977-2b9e61400439 Wed, 17 Nov 2021 08:00:00 +1100 1415 investopoly,rules of the lending game,wemyss,financial advisor,financial planning,financial advice,choosing a financial advsior,financial advsier 1 188 false How to invest in property for less than $1 million How to invest in property for less than $1 million It is becoming increasingly difficult to buy an investment-grade house for under $1 million in Brisbane, Melbourne and Sydney. This begs the question; if your investment property budget is less than $1 million, where and how do you invest it?

Brisbane is becoming more difficult
In early August 2021, I presented an investment case for buying an investment-grade home in Brisbane. My wife and I subsequently followed this advice (I put my money where my mouth is) and we purchased an investment-grade house in the Brisbane suburb of Indooroopilly, which settled last month.

Whilst I am still very bullish about the Brisbane market, it is becoming more challenging to buy an investment-grade house for less than $1 million. Whilst it is still possible, it may not remain that way for long.

House budgets must be substantially more than $1 million in Melbourne and Sydney
It will not come as a surprise that you need a budget of substantially more than $1 million to buy an investment-grade house in Melbourne and Sydney.

In Melbourne, you need more than $1.3 million and approaching $2 million and above in Sydney.

Of course, it is possible to find houses in these capital cities for less than $1 million, but these tend to be in non-investment-grade locations and/or have unacceptable compromises. That is, they are not deemed investment-grade assets.

Remember, there’s never a good reason to invest in a sub-standard quality asset. Your long-term investment returns will be directly related to the quality of your investment assets. You cannot expect good investment returns from an average (or below) quality asset.

A villa unit could be good option
Villa units are typically small houses that share the same block of land e.g. there might be 3 to 4 on the same block. They are often single-level homes that were constructed in the 1960’s or later. Typically, owners share some amenities, such as driveways, but mostly the owner has a direct interest in, and control of, their parcel of land.

Villa units are often prevalent in impaired locations such as busy main roads or secondary suburbs. However, it is possible to find some investment-grade villa units in blue-chip suburbs, but you must select judiciously. Villa units are scarce assets, particularly in blue-chip suburbs – property developers don’t build any more as they are not economical (higher density apartments are more economical).

It may be possible to buy an investment-grade villa unit in Melbourne for close to $1 million, but it is becoming more challenging. Villa units are not that common in Brisbane in established suburbs.

Investment-grade apartments in Melbourne
Arguably, the sub-$1-million property investment option that represents that best value is investment-grade apartments in Melbourne.

In October 2020, I wrote this report investigating the performance of investment grade apartments, particularly in Melbourne. I have taken the opportunity to update this report. This update can be found in Section 1 as an addendum. You can download a copy by clicking below.


There are three predominate reasons I believe investment-grade apartments in Melbourne represent excellent future growth prospects which I summarise below:

1. Apartments hav

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> It is becoming increasingly difficult to buy an investment-grade house for under $1 million in Brisbane, Melbourne and Sydney. This begs the question; if your investment property budget is less than $1 million, where and how do you invest it?

Brisbane is becoming more difficult
In early August 2021, I presented an investment case for buying an investment-grade home in Brisbane. My wife and I subsequently followed this advice (I put my money where my mouth is) and we purchased an investment-grade house in the Brisbane suburb of Indooroopilly, which settled last month.

Whilst I am still very bullish about the Brisbane market, it is becoming more challenging to buy an investment-grade house for less than $1 million. Whilst it is still possible, it may not remain that way for long.

House budgets must be substantially more than $1 million in Melbourne and Sydney
It will not come as a surprise that you need a budget of substantially more than $1 million to buy an investment-grade house in Melbourne and Sydney.

In Melbourne, you need more than $1.3 million and approaching $2 million and above in Sydney.

Of course, it is possible to find houses in these capital cities for less than $1 million, but these tend to be in non-investment-grade locations and/or have unacceptable compromises. That is, they are not deemed investment-grade assets.

Remember, there’s never a good reason to invest in a sub-standard quality asset. Your long-term investment returns will be directly related to the quality of your investment assets. You cannot expect good investment returns from an average (or below) quality asset.

A villa unit could be good option
Villa units are typically small houses that share the same block of land e.g. there might be 3 to 4 on the same block. They are often single-level homes that were constructed in the 1960’s or later. Typically, owners share some amenities, such as driveways, but mostly the owner has a direct interest in, and control of, their parcel of land.

Villa units are often prevalent in impaired locations such as busy main roads or secondary suburbs. However, it is possible to find some investment-grade villa units in blue-chip suburbs, but you must select judiciously. Villa units are scarce assets, particularly in blue-chip suburbs – property developers don’t build any more as they are not economical (higher density apartments are more economical).

It may be possible to buy an investment-grade villa unit in Melbourne for close to $1 million, but it is becoming more challenging. Villa units are not that common in Brisbane in established suburbs.

Investment-grade apartments in Melbourne
Arguably, the sub-$1-million property investment option that represents that best value is investment-grade apartments in Melbourne.

In October 2020, I wrote this report investigating the performance of investment grade apartments, particularly in Melbourne. I have taken the opportunity to update this report. This update can be found in Section 1 as an addendum. You can download a copy by clicking below.


There are three predominate reasons I believe investment-grade apartments in Melbourne represent excellent future growth prospects which I summarise below:

1. Apartments hav

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 67aef256-9a86-4499-9085-1f6ed986812d Wed, 10 Nov 2021 08:00:00 +1100 1251 investopoly,rules of the lending game,wemyss,property investing,investment grade apartments,property,investment property,Melbourne,Melbourne apartments 1 187 false Inflation and interest rates: where are they heading? Inflation and interest rates: where are they heading? The topic of rising inflation and its potential impact on interest rates has been dominating the financial press over the past few weeks. The bond markets expect that higher inflation readings will force central banks to raise interest rates.

It’s my opinion that higher inflation is likely to be temporary. And it’s also useful to remember that “markets” (and popular opinion) are not always right. Bond markets priced in higher inflation in February 2021 but eventually normalised after a few months.

A quick economics lesson: why does inflation lead to higher interest rates?
Inflation is a measure of rising costs. Inflation is measures by the ABS using a basket of goods and services. High inflation is bad for an economy because it erodes purchasing power, increases uncertainty and can have a negative impact the value of a country’s currency.

A key role of the RBA is to manage inflation so that it remains inside its targeted 2% to 3% band. It does that by changing the cash interest rate (currently 0.10%). Increasing interest rates, reduces spending (because the business and private sector must direct more money towards interest costs) and therefore reduces demand for goods and services which cools price increases.

Therefore, if markets expect that high inflation will persist, they price in that interest rates will increase, which negatively impacts the value of existing bonds, particularly if the coupon (interest rate) is fixed. This has been happening since August 2021 i.e. bond value have been falling.

What’s causing higher inflation?
As announced by the ABS last week, Australia’s inflation is 3% for the year ended September 2021, which is at the top end of the RBA’s target band. It was slightly less than expected (3.1%) and lower than last quarters annualised reading of 3.8%.

This time last year, inflation was less than 1%, so what has happened since then? The chart below sets out how prices have changes over the past year. Five categories have risen by more than 2% over the past year being transport, furnishings, health, alcohol and tobacco and recreation.


1. Transport – driven mainly by the rebound in the oil price. This time last year, oil was trading at around $40 per barrel, mainly because most of the world was in lockdown. Oil has since recovered and is currently trading at over $80 per barrel, which is closer to the long-term average price. Its unlikely the oil price will continue to rise, certainly not at the same pace.
2. Furnishings – the cost of furnishings have been driven by unusually high demand and supply shortages (supply chain disruptions).
3. Alcohol and tobacco – the main contributor were tobacco prices due to increase in government excise and customs duty in 2020.
4. Health – these price rises have been mainly driven by health insurance premiums.
5. Recreation and culture – price increases were mainly driven by domestic holiday travel and accommodation due to the closure of international borders.

It is likely that inflation is transitory
From a review of the above, it becomes clear that inflation has been driven by some unique events which are unlikely to persist. The only exception may be health insurance premiums, which seem to increase each year.

The Covid pandemic has caused several issues:
§ Supply chain disruption: The China Containerised Fr

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> The topic of rising inflation and its potential impact on interest rates has been dominating the financial press over the past few weeks. The bond markets expect that higher inflation readings will force central banks to raise interest rates.

It’s my opinion that higher inflation is likely to be temporary. And it’s also useful to remember that “markets” (and popular opinion) are not always right. Bond markets priced in higher inflation in February 2021 but eventually normalised after a few months.

A quick economics lesson: why does inflation lead to higher interest rates?
Inflation is a measure of rising costs. Inflation is measures by the ABS using a basket of goods and services. High inflation is bad for an economy because it erodes purchasing power, increases uncertainty and can have a negative impact the value of a country’s currency.

A key role of the RBA is to manage inflation so that it remains inside its targeted 2% to 3% band. It does that by changing the cash interest rate (currently 0.10%). Increasing interest rates, reduces spending (because the business and private sector must direct more money towards interest costs) and therefore reduces demand for goods and services which cools price increases.

Therefore, if markets expect that high inflation will persist, they price in that interest rates will increase, which negatively impacts the value of existing bonds, particularly if the coupon (interest rate) is fixed. This has been happening since August 2021 i.e. bond value have been falling.

What’s causing higher inflation?
As announced by the ABS last week, Australia’s inflation is 3% for the year ended September 2021, which is at the top end of the RBA’s target band. It was slightly less than expected (3.1%) and lower than last quarters annualised reading of 3.8%.

This time last year, inflation was less than 1%, so what has happened since then? The chart below sets out how prices have changes over the past year. Five categories have risen by more than 2% over the past year being transport, furnishings, health, alcohol and tobacco and recreation.


1. Transport – driven mainly by the rebound in the oil price. This time last year, oil was trading at around $40 per barrel, mainly because most of the world was in lockdown. Oil has since recovered and is currently trading at over $80 per barrel, which is closer to the long-term average price. Its unlikely the oil price will continue to rise, certainly not at the same pace.
2. Furnishings – the cost of furnishings have been driven by unusually high demand and supply shortages (supply chain disruptions).
3. Alcohol and tobacco – the main contributor were tobacco prices due to increase in government excise and customs duty in 2020.
4. Health – these price rises have been mainly driven by health insurance premiums.
5. Recreation and culture – price increases were mainly driven by domestic holiday travel and accommodation due to the closure of international borders.

It is likely that inflation is transitory
From a review of the above, it becomes clear that inflation has been driven by some unique events which are unlikely to persist. The only exception may be health insurance premiums, which seem to increase each year.

The Covid pandemic has caused several issues:
§ Supply chain disruption: The China Containerised Fr

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 92193b3c-e040-4693-8450-cb54df953cab Wed, 03 Nov 2021 08:00:00 +1100 1222 investopoly,wemyss,rules of the lending game,prosolution,property investing,property demand,property prices,property supply,invest in property,investment grade,property market crash,property crash,interest rates,inflation,interest rate rise, 1 186 false Will the property market ever crash? Will the property market ever crash? Will the property market ever crash?
I started ProSolution almost 20 years ago and if there’s been one common theme over that time, it is how “expensive” property is. This theme can be expressed in many ways such as predictions of property market crashes, housing affordability “crisis”, comparison of Australian property prices to other parts of the world and so forth. This noise is often unhelpful for property buyers.

The reality is that property has always seemed relatively expensive. And it’s probably never going to change. You must get used to it and learn to make prudent decisions despite the prevailing property price rhetoric.

I felt ill after almost ever property I’ve bought
In December 2006, I engaged Richard Wakelin to select and purchase an investment-grade property. He ended up buying a single-fronted Victorian cottage on a small block (146 sqm) in Prahran, Melbourne for $723,000. It was a record price for that street (the street is lined with similar Victorian cottages) and probably suburb. Paying a record price didn’t feel satisfying. In fact, it gave me indigestion. J But I trusted that buying an investment-grade asset that possessed sound fundamentals will work out well in the long run.

This property last sold in August 2019 for $1.362 million[1] (unfortunately, I had to dispose of it as part of my marriage separation in 2012). That makes the price in 2006 seems relatively cheap today.

Government policy supports property prices, and probably always will
The government’s policies have always supported property values. Of course, we can argue about the merits of this. And I think there’s a strong case to argue that the government shouldn’t interfere with the property market. But the reality is, they always have, and probably always will.

There are several examples of this including taxation incentives like negative gearing, Rudd governments doubling of the First Home Owners Boost in 2008 in the middle of the GFC, federal government asking the banks to provide loan repayment pauses last year and so forth. As soon as the property market has some challenges, the government always steps in.

There are two realities to acknowledge. Firstly, falling home values are bad for the whole economy. They impair consumer confidence and therefore consumer spending, and that deteriorates the whole economy.

Secondly, the big four banks have a vested interest in a healthy property market, and it is not difficult to imagine that they have substantial lobbying power in Canberra.

Again, I’m not suggesting that these vested interests are healthy, just merely pointing out that they exist, and history is evidence of that. Their existence means that the government is likely to intervene to avoid a property price crash.

Could property prices ever crash?
For property prices to crash, there needs to be widespread selling i.e. more sellers than buyers. Practically, this can only happen if the property market is in oversupply i.e. there are more houses than people to occupy them. This is what happened in the US in 2008. In some locations in the US, the housing market was in over-supply (i.e. there were empty houses) which led to large price falls. Therefore, if the Australian market remains in a supply/demand equilibrium, a property market crash remains very unlikely, because we all need somewhere to live.

The chart below illustrates the median house price in Sydney, Melbourne and Brisbane since 1980. It shows that negative returns should be expected every 5 years in Sydney, approximately every 7 years in Melbourne and less than every 10 ye

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Will the property market ever crash?
I started ProSolution almost 20 years ago and if there’s been one common theme over that time, it is how “expensive” property is. This theme can be expressed in many ways such as predictions of property market crashes, housing affordability “crisis”, comparison of Australian property prices to other parts of the world and so forth. This noise is often unhelpful for property buyers.

The reality is that property has always seemed relatively expensive. And it’s probably never going to change. You must get used to it and learn to make prudent decisions despite the prevailing property price rhetoric.

I felt ill after almost ever property I’ve bought
In December 2006, I engaged Richard Wakelin to select and purchase an investment-grade property. He ended up buying a single-fronted Victorian cottage on a small block (146 sqm) in Prahran, Melbourne for $723,000. It was a record price for that street (the street is lined with similar Victorian cottages) and probably suburb. Paying a record price didn’t feel satisfying. In fact, it gave me indigestion. J But I trusted that buying an investment-grade asset that possessed sound fundamentals will work out well in the long run.

This property last sold in August 2019 for $1.362 million[1] (unfortunately, I had to dispose of it as part of my marriage separation in 2012). That makes the price in 2006 seems relatively cheap today.

Government policy supports property prices, and probably always will
The government’s policies have always supported property values. Of course, we can argue about the merits of this. And I think there’s a strong case to argue that the government shouldn’t interfere with the property market. But the reality is, they always have, and probably always will.

There are several examples of this including taxation incentives like negative gearing, Rudd governments doubling of the First Home Owners Boost in 2008 in the middle of the GFC, federal government asking the banks to provide loan repayment pauses last year and so forth. As soon as the property market has some challenges, the government always steps in.

There are two realities to acknowledge. Firstly, falling home values are bad for the whole economy. They impair consumer confidence and therefore consumer spending, and that deteriorates the whole economy.

Secondly, the big four banks have a vested interest in a healthy property market, and it is not difficult to imagine that they have substantial lobbying power in Canberra.

Again, I’m not suggesting that these vested interests are healthy, just merely pointing out that they exist, and history is evidence of that. Their existence means that the government is likely to intervene to avoid a property price crash.

Could property prices ever crash?
For property prices to crash, there needs to be widespread selling i.e. more sellers than buyers. Practically, this can only happen if the property market is in oversupply i.e. there are more houses than people to occupy them. This is what happened in the US in 2008. In some locations in the US, the housing market was in over-supply (i.e. there were empty houses) which led to large price falls. Therefore, if the Australian market remains in a supply/demand equilibrium, a property market crash remains very unlikely, because we all need somewhere to live.

The chart below illustrates the median house price in Sydney, Melbourne and Brisbane since 1980. It shows that negative returns should be expected every 5 years in Sydney, approximately every 7 years in Melbourne and less than every 10 ye

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 766c7105-0860-4607-a7d4-febb42182a61 Wed, 27 Oct 2021 08:00:00 +1100 1180 investopoly,wemyss,rules of the lending game,prosolution,property investing,property demand,property prices,property supply,invest in property,brisbane property,investment grade,property market crash,property crash 1 185 false How do the big changes to income protection insurances affect you? How do the big changes to income protection insurances affect you? I wrote a blog in February 2020 highlighting the first phase of government mandated changes to income protection insurance products. The second phase of changes were implemented at the beginning of this month, and they are very significant. This blog discusses these important changes and how they may affect you.

Background
In December 2019, the insurance industry’s regulator (APRA), released a report outlining a number of compulsory changes that it mandated for income protection insurance products. Income protection insurance pays you a benefit if you cannot work due to accident or illness (it does not protect you from involuntary unemployment).

These changes were deemed necessary because insurance companies were losing literally billions of dollars on these products i.e. cost of paying benefits far exceeded premium revenue. However, no insurer wanted to make the first move to stem the losses. Fearing that insurance companies may eventually exit the Australian market (if no action was taken), the regulator stepped in and mandated changes to make products more sustainable.

There were two main issues that caused these products to be so unprofitable:
1. An inability for insurance companies to change terms to accommodate new risks. Mental health is a good example. Mental health claims were immaterial when policy terms were written 20 years ago. However, today, claims due to mental health are more substantial.
2. Long term benefits are very costly. If a 30-year-old claims on a policy and is never able to return to work, the insurer could be paying a benefit for the next 35 years. That is very costly. Therefore, it is important that policies only provide for genuine claims. Unfortunately, for the insurers, some policy terms are so generous that they sometimes act as a disincentive to cease being on-claim. This exacerbates losses.

Summary of the changes made this month
All insurers launched new product suites at the beginning of this month (existing products are no longer available). These new products reflected four important changes:
1. The amount of income that can be insured has reduced from 75% to 70% of your gross income. Replacing less of your pre-disability income gives you a greater incentive to return to employment as soon as possible.
2. The total benefit paid within the first 6 months of claim cannot exceed 90% of your pre-disability income. Many pre-October 2021 products offered ancillary benefits such as lump sum payments for specified conditions and rehabilitation benefits.
3. Pre-disability income is based on your actual personal exertion income received the 12 months prior to becoming incapacitated. Many older products used to allow you to select the highest 12-month period over the past 2 to 3 years (prior to incapacity).
4. Typically, you may be able to claim an income protection benefit if you are unable to perform the duties required in your ‘own occupation’ i.e. the occupation/role in which you are employed. However, the new products typically loosen the definition for any claims that last more than 2 years. In this case, the occupational definition is reduced to ‘any suited occupation’. The insurer will determine what is a suited occupation based on your skills, training, qualifications and experience. Some policies will pay a reduced benefit amount after 2 years if the insurer person is not “seriously disabled”.

An additional change expected
At the moment, many insurance contracts are non-cancellable which means as long as you keep paying the i

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> I wrote a blog in February 2020 highlighting the first phase of government mandated changes to income protection insurance products. The second phase of changes were implemented at the beginning of this month, and they are very significant. This blog discusses these important changes and how they may affect you.

Background
In December 2019, the insurance industry’s regulator (APRA), released a report outlining a number of compulsory changes that it mandated for income protection insurance products. Income protection insurance pays you a benefit if you cannot work due to accident or illness (it does not protect you from involuntary unemployment).

These changes were deemed necessary because insurance companies were losing literally billions of dollars on these products i.e. cost of paying benefits far exceeded premium revenue. However, no insurer wanted to make the first move to stem the losses. Fearing that insurance companies may eventually exit the Australian market (if no action was taken), the regulator stepped in and mandated changes to make products more sustainable.

There were two main issues that caused these products to be so unprofitable:
1. An inability for insurance companies to change terms to accommodate new risks. Mental health is a good example. Mental health claims were immaterial when policy terms were written 20 years ago. However, today, claims due to mental health are more substantial.
2. Long term benefits are very costly. If a 30-year-old claims on a policy and is never able to return to work, the insurer could be paying a benefit for the next 35 years. That is very costly. Therefore, it is important that policies only provide for genuine claims. Unfortunately, for the insurers, some policy terms are so generous that they sometimes act as a disincentive to cease being on-claim. This exacerbates losses.

Summary of the changes made this month
All insurers launched new product suites at the beginning of this month (existing products are no longer available). These new products reflected four important changes:
1. The amount of income that can be insured has reduced from 75% to 70% of your gross income. Replacing less of your pre-disability income gives you a greater incentive to return to employment as soon as possible.
2. The total benefit paid within the first 6 months of claim cannot exceed 90% of your pre-disability income. Many pre-October 2021 products offered ancillary benefits such as lump sum payments for specified conditions and rehabilitation benefits.
3. Pre-disability income is based on your actual personal exertion income received the 12 months prior to becoming incapacitated. Many older products used to allow you to select the highest 12-month period over the past 2 to 3 years (prior to incapacity).
4. Typically, you may be able to claim an income protection benefit if you are unable to perform the duties required in your ‘own occupation’ i.e. the occupation/role in which you are employed. However, the new products typically loosen the definition for any claims that last more than 2 years. In this case, the occupational definition is reduced to ‘any suited occupation’. The insurer will determine what is a suited occupation based on your skills, training, qualifications and experience. Some policies will pay a reduced benefit amount after 2 years if the insurer person is not “seriously disabled”.

An additional change expected
At the moment, many insurance contracts are non-cancellable which means as long as you keep paying the i

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 48cd17d1-cf06-4d25-9836-35990c9400ca Wed, 20 Oct 2021 08:00:00 +1100 1326 Investopoly,wemyss,income portection,financial advice,insurance,income protection insurance,trauma insurance,rules of the lending game,prosolution,prosolution private clients 1 184 false Freedom to choose the work you do for love, not money (how to plan) Freedom to choose the work you do for love, not money (how to plan) I have noticed that more people are attracted to seeking out work that they have a personal connection with, particularly since the beginning of Covid. That is, for a growing number of people, the emotional rewards (satisfaction) that their work offers is becoming more important than the financial rewards. This might include working in the not-for-profit sector, working for a socially conscious organisation or starting their own business.

Of course, not everyone has the flexibility to immediately resign from a high paying job. But of course, you can put a plan in place that allows you more freedom and flexibility in the future. I wanted to discuss the common considerations we tackle when working with clients in this regard.

Three phases of wealth accumulation
It is important to recognise that there are typically three phases associated with becoming financially free as illustrated below.


Phase one: Accumulation – this phase involves accumulating the required quantum of assets needed to fund retirement. That could include acquiring investment property(s), making additional contributions into super, investing surplus cash flow into shares and so on. This phase typically requires you to contribute as much cash flow as possible i.e. to maximise your earnings and minimise your expenses.

Phase two: Income flexibility – the main aim of this phase is to give your investment assets enough time to benefit from the power of compounding capital growth. This phase requires you to earn enough income to pay for living expenses and maintain your investment portfolio. That is, you may have flexibility to earn less during this phase either through changing roles or not working full-time.

Phase three: Retirement – it probably goes without saying that this phase doesn’t require you to generate any personal exertion income. All living expenses are funded from your investment/asset pool.

Therefore, if you would like to get yourself into a position where you have more choices regarding the type of work you do (i.e. less pressure to maximise your income), what you must do is focus on accelerating phase one.

This is a less aggressive version of FIRE
FIRE is an acronym that stands for a movement called Financial Independence, Retire Early. The idea behind FIRE is that you must minimise your expenses as much as possible to allow you to save and invest more, so that you can retire a lot earlier than a traditional approach allows.

The approach I have discussed above can probably be best described as a less aggressive version of FIRE. That is, my approach requires you to maximise your income and minimise expenses for a finite period (could be anywhere from 5 to 15 years). This allows you to reduce your personal exertion income for the next period (could be another 5 to 15 years) as long as it’s enough to cover your living expenses. By doing so, you delay the need to ‘eat into’, your financial resources. It allows your investments to benefit from compounding growth until you can start to draw on your superannuation (from age 60).

Maybe you don’t need to earn as much as you think
One of the advantages of formulating a plan is that it quantifies what income you need to generate and for how long in order to reach yo

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> I have noticed that more people are attracted to seeking out work that they have a personal connection with, particularly since the beginning of Covid. That is, for a growing number of people, the emotional rewards (satisfaction) that their work offers is becoming more important than the financial rewards. This might include working in the not-for-profit sector, working for a socially conscious organisation or starting their own business.

Of course, not everyone has the flexibility to immediately resign from a high paying job. But of course, you can put a plan in place that allows you more freedom and flexibility in the future. I wanted to discuss the common considerations we tackle when working with clients in this regard.

Three phases of wealth accumulation
It is important to recognise that there are typically three phases associated with becoming financially free as illustrated below.


Phase one: Accumulation – this phase involves accumulating the required quantum of assets needed to fund retirement. That could include acquiring investment property(s), making additional contributions into super, investing surplus cash flow into shares and so on. This phase typically requires you to contribute as much cash flow as possible i.e. to maximise your earnings and minimise your expenses.

Phase two: Income flexibility – the main aim of this phase is to give your investment assets enough time to benefit from the power of compounding capital growth. This phase requires you to earn enough income to pay for living expenses and maintain your investment portfolio. That is, you may have flexibility to earn less during this phase either through changing roles or not working full-time.

Phase three: Retirement – it probably goes without saying that this phase doesn’t require you to generate any personal exertion income. All living expenses are funded from your investment/asset pool.

Therefore, if you would like to get yourself into a position where you have more choices regarding the type of work you do (i.e. less pressure to maximise your income), what you must do is focus on accelerating phase one.

This is a less aggressive version of FIRE
FIRE is an acronym that stands for a movement called Financial Independence, Retire Early. The idea behind FIRE is that you must minimise your expenses as much as possible to allow you to save and invest more, so that you can retire a lot earlier than a traditional approach allows.

The approach I have discussed above can probably be best described as a less aggressive version of FIRE. That is, my approach requires you to maximise your income and minimise expenses for a finite period (could be anywhere from 5 to 15 years). This allows you to reduce your personal exertion income for the next period (could be another 5 to 15 years) as long as it’s enough to cover your living expenses. By doing so, you delay the need to ‘eat into’, your financial resources. It allows your investments to benefit from compounding growth until you can start to draw on your superannuation (from age 60).

Maybe you don’t need to earn as much as you think
One of the advantages of formulating a plan is that it quantifies what income you need to generate and for how long in order to reach yo

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss d00826f3-eda0-4bc3-9f05-757ea17623ec Wed, 13 Oct 2021 08:00:00 +1100 1140 investopoly,rules of the lending game,wemyss,financial advisor,financial planning,financial advice,choosing a financial advsior,financial advsier,retire early,semi-retire 1 183 false Likely tightening in lending rules is unlikely to impact investment-grade property Likely tightening in lending rules is unlikely to impact investment-grade property Federal Treasurer, Josh Frydenberg has asked the Council of Financial Regulators to investigate the fact that credit growth is materially outpacing growth in household income and to advise on any policy responses.

In lay terms, the Treasurer is worried that people are borrowing too much money compared to their incomes and that could be risky for the economy.

Increase in home lending is pronounced
It has been well documented that house prices in Australia have been rising at a fast pace over the past year. But this isn’t unique to Australia. This is also a global phenomenon, as illustrated in Knight Frank’s Global House Price Index report released last week. This report ranks the house price growth in 56 countries and Australia ranks 18th.

It is higher loan volumes that have caused higher property prices. The ABS chart below shows that most of the increase in lending has been driven by owner-occupiers (being the dark blue line), not investors.

CHART ON WEBSITE

The monthly volume of home loans has been rising significantly since mid-2020. The average volume of lending between December 2020 and August 2021 was $21.7 billion per month. The average for the 10-year period prior to June-2020, was only $11.6 billion per month.

Approximately 60% of the increase in lending over the past 9 months has been driven by an increase in the number of borrowers. And 40% has been driven by an increase in the average loan size i.e. people borrowing more. This makes sense as higher income earners have largely been (economically) unaffected by the Covid lockdowns.

Level of household debt is a worry
The chart below illustrates how the level of household debt (blue line) has increased over the past three decades. The green line depicts the interest cost of this debt. The interest cost has remained relatively contained for the past decade, thanks to falling interest rates.

CHART ON WEBSITE

Household budgets will clearly be more sensitive to future interest rate increases because they have more debt. This means that any future increases in the RBA Cash Rate will be more effective in containing inflation (by cooling consumer spending). As such, it is entirely possible, even likely that interest rates may never return to pre-GFC levels. That is, it’s possible that interest rates will permanently remain below 6% p.a.

The upshot of this is the government is rightly concerned about households’ higher indebtedness. This may be acceptable whilst interest rates are unusually low, but it could cause problems for some borrowers when interest rates inevitably rise.

Likely intervention: income to debt cap
The banking regulator considers a high debt-to-income ratio as anything above 6 i.e. borrowings greater than 6 times your family’s gross annual income. Therefore, if your family’s income is $200k p.a. and you have borrowings more than $1.2 million, the regulator considers you to be a riskier borrower.

The chart below (from
an APRA report) highlights that high debt-to-income lending (dark blue) has increased since last year. In fact, it grew by 2.8% in the June 2021 quarter which is the highest increase on record.

CHART ON WEBSITE

It is this

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Federal Treasurer, Josh Frydenberg has asked the Council of Financial Regulators to investigate the fact that credit growth is materially outpacing growth in household income and to advise on any policy responses.

In lay terms, the Treasurer is worried that people are borrowing too much money compared to their incomes and that could be risky for the economy.

Increase in home lending is pronounced
It has been well documented that house prices in Australia have been rising at a fast pace over the past year. But this isn’t unique to Australia. This is also a global phenomenon, as illustrated in Knight Frank’s Global House Price Index report released last week. This report ranks the house price growth in 56 countries and Australia ranks 18th.

It is higher loan volumes that have caused higher property prices. The ABS chart below shows that most of the increase in lending has been driven by owner-occupiers (being the dark blue line), not investors.

CHART ON WEBSITE

The monthly volume of home loans has been rising significantly since mid-2020. The average volume of lending between December 2020 and August 2021 was $21.7 billion per month. The average for the 10-year period prior to June-2020, was only $11.6 billion per month.

Approximately 60% of the increase in lending over the past 9 months has been driven by an increase in the number of borrowers. And 40% has been driven by an increase in the average loan size i.e. people borrowing more. This makes sense as higher income earners have largely been (economically) unaffected by the Covid lockdowns.

Level of household debt is a worry
The chart below illustrates how the level of household debt (blue line) has increased over the past three decades. The green line depicts the interest cost of this debt. The interest cost has remained relatively contained for the past decade, thanks to falling interest rates.

CHART ON WEBSITE

Household budgets will clearly be more sensitive to future interest rate increases because they have more debt. This means that any future increases in the RBA Cash Rate will be more effective in containing inflation (by cooling consumer spending). As such, it is entirely possible, even likely that interest rates may never return to pre-GFC levels. That is, it’s possible that interest rates will permanently remain below 6% p.a.

The upshot of this is the government is rightly concerned about households’ higher indebtedness. This may be acceptable whilst interest rates are unusually low, but it could cause problems for some borrowers when interest rates inevitably rise.

Likely intervention: income to debt cap
The banking regulator considers a high debt-to-income ratio as anything above 6 i.e. borrowings greater than 6 times your family’s gross annual income. Therefore, if your family’s income is $200k p.a. and you have borrowings more than $1.2 million, the regulator considers you to be a riskier borrower.

The chart below (from
an APRA report) highlights that high debt-to-income lending (dark blue) has increased since last year. In fact, it grew by 2.8% in the June 2021 quarter which is the highest increase on record.

CHART ON WEBSITE

It is this

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss d5e67d89-6371-468b-9d31-ccee85b20cde Wed, 06 Oct 2021 08:00:00 +1100 1138 investopoly,wemyss,rules of the lending game,prosolution,borrowing capacity,borrowing to invest,borrowings,responsible lending,debt to income,leverage, 1 182 false How much insurance is do you need? And how do you minimise its cost? How much insurance is do you need? And how do you minimise its cost? Personal insurance is becoming more difficult to obtain and increasingly costly to maintain. This blog outlines the approach we take when formulating how much insurance our clients need and strategies to manage its cost.

What is personal insurance?
This blog refers to personal insurance only. That typically includes up to four products:
§ Income protection insurance – which pays a monthly benefit if you are unable to work due to illness or injury;
§ Life – pays a lump sum benefit if you die;
§ TPD – stands for Total and Permanent Disability which pays a lump sum benefit if you are unable to ever return to work in the future, due to illness or injury; and
§ Trauma – pays a lump sum benefit if you are diagnosed with a ‘specified condition’ which, statistically, includes cancer and cardiovascular events. Even if your ability to be able to work is not impaired, you can still claim a benefit. Benefits are paid according to diagnoses, not symptoms.

Other common insurance products such as health, house and contents and car insurances are defined as ‘general insurance’ products. These are the domain of general insurance brokers, not financial advisors.

What determines how much insurance you need?
In most situations, the two key factors which dictate how much insurance you need are:
1. Financial commitments and obligations including mortgages, living expenses, children’s education, dependents and so on. The higher the levels of commitments, the more insurance cover you need. I view the cost of insurance as a necessary consequence of borrowing money. That is, if you aren’t prepared to obtain insurance to reduce your risk, then perhaps you should reconsider borrowing.
2. Your financial strength or net worth. The stronger your asset base is, the less insurance you need, as you have sufficient financial resources to maintain living expenses and meet goals for the rest of your life in the event you cannot work. Of course, if you do not have sufficient assets, you need some level of insurance cover.

Your requirements often depend on your stage of life
In the below video I walk you through the four common life cycle phases and how they relate to your insurance requirements.


Single
Whilst young adults typically have very small asset bases, they also tend to have very few (or no) financial commitments or dependants. As such, they tend to need very small levels of insurance cover, or possibly none.

Young family
When you buy a home and start a family, your insurance requirements are probably at their lifetime peak. That’s because your financial obligations tend to be most significant (e.g. large mortgage, cost of raising children for the next 18+ years, etc.) at the same time as your asset base being relatively low. It is convenient that insurance is relatively cost-effective in your 30’s, so having an adequate level protection is often affordable.

As your kids get older and your asset base grows, arguably you can begin to reduce your level of cover, particularly as it becomes more costly.

Empty nesters
As your children approach financial independence and you have concentrated on repaying your home loan, it may be appropriate to begin reducing your insurance cover, particularly as it becomes a lot more costly in your 50’s.

Income protection becomes less valuable the older you are because it usually only pays a benefit until you are age 65. If you are 30 years of age, you are essentially insuring the next 35 years’ worth of in

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Personal insurance is becoming more difficult to obtain and increasingly costly to maintain. This blog outlines the approach we take when formulating how much insurance our clients need and strategies to manage its cost.

What is personal insurance?
This blog refers to personal insurance only. That typically includes up to four products:
§ Income protection insurance – which pays a monthly benefit if you are unable to work due to illness or injury;
§ Life – pays a lump sum benefit if you die;
§ TPD – stands for Total and Permanent Disability which pays a lump sum benefit if you are unable to ever return to work in the future, due to illness or injury; and
§ Trauma – pays a lump sum benefit if you are diagnosed with a ‘specified condition’ which, statistically, includes cancer and cardiovascular events. Even if your ability to be able to work is not impaired, you can still claim a benefit. Benefits are paid according to diagnoses, not symptoms.

Other common insurance products such as health, house and contents and car insurances are defined as ‘general insurance’ products. These are the domain of general insurance brokers, not financial advisors.

What determines how much insurance you need?
In most situations, the two key factors which dictate how much insurance you need are:
1. Financial commitments and obligations including mortgages, living expenses, children’s education, dependents and so on. The higher the levels of commitments, the more insurance cover you need. I view the cost of insurance as a necessary consequence of borrowing money. That is, if you aren’t prepared to obtain insurance to reduce your risk, then perhaps you should reconsider borrowing.
2. Your financial strength or net worth. The stronger your asset base is, the less insurance you need, as you have sufficient financial resources to maintain living expenses and meet goals for the rest of your life in the event you cannot work. Of course, if you do not have sufficient assets, you need some level of insurance cover.

Your requirements often depend on your stage of life
In the below video I walk you through the four common life cycle phases and how they relate to your insurance requirements.


Single
Whilst young adults typically have very small asset bases, they also tend to have very few (or no) financial commitments or dependants. As such, they tend to need very small levels of insurance cover, or possibly none.

Young family
When you buy a home and start a family, your insurance requirements are probably at their lifetime peak. That’s because your financial obligations tend to be most significant (e.g. large mortgage, cost of raising children for the next 18+ years, etc.) at the same time as your asset base being relatively low. It is convenient that insurance is relatively cost-effective in your 30’s, so having an adequate level protection is often affordable.

As your kids get older and your asset base grows, arguably you can begin to reduce your level of cover, particularly as it becomes more costly.

Empty nesters
As your children approach financial independence and you have concentrated on repaying your home loan, it may be appropriate to begin reducing your insurance cover, particularly as it becomes a lot more costly in your 50’s.

Income protection becomes less valuable the older you are because it usually only pays a benefit until you are age 65. If you are 30 years of age, you are essentially insuring the next 35 years’ worth of in

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 8c196b54-009b-4f4e-91cb-c9cb28ad1585 Wed, 29 Sep 2021 08:00:00 +1000 1108 Investopoly,wemyss,income portection,financial advice,insurance,income protection insurance,Life insurance,trauma insurance,rules of the lending game,prosolution,prosolution private clients 1 181 false How to value stocks - an introduction to valuation concepts How to value stocks - an introduction to valuation concepts How to value stocks – an introduction to valuation concepts
Two years ago I wrote a popular blog that explained some simple share market concepts and jargon (see here). Building on this introductory information, I thought it was timely to discuss basic share market valuation principles to help investors assess whether a stock is over or under valued.

To be clear, I’m not advocating investing in direct stocks. In fact, there is an overwhelming amount of evidence that demonstrates direct share investing (i.e. picking stocks) fails to produce above market returns over the long run. However, it is still useful to understand basic share market valuation principles.

The ‘Efficient-Market Hypothesis’
The Efficient-Market Hypothesis (EMH) was popularised by Nobel laureate, Professor Eugene Fama. The hypothesis suggests that share prices always accurately reflect all available information. The idea is that the market is made up of thousands (and in some cases, perhaps millions of people) that analyse all available information in relation to a particular company. Many of them are professional investment managers with a lot of education and experience working 40-80 hours per week. This information informs their trades i.e. at what price they are happy to buy and sell. And it is this process of “price discovery” that determines the value of a stock.

My personal view is that the EMH might be true over long periods of time. However, in the short run, it is possible (in fact, likely) that markets can be inefficient. Behavioural economics explains that sometimes investors can act irrationally, driven by overconfidence, overreaction, overexuberance, greed, fear and so on. The “meme stock” behaviour earlier this year is a perfect example of how markets can be inefficient and stock prices can be wrong.

This is why it’s useful to understand basic valuation principals.

The value of a business is equal to the present value of its future cash flows
The value of any business is equal to the present value of its future cash flows. To calculate that, you need to forecast the business’ free cash flows and then apply a discount rate to express the value in today’s dollars. The discount rate must reflect the risk associated with the cash flows e.g. the higher the risk, the higher the discount rate. This is called Discounted Cash Flows analysis.

The table below provides a simple example. This business has a 5-year government contract and is expected to generate $100 per year of free cash flow (i.e. income less all expenses including taxation). After 5 years, the business is not expected to continue. Because the business’ revenue is contractually guaranteed and therefore low risk, a lower discount rate of 8% has been used. The discount rate reflects the return an investor would require to be compensated for the risk. Each year is discounted in today’s dollars using the discount rate. For example, refer to year three. The present value of $100 is $79.38. That means if I have $79.38 today and earn 8% p.a., I’ll have $100 in 3 years from now.

The aggregate value of the present value of future free cash flows is the business’ value, which is $399.


Shortcut method: valuation multiples
Completing a DCF analysis is time consuming and there’s probably not enough publicly available in

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> How to value stocks – an introduction to valuation concepts
Two years ago I wrote a popular blog that explained some simple share market concepts and jargon (see here). Building on this introductory information, I thought it was timely to discuss basic share market valuation principles to help investors assess whether a stock is over or under valued.

To be clear, I’m not advocating investing in direct stocks. In fact, there is an overwhelming amount of evidence that demonstrates direct share investing (i.e. picking stocks) fails to produce above market returns over the long run. However, it is still useful to understand basic share market valuation principles.

The ‘Efficient-Market Hypothesis’
The Efficient-Market Hypothesis (EMH) was popularised by Nobel laureate, Professor Eugene Fama. The hypothesis suggests that share prices always accurately reflect all available information. The idea is that the market is made up of thousands (and in some cases, perhaps millions of people) that analyse all available information in relation to a particular company. Many of them are professional investment managers with a lot of education and experience working 40-80 hours per week. This information informs their trades i.e. at what price they are happy to buy and sell. And it is this process of “price discovery” that determines the value of a stock.

My personal view is that the EMH might be true over long periods of time. However, in the short run, it is possible (in fact, likely) that markets can be inefficient. Behavioural economics explains that sometimes investors can act irrationally, driven by overconfidence, overreaction, overexuberance, greed, fear and so on. The “meme stock” behaviour earlier this year is a perfect example of how markets can be inefficient and stock prices can be wrong.

This is why it’s useful to understand basic valuation principals.

The value of a business is equal to the present value of its future cash flows
The value of any business is equal to the present value of its future cash flows. To calculate that, you need to forecast the business’ free cash flows and then apply a discount rate to express the value in today’s dollars. The discount rate must reflect the risk associated with the cash flows e.g. the higher the risk, the higher the discount rate. This is called Discounted Cash Flows analysis.

The table below provides a simple example. This business has a 5-year government contract and is expected to generate $100 per year of free cash flow (i.e. income less all expenses including taxation). After 5 years, the business is not expected to continue. Because the business’ revenue is contractually guaranteed and therefore low risk, a lower discount rate of 8% has been used. The discount rate reflects the return an investor would require to be compensated for the risk. Each year is discounted in today’s dollars using the discount rate. For example, refer to year three. The present value of $100 is $79.38. That means if I have $79.38 today and earn 8% p.a., I’ll have $100 in 3 years from now.

The aggregate value of the present value of future free cash flows is the business’ value, which is $399.


Shortcut method: valuation multiples
Completing a DCF analysis is time consuming and there’s probably not enough publicly available in

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 71cecdff-8fe4-4f0f-b18e-a7e866f6bc9b Wed, 22 Sep 2021 08:00:00 +1000 1444 investopoly,wemyss,rules of the lending game,prosolution,shares,share market,index funds 1 180 false Mastering a successful mindset... 5 fears about money Mastering a successful mindset... 5 fears about money Over the past 20 years, the US share market has risen 5-fold, the Australian share market 5.4-fold and Australian property 4.2-fold. That means if you invested half a million dollars 20 years ago, in either shares or property, it should be worth between $2 and $2.5 million today. You’d have even more money if you added some gearing.

This observation raises an interesting question. That is, why aren’t more people independently wealthy? I suspect the answer lies in their actions, or more correctly their inaction.

We make emotional decisions not logical ones
It is a widely accepted fact that we make decisions based on our emotions (how we feel) and then rationalise these decisions with logic. Often, we do this unconsciously.

We’d like to believe that we are logical and rational animals. But the truth is that we are not. Our decisions, particularly about money, are shaped by our beliefs, upbringing, our peer group, past experiences and culture. We tell ourselves stories about money. And then we use confirmation bias to validate those stories.

Self-awareness and reflection are probably the greatest gifts as they help you recognise how you think, so you can stop allowing emotions influence your financial decisions.

Building wealth requires a logical, pragmatic and rational approach. Emotions are not only unhelpful but can be dangerous.

Common fear # 1: Paying attention will be painful
Sometimes it feels easier to stick our head in the sand and ignore a (potential) problem. For example, most people know that it’s not financially prudent to spend all income on lifestyle expenses. They probably realise that they should be investing/saving some of their income. But to do that, they will have to admit to themselves (and maybe others) that they have been doing the wrong thing in the past. It feels less painful to ignore the issue and “get to it one day”.

The problem with ignoring financial misbehaviours is that they magically don’t disappear. They compound. Just like good financial decisions compound, so do bad ones. The longer you ignore it, the worse the consequences will be. And those consequences will be forced upon you at some point in life. For example, you will have to stop working at some point in your life and it’s that point that you will rely on your savings/investments or lack thereof.

Often, people in this situation will not do anything until the perceived pain (consequences) from not changing becomes greater than the pain of changing. This often occurs when they are 5-10 years from retirement. They start to think that they’d better start investing before it becomes too late.

The solution is to educate yourself about the cost of procrastination. Spending all your income for a couple of years is not a big deal. But doing it for 20-30 years may cost you dearly.

Common fear # 2: Investing is too risky. I could lose my money
We work hard to accumulate savings. We make sacrifices. And having savings in the bank helps us feel financially secure. Of course, we don’t want to lose that money.

When you invest, you do so with the intention of generating future returns. Of course, investment returns are not certain. Investment returns can vary from initial expectations. This is called investment risk - i.e. the risk that you don’t achieve your targeted investment returns.

This perceived risk can paralyse some investors into doing nothing.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Over the past 20 years, the US share market has risen 5-fold, the Australian share market 5.4-fold and Australian property 4.2-fold. That means if you invested half a million dollars 20 years ago, in either shares or property, it should be worth between $2 and $2.5 million today. You’d have even more money if you added some gearing.

This observation raises an interesting question. That is, why aren’t more people independently wealthy? I suspect the answer lies in their actions, or more correctly their inaction.

We make emotional decisions not logical ones
It is a widely accepted fact that we make decisions based on our emotions (how we feel) and then rationalise these decisions with logic. Often, we do this unconsciously.

We’d like to believe that we are logical and rational animals. But the truth is that we are not. Our decisions, particularly about money, are shaped by our beliefs, upbringing, our peer group, past experiences and culture. We tell ourselves stories about money. And then we use confirmation bias to validate those stories.

Self-awareness and reflection are probably the greatest gifts as they help you recognise how you think, so you can stop allowing emotions influence your financial decisions.

Building wealth requires a logical, pragmatic and rational approach. Emotions are not only unhelpful but can be dangerous.

Common fear # 1: Paying attention will be painful
Sometimes it feels easier to stick our head in the sand and ignore a (potential) problem. For example, most people know that it’s not financially prudent to spend all income on lifestyle expenses. They probably realise that they should be investing/saving some of their income. But to do that, they will have to admit to themselves (and maybe others) that they have been doing the wrong thing in the past. It feels less painful to ignore the issue and “get to it one day”.

The problem with ignoring financial misbehaviours is that they magically don’t disappear. They compound. Just like good financial decisions compound, so do bad ones. The longer you ignore it, the worse the consequences will be. And those consequences will be forced upon you at some point in life. For example, you will have to stop working at some point in your life and it’s that point that you will rely on your savings/investments or lack thereof.

Often, people in this situation will not do anything until the perceived pain (consequences) from not changing becomes greater than the pain of changing. This often occurs when they are 5-10 years from retirement. They start to think that they’d better start investing before it becomes too late.

The solution is to educate yourself about the cost of procrastination. Spending all your income for a couple of years is not a big deal. But doing it for 20-30 years may cost you dearly.

Common fear # 2: Investing is too risky. I could lose my money
We work hard to accumulate savings. We make sacrifices. And having savings in the bank helps us feel financially secure. Of course, we don’t want to lose that money.

When you invest, you do so with the intention of generating future returns. Of course, investment returns are not certain. Investment returns can vary from initial expectations. This is called investment risk - i.e. the risk that you don’t achieve your targeted investment returns.

This perceived risk can paralyse some investors into doing nothing.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 56b092da-2179-4740-b354-b574245c5025 Wed, 15 Sep 2021 08:00:00 +1000 1252 investopoly,rules of the lending game,wemyss,financial advisor,financial planning,financial advice,choosing a financial advsior,financial advsier 1 179 false Loan structuring 101: How to finance a property portfolio Loan structuring 101: How to finance a property portfolio Borrowing to invest in property is a popular and highly effective wealth accumulation strategy if it’s implemented correctly. However, loan structuring can often be an afterthought. The reality is that loan structuring and maximising your borrowing capacity is almost just as important as buying the right property. This blog sets out how to structure your loans to build a property portfolio.

A step-by-step example
The video below takes you through an example of how to structure your loans.

See video here.

Step one: access equity (deposit loan)
You will need to pay a deposit (usually 10%) when you purchase a property. Therefore, you need to arrange access to these borrowed funds. Even if you have access to cash savings, I still recommend that you establish a new loan. This blog explains why this is important.

I recommend arranging a loan sufficient to fund 20% of the property’s value plus all costs in addition to a buffer. This loan will be secured by an existing property e.g. your home.

Step two: arrange an 80% loan
You will be able to fund 20% plus all costs from the deposit loan. Therefore, you need to arrange a second investment loan to fund the remaining 80%. This loan will be secured by the investment property only. This loan should be pre-approved before you purchase.

Step three: consolidate loans
When your investment property’s value has risen by 35% to 40% above the purchase price, which could take 5 to 7 years, you should be able to consolidate the deposit loan with the 80% loan so that all the debt is in one loan solely secured by the investment property. In this case, your home is no longer required as security.

This structure avoids cross-securitisation which is important as explained in this blog.

Additional investment properties
If you plan to invest in multiple properties, you can repeat the steps above. For simplicity, it is acceptable to maintain one deposit loan to fund deposits for multiple properties. If you do so, you must maintain good record keeping. Personally, I maintain a spreadsheet that includes a list of all purchasing costs, as that helps me verify loan amounts and calculates the investment property’s cost base for CGT purposes.

Current considerations
The table below sets out how we generally structure interest rates and repayments in the current environment. Of course, if you are reading this blog after 2021, these recommendations may no longer be appropriate.

See table here.

Successful investors don’t care about interest rates
Borrowing costs (interest rates and fees) are important, of course. However, maximising your borrowing capacity in a safe and prudent manner is far more important… about 8.5 times more important to be specific!

There are two important benefits resulting from having a higher borrowing capacity. Firstly, you will be able to afford to invest in a higher-quality asset. Higher quality assets generally exhibit higher long-term capital growth rates and lower investment risks. Secondly, it may help you invest in more

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Borrowing to invest in property is a popular and highly effective wealth accumulation strategy if it’s implemented correctly. However, loan structuring can often be an afterthought. The reality is that loan structuring and maximising your borrowing capacity is almost just as important as buying the right property. This blog sets out how to structure your loans to build a property portfolio.

A step-by-step example
The video below takes you through an example of how to structure your loans.

See video here.

Step one: access equity (deposit loan)
You will need to pay a deposit (usually 10%) when you purchase a property. Therefore, you need to arrange access to these borrowed funds. Even if you have access to cash savings, I still recommend that you establish a new loan. This blog explains why this is important.

I recommend arranging a loan sufficient to fund 20% of the property’s value plus all costs in addition to a buffer. This loan will be secured by an existing property e.g. your home.

Step two: arrange an 80% loan
You will be able to fund 20% plus all costs from the deposit loan. Therefore, you need to arrange a second investment loan to fund the remaining 80%. This loan will be secured by the investment property only. This loan should be pre-approved before you purchase.

Step three: consolidate loans
When your investment property’s value has risen by 35% to 40% above the purchase price, which could take 5 to 7 years, you should be able to consolidate the deposit loan with the 80% loan so that all the debt is in one loan solely secured by the investment property. In this case, your home is no longer required as security.

This structure avoids cross-securitisation which is important as explained in this blog.

Additional investment properties
If you plan to invest in multiple properties, you can repeat the steps above. For simplicity, it is acceptable to maintain one deposit loan to fund deposits for multiple properties. If you do so, you must maintain good record keeping. Personally, I maintain a spreadsheet that includes a list of all purchasing costs, as that helps me verify loan amounts and calculates the investment property’s cost base for CGT purposes.

Current considerations
The table below sets out how we generally structure interest rates and repayments in the current environment. Of course, if you are reading this blog after 2021, these recommendations may no longer be appropriate.

See table here.

Successful investors don’t care about interest rates
Borrowing costs (interest rates and fees) are important, of course. However, maximising your borrowing capacity in a safe and prudent manner is far more important… about 8.5 times more important to be specific!

There are two important benefits resulting from having a higher borrowing capacity. Firstly, you will be able to afford to invest in a higher-quality asset. Higher quality assets generally exhibit higher long-term capital growth rates and lower investment risks. Secondly, it may help you invest in more

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 9418deaa-1a9a-477a-9b49-d7f3bc7521de Wed, 08 Sep 2021 08:00:00 +1000 1364 investopoly,wemyss,rules of the lending game,prosolution,borrowing capacity,borrowing to invest,borrowings,responsible lending,loan structure,loan structuring,mortgage broker, 1 178 false A powerful share market investment strategy you can implement yourself A powerful share market investment strategy you can implement yourself Investing in the share market is a relatively easy, simple and a low-cost investment strategy to implement, if you know the right way to do it, of course. However, if you don’t know what you’re doing, it’s easy to mess it up. In this blog, I set out how to implement a highly successful (over the long run) share market investment strategy using a low-cost, evidence-based approach.

Of course, the information in this blog (and in fact, in all my blogs) is general in nature. It’s not written or tailored for you, as I do not know your personal circumstances, goals, risk appetite and so on. Therefore, be careful. If you have any doubt, always seek independent financial advice.

There are three steps to implementing a share market investment strategy.

Step one: chose your investment methodology
When investing in the share market, you have three broad options:
1. Invest in direct shares i.e. pick the stocks that you would like to buy;
2. Employ the services of professionals to pick the stocks on your behalf e.g. use a stockbroker or actively managed fund; and/or
3. Invest in low-cost index funds (this could be described as a rules-based approach to picking which stocks to invest in).

Regular readers of this blog will know that I strongly believe in only employing evidence-based investment approaches. And there’s an overwhelming amount of evidence that demonstrates that index investing has the greatest probability of generating the highest returns over the long run. If you’d like to learn more, I present this evidence in this blog and also in my book, Investopoly.

Some people are attracted to investing in shares for fun (i.e. a bit of excitement). A perfect example of this is what happened to US stock, GameStop and other meme stocks. The core purpose of investing is to build wealth, not to have fun! In fact, if done correctly investing should be boring. Although the process might be boring, the outcome is exciting!

Step two: pick the product
Now that you have decided to adopt an indexing methodology (if not, return to step # 1!), it is time to pick the product you will use.

I strongly recommend you use a diversified product. A diversified product invests in a variety of sub-asset classes such as Australian shares, international shares, emerging markets, bonds and smaller companies. The asset allocation is professionally managed which means there’s less room for error. Currently, two Australian ETF providers offer these products:
§ Vanguard – VDGR has a very broad asset allocation with 70% invested in shares and 30% in bonds. VDHG has a more aggressive asset allocation with 90% invested in shares.
§ BetaShares – DHHF is 100% invested in shares i.e. no bonds.
§ Ethical investments – BetaShares also has some ethical options including DGGF (70% in shares) and DZZF (90% in shares). These funds screen out companies that are large carbon dioxide emitters i.e. fossil fuels.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Investing in the share market is a relatively easy, simple and a low-cost investment strategy to implement, if you know the right way to do it, of course. However, if you don’t know what you’re doing, it’s easy to mess it up. In this blog, I set out how to implement a highly successful (over the long run) share market investment strategy using a low-cost, evidence-based approach.

Of course, the information in this blog (and in fact, in all my blogs) is general in nature. It’s not written or tailored for you, as I do not know your personal circumstances, goals, risk appetite and so on. Therefore, be careful. If you have any doubt, always seek independent financial advice.

There are three steps to implementing a share market investment strategy.

Step one: chose your investment methodology
When investing in the share market, you have three broad options:
1. Invest in direct shares i.e. pick the stocks that you would like to buy;
2. Employ the services of professionals to pick the stocks on your behalf e.g. use a stockbroker or actively managed fund; and/or
3. Invest in low-cost index funds (this could be described as a rules-based approach to picking which stocks to invest in).

Regular readers of this blog will know that I strongly believe in only employing evidence-based investment approaches. And there’s an overwhelming amount of evidence that demonstrates that index investing has the greatest probability of generating the highest returns over the long run. If you’d like to learn more, I present this evidence in this blog and also in my book, Investopoly.

Some people are attracted to investing in shares for fun (i.e. a bit of excitement). A perfect example of this is what happened to US stock, GameStop and other meme stocks. The core purpose of investing is to build wealth, not to have fun! In fact, if done correctly investing should be boring. Although the process might be boring, the outcome is exciting!

Step two: pick the product
Now that you have decided to adopt an indexing methodology (if not, return to step # 1!), it is time to pick the product you will use.

I strongly recommend you use a diversified product. A diversified product invests in a variety of sub-asset classes such as Australian shares, international shares, emerging markets, bonds and smaller companies. The asset allocation is professionally managed which means there’s less room for error. Currently, two Australian ETF providers offer these products:
§ Vanguard – VDGR has a very broad asset allocation with 70% invested in shares and 30% in bonds. VDHG has a more aggressive asset allocation with 90% invested in shares.
§ BetaShares – DHHF is 100% invested in shares i.e. no bonds.
§ Ethical investments – BetaShares also has some ethical options including DGGF (70% in shares) and DZZF (90% in shares). These funds screen out companies that are large carbon dioxide emitters i.e. fossil fuels.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss a408bb30-10f2-4db7-bfd9-c1e7a8d96390 Wed, 01 Sep 2021 08:00:00 +1000 1487 investopoly,wemyss,rules of the lending game,prosolution,shares,share market,index funds,vanguard,BetaShares,ASX, 1 177 false What impact will the prolonged lockdowns have on the property market and economy? What impact will the prolonged lockdowns have on the property market and economy? Approximately half of Australia’s population is currently in a lockdown, and this may continue for another few months until vaccine target levels are reached. I wanted to discuss what impact this may have on the property market and the broader economy.

Of course, there are wide ranging impacts
The impact of Covid lockdowns can be wide-ranging. Dealing with the challenges of home schooling, not seeing family, not enjoying your normal pastimes, business failures, job losses, mental health challenges and so on. Of course, we all have a tremendous amount of empathy for the various ways that lockdowns are negatively impacting people’s lives. That said, the aim of this blog is to focus purely on economic impacts only.

What we learnt from previous lockdowns
The lockdowns in Australia during 2020 and around the world taught us some valuable lessons, as there were some common themes, namely:
§ Low-income earners tend to be impacted to a much greater extent. In fact, it is not uncommon for higher income earners to avoid any negative financial impacts from being in lockdown, because as they can work from home, they retain their employment and income.
§ Because people cannot undertake their normal (non-lockdown) activities, we observe two economic trends. Firstly, people save more money (i.e. the savings rate spikes), which improves their financial position. Secondly, people tend to spend more on durable goods – although this trend will probably diminish at some point – how many new appliances do we really need!
§ Whilst an increase in business failures hasn’t yet been reflected in insolvency statistics, it stands to reason that each successive lockdown (Melbourne’s onto its 6th) puts an increasing amount of pressure on some businesses, as their financial resources deplete. Anecdotally, unfortunately I have observed a greater number of business closures in the Melbourne CBD over the past couple of months.
§ Overall economic demand does tend to bounce back strongly and quickly. At a macro level, demand for spending by higher income earners tends to more than compensate for lower levels of demand by income earners.

But we don’t have JobKeeper anymore?
The federal government’s Covid-19 Disaster Payment provides an income of $750 per week to those that have lost 20 hours or more of work during a lockdown. The highest JobKeeper payment during 2020 was $1,500 per fortnight, so this is on par.

However, according to Deloitte Access Economics, only about 2 million Australian’s were accessing this Disaster Payment in August 2021, compared to 6 million that accessed JobKeeper in March 2020. That means less money from government assistance is being pumped into the Australian economy. That said, the JobKeeper program was widely criticised for its untargeted nature e.g. some large businesses claimed JobKeeper and subsequently declared record profits and dividends (e.g. Harvey Norman). As such, perhaps this Disaster Payment package is more efficient and still just as effective. Regardless, the Australian federal government will rack up more than $1 trillion of debt from supporting the economy through Covid, so it isn’t going to stop now. I expect the federal government will provide more support should it be needed.

Apartment rental incomes will be under pressure
Renting an apartment tends to be more affordable than renting a house. As such, apartments are tenanted by a higher proportion of lower income earners. Whilst the federal gover

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Approximately half of Australia’s population is currently in a lockdown, and this may continue for another few months until vaccine target levels are reached. I wanted to discuss what impact this may have on the property market and the broader economy.

Of course, there are wide ranging impacts
The impact of Covid lockdowns can be wide-ranging. Dealing with the challenges of home schooling, not seeing family, not enjoying your normal pastimes, business failures, job losses, mental health challenges and so on. Of course, we all have a tremendous amount of empathy for the various ways that lockdowns are negatively impacting people’s lives. That said, the aim of this blog is to focus purely on economic impacts only.

What we learnt from previous lockdowns
The lockdowns in Australia during 2020 and around the world taught us some valuable lessons, as there were some common themes, namely:
§ Low-income earners tend to be impacted to a much greater extent. In fact, it is not uncommon for higher income earners to avoid any negative financial impacts from being in lockdown, because as they can work from home, they retain their employment and income.
§ Because people cannot undertake their normal (non-lockdown) activities, we observe two economic trends. Firstly, people save more money (i.e. the savings rate spikes), which improves their financial position. Secondly, people tend to spend more on durable goods – although this trend will probably diminish at some point – how many new appliances do we really need!
§ Whilst an increase in business failures hasn’t yet been reflected in insolvency statistics, it stands to reason that each successive lockdown (Melbourne’s onto its 6th) puts an increasing amount of pressure on some businesses, as their financial resources deplete. Anecdotally, unfortunately I have observed a greater number of business closures in the Melbourne CBD over the past couple of months.
§ Overall economic demand does tend to bounce back strongly and quickly. At a macro level, demand for spending by higher income earners tends to more than compensate for lower levels of demand by income earners.

But we don’t have JobKeeper anymore?
The federal government’s Covid-19 Disaster Payment provides an income of $750 per week to those that have lost 20 hours or more of work during a lockdown. The highest JobKeeper payment during 2020 was $1,500 per fortnight, so this is on par.

However, according to Deloitte Access Economics, only about 2 million Australian’s were accessing this Disaster Payment in August 2021, compared to 6 million that accessed JobKeeper in March 2020. That means less money from government assistance is being pumped into the Australian economy. That said, the JobKeeper program was widely criticised for its untargeted nature e.g. some large businesses claimed JobKeeper and subsequently declared record profits and dividends (e.g. Harvey Norman). As such, perhaps this Disaster Payment package is more efficient and still just as effective. Regardless, the Australian federal government will rack up more than $1 trillion of debt from supporting the economy through Covid, so it isn’t going to stop now. I expect the federal government will provide more support should it be needed.

Apartment rental incomes will be under pressure
Renting an apartment tends to be more affordable than renting a house. As such, apartments are tenanted by a higher proportion of lower income earners. Whilst the federal gover

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 1586c712-07d8-4ffd-86cd-1258f562b045 Wed, 25 Aug 2021 08:00:00 +1000 1270 investopoly,wemyss,rules of the lending game,prosolution,property investing,property demand,property prices,property supply,invest in property,brisbane property,investment grade,lockdowns,covid,covid locdowns,economy,iron ore,RBA 1 176 false Land tax minimisation (or elimination) strategies Land tax minimisation (or elimination) strategies Land tax is levied on the value of an investor’s landholdings on 31 December each year. It is an insidious tax as any land tax is relatively small when you initially purchase an investment property but typically increases each year. As such, the problem is that it can become quite costly by the time you reach retirement – a time when it’s preferrable to pay less tax, not more.

There may be several opportunities to minimise land tax which are discussed in this blog.

Land value is a vital attribute of an investment-grade property
The value of a property comprises of the value of the underlying land plus the dwelling’s value (i.e. improvements that are permanently located on the land). Typically, land appreciates in value over time whereas buildings depreciate. Therefore, to maximise your property’s rate of capital growth, you must invest in property’s that have a high land value i.e. more than 50% of the property’s value should be in the land.

There are a couple of consequences of investing in high land value properties:
1. High land value properties tend to produce low rental yields. That’s because renters don’t really care about the value of the underlying land. Renters are more impressed by the size and quality of the accommodation; and
2. High land value properties attract higher land tax liabilities.

Remember, the power of compounding capital growth more than compensates investors for these disadvantages.

In the past, it hasn’t been wise to own property in a company but…
One of the major disadvantages of owning investments in a company is that a company is not entitled to the 50% capital gains tax discount.

If you realise a capital gain in your personal name of $100, you can discount that gross gain by 50% if you have held the investment for 12 months or longer. As such, the investor will be taxed on a net gain of $50 at their marginal tax rate. If they earn over $180,000 p.a., their rate of tax is 47%, so they will pay $23.50 in tax. In short, the maximum rate of tax in respect of CGT in their personal name is 23.5%.

If a company makes a capital gain of $100, it will pay tax on the whole gain as the 50% discount is not available. As the corporate tax rate is 30%, it will pay $30 of tax.

In this situation, the investor that uses a company pays a high tax rate by 6.5% (i.e. 28% more in tax). As such, companies used to be an unattractive ownership structure (also because negative gearing losses are trapped).

But the company tax rate has reduced in some situations
Companies that meet the eligibility of ‘base rate entities’ will be taxed at the flat rate of 25% from this financial year onwards. A company is a base rate entity if its turnover is less than $50 million and 80% or less of its income is passive income (which includes rental income).

This could create a good opportunity for self-employed taxpayers if they are able to distribute business income into a corporate beneficiary, so that the non-trading investment company meets the ‘base rate entity’ definition. In this case, the rate of CGT would be 25% versus 23.5% in a personal name. This is a far more palatable outcome, especially if a company ownership structure helps reduce land tax liabilities, as discussed below.

State based tax regime
Land tax is a state government tax, and each state has different rules. Principal places of residence do not attract land tax. But any properties in addition

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Land tax is levied on the value of an investor’s landholdings on 31 December each year. It is an insidious tax as any land tax is relatively small when you initially purchase an investment property but typically increases each year. As such, the problem is that it can become quite costly by the time you reach retirement – a time when it’s preferrable to pay less tax, not more.

There may be several opportunities to minimise land tax which are discussed in this blog.

Land value is a vital attribute of an investment-grade property
The value of a property comprises of the value of the underlying land plus the dwelling’s value (i.e. improvements that are permanently located on the land). Typically, land appreciates in value over time whereas buildings depreciate. Therefore, to maximise your property’s rate of capital growth, you must invest in property’s that have a high land value i.e. more than 50% of the property’s value should be in the land.

There are a couple of consequences of investing in high land value properties:
1. High land value properties tend to produce low rental yields. That’s because renters don’t really care about the value of the underlying land. Renters are more impressed by the size and quality of the accommodation; and
2. High land value properties attract higher land tax liabilities.

Remember, the power of compounding capital growth more than compensates investors for these disadvantages.

In the past, it hasn’t been wise to own property in a company but…
One of the major disadvantages of owning investments in a company is that a company is not entitled to the 50% capital gains tax discount.

If you realise a capital gain in your personal name of $100, you can discount that gross gain by 50% if you have held the investment for 12 months or longer. As such, the investor will be taxed on a net gain of $50 at their marginal tax rate. If they earn over $180,000 p.a., their rate of tax is 47%, so they will pay $23.50 in tax. In short, the maximum rate of tax in respect of CGT in their personal name is 23.5%.

If a company makes a capital gain of $100, it will pay tax on the whole gain as the 50% discount is not available. As the corporate tax rate is 30%, it will pay $30 of tax.

In this situation, the investor that uses a company pays a high tax rate by 6.5% (i.e. 28% more in tax). As such, companies used to be an unattractive ownership structure (also because negative gearing losses are trapped).

But the company tax rate has reduced in some situations
Companies that meet the eligibility of ‘base rate entities’ will be taxed at the flat rate of 25% from this financial year onwards. A company is a base rate entity if its turnover is less than $50 million and 80% or less of its income is passive income (which includes rental income).

This could create a good opportunity for self-employed taxpayers if they are able to distribute business income into a corporate beneficiary, so that the non-trading investment company meets the ‘base rate entity’ definition. In this case, the rate of CGT would be 25% versus 23.5% in a personal name. This is a far more palatable outcome, especially if a company ownership structure helps reduce land tax liabilities, as discussed below.

State based tax regime
Land tax is a state government tax, and each state has different rules. Principal places of residence do not attract land tax. But any properties in addition

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 78e2f3e4-8095-4d36-a746-52845f25bdfc Wed, 18 Aug 2021 08:00:00 +1000 1204 investopoly,wemyss,rules of the lending game,prosolution,property investing,property demand,property prices,invest in property,tax,land tax,CGT,capital gains tax,income tax,ownership structures 1 175 false Property versus shares; a practical comparison Property versus shares; a practical comparison As a completely independent advisor, I have no vested interest in how my clients invest. Whether they invest in property, shares or any other asset class makes no difference to my life. Of course, I want them to invest in (1) assets that are most appropriate for them and (2) assets that provide the highest returns without taking unacceptably high risk. I know that if I help my clients invest successfully, they will continue to remain clients and therein lies my firm’s success. Often investors contemplate (and compare) investing in either property or shares.

The property versus shares debate is meaningless
It is often debated which asset class is better, property or shares. I view this debate like arguing which golf club is best. Each club has its unique purpose, and the reality is that golfers need many clubs in their bag to play well. Investing is no different. Investing in a mixture of asset classes allows you to balance out the pros and cons of each asset class at a portfolio level. Ignoring any one asset class in totality gives rise to higher investment risk as you are putting too many eggs in one basket.

In summary, I think shares and property are equally good asset classes. I believe that most investors should invest in both. I believe that if you employ an evidence-based approach, in the long run, the investment returns produced by property and shares should be materially similar.

The big difference is an investors’ appetite for gearing
Most people feel more comfortable borrowing to invest in property but less so with shares. There is good reason for that. The chart below is from my book, Investopoly. It sets out the long term returns and corresponding volatility of each asset class.


The average volatility rate (or standard deviation) for shares is 20.9% and the average long-term return is 11.6% p.a. To put this in non-mathematical terms, two-thirds of the time, you can expect that your annual return from shares to be in the range of -9.3% and 32.5% (being plus or minus one standard deviation from the average). And 95% of the time your return will between -30% and 53% (plus or minus two standard deviations). That is a very wide range, right? And that is why shares are seen as volatile, as return can vary significantly from year to year.

However, residential property is a lot less volatile. Two-thirds of the time your return will range between 0% and 20%. And 95% of the time, between -10% and 30%. Whilst this is still a wide range, it’s a lot tighter than shares. That is why people feel more comfortable borrowing to invest in property, because the likelihood of experiencing a loss year (just after you have borrowed to invest) is relatively low (i.e. there were only 6 loss years between 1980 and 2016).

How to borrow to invest in shares
I would almost never recommend someone borrow a large lump sum of money and invest it in shares in one tranche, for the reasons described above i.e. volatility. Instead, I would usually recommend investing in a series of regular and relatively small tranches over (hopefully) many years. Doing so helps you spread your market timing risk.

This can be a very effective strategy as explained in this video by Vanguard (watch from 1:30min). This example shows that if you invested $500 per month in an Australian index fund beginning in 1990, that by June 2020 your investment would be worth $760,000. This balance comprises of $177,000 of your contributions plus $583,000 of investm

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> As a completely independent advisor, I have no vested interest in how my clients invest. Whether they invest in property, shares or any other asset class makes no difference to my life. Of course, I want them to invest in (1) assets that are most appropriate for them and (2) assets that provide the highest returns without taking unacceptably high risk. I know that if I help my clients invest successfully, they will continue to remain clients and therein lies my firm’s success. Often investors contemplate (and compare) investing in either property or shares.

The property versus shares debate is meaningless
It is often debated which asset class is better, property or shares. I view this debate like arguing which golf club is best. Each club has its unique purpose, and the reality is that golfers need many clubs in their bag to play well. Investing is no different. Investing in a mixture of asset classes allows you to balance out the pros and cons of each asset class at a portfolio level. Ignoring any one asset class in totality gives rise to higher investment risk as you are putting too many eggs in one basket.

In summary, I think shares and property are equally good asset classes. I believe that most investors should invest in both. I believe that if you employ an evidence-based approach, in the long run, the investment returns produced by property and shares should be materially similar.

The big difference is an investors’ appetite for gearing
Most people feel more comfortable borrowing to invest in property but less so with shares. There is good reason for that. The chart below is from my book, Investopoly. It sets out the long term returns and corresponding volatility of each asset class.


The average volatility rate (or standard deviation) for shares is 20.9% and the average long-term return is 11.6% p.a. To put this in non-mathematical terms, two-thirds of the time, you can expect that your annual return from shares to be in the range of -9.3% and 32.5% (being plus or minus one standard deviation from the average). And 95% of the time your return will between -30% and 53% (plus or minus two standard deviations). That is a very wide range, right? And that is why shares are seen as volatile, as return can vary significantly from year to year.

However, residential property is a lot less volatile. Two-thirds of the time your return will range between 0% and 20%. And 95% of the time, between -10% and 30%. Whilst this is still a wide range, it’s a lot tighter than shares. That is why people feel more comfortable borrowing to invest in property, because the likelihood of experiencing a loss year (just after you have borrowed to invest) is relatively low (i.e. there were only 6 loss years between 1980 and 2016).

How to borrow to invest in shares
I would almost never recommend someone borrow a large lump sum of money and invest it in shares in one tranche, for the reasons described above i.e. volatility. Instead, I would usually recommend investing in a series of regular and relatively small tranches over (hopefully) many years. Doing so helps you spread your market timing risk.

This can be a very effective strategy as explained in this video by Vanguard (watch from 1:30min). This example shows that if you invested $500 per month in an Australian index fund beginning in 1990, that by June 2020 your investment would be worth $760,000. This balance comprises of $177,000 of your contributions plus $583,000 of investm

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 56059abc-f869-4e0c-bda3-d75c9a66e6e0 Wed, 11 Aug 2021 08:00:00 +1000 1134 investopoly,wemyss,rules of the lending game,prosolution,property investing,property demand,property prices,invest in property,shares,share market,index funds,vanguard,property versus shares, 1 174 false Investment case for Brisbane property: Pros and cons Investment case for Brisbane property: Pros and cons I hosted a seminar in August 2018 where I presented an investment case for (investment-grade) houses in Brisbane in the $800,000 to $1m price range. It was my thesis that they represented excellent value and had a high probability of delivering above-average returns in the medium term. An investment grade house that sold for circa $800,000 in late 2018 would be worth well over $1 million today.

Depending on your financial position, existing assets and investment strategy, an investment-grade property in Brisbane might still be an excellent investment. I set out some pros and cons to consider in this blog (in no particular order).

Pro: Overseas and interstate migration
The chart below sets out interstate migration for NSW, Victoria and Queensland. Sydney’s interstate migration has been negative for many years (as a Melbournian, I’ll resist the temptation to disparage Sydney). The clear trend over the past 5 years is that a growing number of people are moving from Victoria and NSW to Queensland. However, historically, almost all interstate migrants move to the Sunshine and Gold Coast, not Brisbane. However, I suspect that Covid might change that trend.


This next chart sets out net overseas migration since 2004. Overseas migration declined significantly between 2008 and 2015. It was starting to recover but of course Covid has interrupted that. Unlike interstate migration, almost all overseas migrants move to Brisbane.


Interestingly, New Zealanders tend to represent around half of the total permanent migrants. But fewer New Zealanders have been moving to Queensland in recent (pre-covid) years. The number of New Zealand migrants between 2017 and 2019 ranged between 1,500 and 3,000. By comparison, in 2008 over 16,000 New Zealanders moved to Queensland. A rebound in New Zealand migration could have positive consequences for Brisbane and its property market.

I suspect that Covid has highlighted how attractive Australia is as a designation for overseas migrants. And, for some of the reasons highlighted below, Brisbane is well positioned to attract a large share of these immigrants.

Pro: Large infrastructure spending
Brisbane is in the midst of a
$20 billion infrastructure spend including major projects such as Cross River Rail, Queen’s Wharf Precinct, Showgrounds Masterplan, Brisbane Live entrainment precinct and so on.

Last year, the Queensland government completed construction of a second runway at Brisbane airport at a cost of $1.4 billion. It is projected to generate $5 billion of economic benefit over the next 10 years.

And of course, Brisbane will host the 2032 Olympic games. KPMG projects that it will deliver $4.6 billion in economic benefits.

These infrastructure projects contribute positively to Brisbane’s ability to attract a growing number of overseas and interstate migrants.

Con: Smaller city (population)
Brisbane’s population is almost half the size of Melbourne and Sydney, which means there are fewer high net worth persons that are willing and able to drive blue-chip property prices higher. As I have written before, property

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> I hosted a seminar in August 2018 where I presented an investment case for (investment-grade) houses in Brisbane in the $800,000 to $1m price range. It was my thesis that they represented excellent value and had a high probability of delivering above-average returns in the medium term. An investment grade house that sold for circa $800,000 in late 2018 would be worth well over $1 million today.

Depending on your financial position, existing assets and investment strategy, an investment-grade property in Brisbane might still be an excellent investment. I set out some pros and cons to consider in this blog (in no particular order).

Pro: Overseas and interstate migration
The chart below sets out interstate migration for NSW, Victoria and Queensland. Sydney’s interstate migration has been negative for many years (as a Melbournian, I’ll resist the temptation to disparage Sydney). The clear trend over the past 5 years is that a growing number of people are moving from Victoria and NSW to Queensland. However, historically, almost all interstate migrants move to the Sunshine and Gold Coast, not Brisbane. However, I suspect that Covid might change that trend.


This next chart sets out net overseas migration since 2004. Overseas migration declined significantly between 2008 and 2015. It was starting to recover but of course Covid has interrupted that. Unlike interstate migration, almost all overseas migrants move to Brisbane.


Interestingly, New Zealanders tend to represent around half of the total permanent migrants. But fewer New Zealanders have been moving to Queensland in recent (pre-covid) years. The number of New Zealand migrants between 2017 and 2019 ranged between 1,500 and 3,000. By comparison, in 2008 over 16,000 New Zealanders moved to Queensland. A rebound in New Zealand migration could have positive consequences for Brisbane and its property market.

I suspect that Covid has highlighted how attractive Australia is as a designation for overseas migrants. And, for some of the reasons highlighted below, Brisbane is well positioned to attract a large share of these immigrants.

Pro: Large infrastructure spending
Brisbane is in the midst of a
$20 billion infrastructure spend including major projects such as Cross River Rail, Queen’s Wharf Precinct, Showgrounds Masterplan, Brisbane Live entrainment precinct and so on.

Last year, the Queensland government completed construction of a second runway at Brisbane airport at a cost of $1.4 billion. It is projected to generate $5 billion of economic benefit over the next 10 years.

And of course, Brisbane will host the 2032 Olympic games. KPMG projects that it will deliver $4.6 billion in economic benefits.

These infrastructure projects contribute positively to Brisbane’s ability to attract a growing number of overseas and interstate migrants.

Con: Smaller city (population)
Brisbane’s population is almost half the size of Melbourne and Sydney, which means there are fewer high net worth persons that are willing and able to drive blue-chip property prices higher. As I have written before, property

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss d0c7da9b-7634-4950-9243-67009e785e37 Wed, 04 Aug 2021 08:00:00 +1000 1175 investopoly,wemyss,rules of the lending game,prosolution,property investing,property demand,property prices,property supply,invest in property,rental yield,brisbane property,investment grade,Brisbane 1 173 false 2021 super returns: The best industry funds & important considerations 2021 super returns: The best industry funds & important considerations It is not unrealistic to expect your super returns to be over 20% for the financial year ended June 2021. Of course, this is a great outcome in what has been a tumultuous year. However, I would like to highlight some important observations and considerations.

And the 2021 winner is…
The table below sets out investment returns for the largest 8 industry funds based on a Balanced investment option (data from Lonsec). The table is sorted by 1-year returns, highest to lowest for the financial year ended June 2021. Hostplus achieved the highest return. However, AustralianSuper is the best performing fund over 3, 5, 7 and 10 years as highlighted.


I have selected the relevant pre-mixed investment option that has between 60% and 76% of assets invested in growth assets e.g. shares. This is defined as a Balanced asset allocation. You will note however that some super funds don’t use the Balanced description – some call it Growth or Core and so on. This highlights that it is important to not rely solely on an investment option’s name. Instead it is important to examine the actual asset allocation of the option you are considering.

This list of top 10 super funds includes all industry and retail funds (my list above only compared the 8 largest industry funds).

Click here to view a similar comparison for a Growth investment option.

Often, it’s impossible to understand how your money is invested
Of course, it is basic common sense to make sure that you always understand how your money is invested. However, that can be challenging with some industry funds. Most people assume their money is invested in share and bond markets. However, some industry super funds invest a large amount of your balance in “alternative” investments.

Alternative investments can include almost any type of investment that cannot be classified as shares, bonds, property or cash. Alternative investments include things such as infrastructure, construction and private credit, hedge funds, private equity, currency, commodities and so on. Industry super funds do not have to disclose any detail regarding these investments. In fact, any information is often value vague so it’s impossible to assess the underlying risk.

The chart below (data from Lonsec) highlights that the amount each industry funds allocates to alternative assets. This ranges from 5% (UniSuper) to 33% (Hostplus).


Risks with alternative assets
The advantage of listed assets, such as shares, is that price discovery occurs on a daily basis. That is, market participants (investors) often buy and sell stocks. As such, the current price of an investment reflects all publicly available information and the market’s views. It is a very transparent process. This gives investors comfort about what their investments are worth and consequently, how they are performing.

However, many alternative assets are not listed assets e.g. shares in an unlisted company (i.e. private equity) or a large infrastructure project. As such industry super funds must periodically engage valuers to revalue these assets.

Prior to starting ProSolution, I used to work for a Big 4 accounting firm preparing business valuations. I know all too well that

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> It is not unrealistic to expect your super returns to be over 20% for the financial year ended June 2021. Of course, this is a great outcome in what has been a tumultuous year. However, I would like to highlight some important observations and considerations.

And the 2021 winner is…
The table below sets out investment returns for the largest 8 industry funds based on a Balanced investment option (data from Lonsec). The table is sorted by 1-year returns, highest to lowest for the financial year ended June 2021. Hostplus achieved the highest return. However, AustralianSuper is the best performing fund over 3, 5, 7 and 10 years as highlighted.


I have selected the relevant pre-mixed investment option that has between 60% and 76% of assets invested in growth assets e.g. shares. This is defined as a Balanced asset allocation. You will note however that some super funds don’t use the Balanced description – some call it Growth or Core and so on. This highlights that it is important to not rely solely on an investment option’s name. Instead it is important to examine the actual asset allocation of the option you are considering.

This list of top 10 super funds includes all industry and retail funds (my list above only compared the 8 largest industry funds).

Click here to view a similar comparison for a Growth investment option.

Often, it’s impossible to understand how your money is invested
Of course, it is basic common sense to make sure that you always understand how your money is invested. However, that can be challenging with some industry funds. Most people assume their money is invested in share and bond markets. However, some industry super funds invest a large amount of your balance in “alternative” investments.

Alternative investments can include almost any type of investment that cannot be classified as shares, bonds, property or cash. Alternative investments include things such as infrastructure, construction and private credit, hedge funds, private equity, currency, commodities and so on. Industry super funds do not have to disclose any detail regarding these investments. In fact, any information is often value vague so it’s impossible to assess the underlying risk.

The chart below (data from Lonsec) highlights that the amount each industry funds allocates to alternative assets. This ranges from 5% (UniSuper) to 33% (Hostplus).


Risks with alternative assets
The advantage of listed assets, such as shares, is that price discovery occurs on a daily basis. That is, market participants (investors) often buy and sell stocks. As such, the current price of an investment reflects all publicly available information and the market’s views. It is a very transparent process. This gives investors comfort about what their investments are worth and consequently, how they are performing.

However, many alternative assets are not listed assets e.g. shares in an unlisted company (i.e. private equity) or a large infrastructure project. As such industry super funds must periodically engage valuers to revalue these assets.

Prior to starting ProSolution, I used to work for a Big 4 accounting firm preparing business valuations. I know all too well that

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss e7aeb527-649b-4c62-bfad-be5b29a41fdb Wed, 28 Jul 2021 08:30:00 +1000 1288 investopoly,wemyss,rules of the lending game,prosolution private clients,industry super funds,superannuation,super,super funds,super contributions,2021 super returns,top industry super funds, 1 172 false How you can use mean reversion to drive investment returns How you can use mean reversion to drive investment returns One of the challenges that many investors face is deciding what to invest in, how much and when. There are three methodologies that you can employ to help make this decision, but only two are supported by evidence.

What is mean reversion?
Mean reversion is a financial theory that suggests a period of above average returns is often followed by a period of below average returns, such that the average return over both periods is close to an asset class’ long term mean (or average) return.

Many academics have studied mean reversion and concluded it is an observable and repeatable trend in financial markets.

Mean reversion makes sense. It is unlikely that an asset class can generated above average returns for an unlimited period of time. For example, the S&P500 index (US market) has returned over 15% p.a. over the past 12 years. Its long term mean return is close to 10% p.a. Therefore, the probability of it delivering that return again over the next 10 years (thereby generating a return over 15% p.a. over a 20-year period) is very low. In fact, modelling suggests the probability of that occurring is less than 1%.

Examples of how perspective & mean reversion helps with investment decisions
I recall that towards the end of 2011, the AUD/USD exchange rate was close to parity (i.e. $AUD1 = $USD1). This meant that it was a good time to invest in the US market (because Australian dollars was more valuable). However, in the 10 years ended December 2011, the S&P500 index had delivered a return of close to zero. As such, an investor would have been excused for discounting such an investment opportunity, because why would you invest in a market that had delivered a zero return over the past 10 years!? Sure, the exchange rate was favourable, but that alone doesn’t validate the investment.

Since the end of 2011, the index has delivered a return over circa 14% p.a. and the Australian currency has fallen 30% (relative to the US), resulting in a total return of circa 18% p.a. Mean reversion together with a low-cost index fund have done most of the heavy lifting.

Perhaps the most obvious market at the moment that is likely to benefit from mean reversion is the investment-grade apartment market. As I wrote in this blog last year, investment-grade apartments (in Melbourne in particular) have delivered very little capital growth over the past 10 years. If the trend of mean reversion repeats itself, and it will, it is very likely that we are approaching an 8-10 year period double-digit capital growth. No one knows when the growth period will begin. But 4 to 5 decades of evidence tells us it will begin eventually.

Of course, it’s difficult to invest when recent returns have been poor
We are all wiser with hindsight. Looking back at my 2011 US share market investment example above, it seems like a no brainer today. However, at the time, it wasn’t. Its counter-intuitive to invest in markets that haven’t performed in recent years. It often feels less risky to invest opportunities that are currently most popular i.e. follow the herd. But it’s not. Astute investing requires discipline and courage.

It’s much easier to pick medium-term (or longer) trends
I wrote last week that it’s very tempting to focus on investing opportunities that promise quick returns. However, as the illustration below highlights, it is a highly speculative approach. A far superior approach is to i

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> One of the challenges that many investors face is deciding what to invest in, how much and when. There are three methodologies that you can employ to help make this decision, but only two are supported by evidence.

What is mean reversion?
Mean reversion is a financial theory that suggests a period of above average returns is often followed by a period of below average returns, such that the average return over both periods is close to an asset class’ long term mean (or average) return.

Many academics have studied mean reversion and concluded it is an observable and repeatable trend in financial markets.

Mean reversion makes sense. It is unlikely that an asset class can generated above average returns for an unlimited period of time. For example, the S&P500 index (US market) has returned over 15% p.a. over the past 12 years. Its long term mean return is close to 10% p.a. Therefore, the probability of it delivering that return again over the next 10 years (thereby generating a return over 15% p.a. over a 20-year period) is very low. In fact, modelling suggests the probability of that occurring is less than 1%.

Examples of how perspective & mean reversion helps with investment decisions
I recall that towards the end of 2011, the AUD/USD exchange rate was close to parity (i.e. $AUD1 = $USD1). This meant that it was a good time to invest in the US market (because Australian dollars was more valuable). However, in the 10 years ended December 2011, the S&P500 index had delivered a return of close to zero. As such, an investor would have been excused for discounting such an investment opportunity, because why would you invest in a market that had delivered a zero return over the past 10 years!? Sure, the exchange rate was favourable, but that alone doesn’t validate the investment.

Since the end of 2011, the index has delivered a return over circa 14% p.a. and the Australian currency has fallen 30% (relative to the US), resulting in a total return of circa 18% p.a. Mean reversion together with a low-cost index fund have done most of the heavy lifting.

Perhaps the most obvious market at the moment that is likely to benefit from mean reversion is the investment-grade apartment market. As I wrote in this blog last year, investment-grade apartments (in Melbourne in particular) have delivered very little capital growth over the past 10 years. If the trend of mean reversion repeats itself, and it will, it is very likely that we are approaching an 8-10 year period double-digit capital growth. No one knows when the growth period will begin. But 4 to 5 decades of evidence tells us it will begin eventually.

Of course, it’s difficult to invest when recent returns have been poor
We are all wiser with hindsight. Looking back at my 2011 US share market investment example above, it seems like a no brainer today. However, at the time, it wasn’t. Its counter-intuitive to invest in markets that haven’t performed in recent years. It often feels less risky to invest opportunities that are currently most popular i.e. follow the herd. But it’s not. Astute investing requires discipline and courage.

It’s much easier to pick medium-term (or longer) trends
I wrote last week that it’s very tempting to focus on investing opportunities that promise quick returns. However, as the illustration below highlights, it is a highly speculative approach. A far superior approach is to i

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 1d7cf416-bdbf-4c87-bc36-3666e17e5a7b Wed, 21 Jul 2021 08:30:00 +1000 765 investopoly,wemyss,rules of the lending game,financial advice,property investing,share market,share investing,mean reversion,speculation 1 171 false When to not invest: 5 questions to ask When to not invest: 5 questions to ask There are a number of factors that I consider when contemplating an investment on behalf of my clients or for me, personally.

I think it’s very important to consider a vast array of investment opportunities (or appoint an advisor to do it on your behalf). But it is even more important to discount most of them. Being diligent, setting a high bar and having the discipline to stick to sound fundamentals is critical for success.

This blog sets out the important factors that I always consider.

Will it materially improve your financial position 10 years from now?
It is often tempting to invest in ideas or opportunities that may promise to provide quick investment returns. Doing so appeals to our desire for instant gratification (reward). One of my favourite quotes is from Howard Schultz (billionaire and founder of Starbucks); “short term profit rarely creates long term value”. It’s very true.

A quick profit is nice, but it’s not the solution to building long-term wealth, unless you can consistently pick the next short term opportunity. But that is impossible to do. The problem is these ‘quick profit’ opportunities tend to be inherently risky (so many don’t work out well) and provide a one-time return only.

Instead, you are much better off to invest in assets that provide predictable returns over very long periods of time. Investing in an asset that provides an average return of 7% p.a. over the next 30 years will magnify its value by 7.6 times.

Asking yourself whether the investment you are considering will materially improve your financial position in 10 years’ time, forces you to think long-term. It helps you avoid the shiny objects (i.e. opportunities that trick you into believing they’ll deliver quick profits).

Ironically, the older we become, the easier we find it to make long-term decisions. Or maybe we just get more comfortable with delayed gratification. Either way, it requires discipline and patience.

Do you understand what’s driving the expected returns?
Don’t invest in anything you don’t understand.

You need to understand how the investment will work. How will the returns be generated? It must make sense.

For example, if you are investing in a property in a blue-chip and highly sort after location, it is easy to understand how that property will be worth a lot more in 30 years from now. How much more is uncertain, of course. But it stands to reason that its likely to outperform the “average” property.

However, for example, this is my problem with Bitcoin. I understand what it “could” be used for. I understand the advantages of a decentralised currency that offers privacy (anonymity). But the reality is that the vast majority of people currently buying Bitcoin are doing so for pure speculative purposes. Therefore, the only way I can make a return is if it attracts an increasing number of speculators. And that feels very risky to me. I invest. I do not speculate.

All fundamentally sound investments can be explained in simple terms using basic logic. It’s important that you understand this logic. If you are not able to do that, don’t invest.

Where is the evidence?
There is no need to throw darts at a dartboard. There are plenty of investment opportunities (asset classes and investment methodologies) that offer good long-term returns of 8-10% p.a., which are supported by an overwhelming body of evidence.

Therefore, when contemplating an investment, ask yourself where is the evidence that this is going to work. The fact is that such evide

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> There are a number of factors that I consider when contemplating an investment on behalf of my clients or for me, personally.

I think it’s very important to consider a vast array of investment opportunities (or appoint an advisor to do it on your behalf). But it is even more important to discount most of them. Being diligent, setting a high bar and having the discipline to stick to sound fundamentals is critical for success.

This blog sets out the important factors that I always consider.

Will it materially improve your financial position 10 years from now?
It is often tempting to invest in ideas or opportunities that may promise to provide quick investment returns. Doing so appeals to our desire for instant gratification (reward). One of my favourite quotes is from Howard Schultz (billionaire and founder of Starbucks); “short term profit rarely creates long term value”. It’s very true.

A quick profit is nice, but it’s not the solution to building long-term wealth, unless you can consistently pick the next short term opportunity. But that is impossible to do. The problem is these ‘quick profit’ opportunities tend to be inherently risky (so many don’t work out well) and provide a one-time return only.

Instead, you are much better off to invest in assets that provide predictable returns over very long periods of time. Investing in an asset that provides an average return of 7% p.a. over the next 30 years will magnify its value by 7.6 times.

Asking yourself whether the investment you are considering will materially improve your financial position in 10 years’ time, forces you to think long-term. It helps you avoid the shiny objects (i.e. opportunities that trick you into believing they’ll deliver quick profits).

Ironically, the older we become, the easier we find it to make long-term decisions. Or maybe we just get more comfortable with delayed gratification. Either way, it requires discipline and patience.

Do you understand what’s driving the expected returns?
Don’t invest in anything you don’t understand.

You need to understand how the investment will work. How will the returns be generated? It must make sense.

For example, if you are investing in a property in a blue-chip and highly sort after location, it is easy to understand how that property will be worth a lot more in 30 years from now. How much more is uncertain, of course. But it stands to reason that its likely to outperform the “average” property.

However, for example, this is my problem with Bitcoin. I understand what it “could” be used for. I understand the advantages of a decentralised currency that offers privacy (anonymity). But the reality is that the vast majority of people currently buying Bitcoin are doing so for pure speculative purposes. Therefore, the only way I can make a return is if it attracts an increasing number of speculators. And that feels very risky to me. I invest. I do not speculate.

All fundamentally sound investments can be explained in simple terms using basic logic. It’s important that you understand this logic. If you are not able to do that, don’t invest.

Where is the evidence?
There is no need to throw darts at a dartboard. There are plenty of investment opportunities (asset classes and investment methodologies) that offer good long-term returns of 8-10% p.a., which are supported by an overwhelming body of evidence.

Therefore, when contemplating an investment, ask yourself where is the evidence that this is going to work. The fact is that such evide

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss a2387bfa-1f7b-4809-a3ff-e94ea3068ae2 Wed, 14 Jul 2021 08:00:00 +1000 1003 investopoly,wemyss,rules of the lending game,financial advice,gearing,borrowing to invest,property investing 1 170 false Are investment returns that important? Are investment returns that important? Last week a prospective client asked me a very good question. They asked whether I have data that shows what investment returns my clients have generated. Whilst this sounds like a logical question, my response was that not only did I not have this data[1], but it also wouldn’t necessarily be that useful. The reason is that investment returns are highly dependent on a client’s stage of life, their risk profile, the quantum of their investable income, their starting financial position and so on. Unless all those factors are identical to this prospective client, the returns are not relevant.

But the question got me thinking; how important are investment returns anyway?

Short term investment returns don’t give you the full story
If I told you that my clients enjoyed a 100% return over the past 12 months, would you be impressed? Of course, no one’s going to be upset with that return but it tells me nothing about:
1. The risk that I took to achieve that return. High returns are almost impossible to achieve without taking high risk; and
2. Whether that return is sustainable. The laws of compounding growth tell us that it’s more powerful to consistently generate a sustainable return (e.g. 8% p.a.) over many decades. That should be your goal.

Returns become more important over long periods of time
It is very possible that when I start working with a client, in the short-run, they might be financially worse off. I have two examples to demonstrate this.

The first example is when I advise them to invest in property. In that first year they pay for a lot of large expenses such as stamp duty and buyers’ agents fees. This diminishes their net asset position.

The second example occurred last year when we had actively reduced exposure to the seemingly overvalued US tech sector prior to Covid. As we know, the tech sector was the greatest beneficiary of Covid during 2020. Consequently, our portfolios under-performed over the year to December 2020. However, based on initial investigations, it appears our portfolios have more than made up for that under-performance over the year ended June 2021 (being underweight tech has served us very well to date in calendar year 2021).

The lesson these two examples demonstrate is that sometimes short term returns suffer in the pursuit of maximising long-term returns. This is acceptable, unavoidable and necessary.

I can’t control markets or returns
I can’t control investment returns, especially in the short-term. No one can. In the short term, markets can be irrational, unpredictable and highly volatile. No one in the world has developed a model to reliably predict short-term returns with any meaningful consistency.

The factors that I can control (on behalf of my clients) include investment fees, the methodology we employ (i.e. whether its robust, tested and evidenced-based), the investment strategy/plan that we formulate, asset allocation and the quality of the investment. In the long run, all these factors will be responsible for delivering investment returns.

To use an analogy, a personal trainer doesn’t have any control over the weight her client loses in the short term. All she can control is how much her client exercises, the meal plan that her client follows and other environmental factors. The weight her client loses is merely a consequence of her client’s behaviours. But if her client follows her advice consistently over many months and years, the results become more predictable.

In fact, the value of advice has little to do with investment returns
This

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Last week a prospective client asked me a very good question. They asked whether I have data that shows what investment returns my clients have generated. Whilst this sounds like a logical question, my response was that not only did I not have this data[1], but it also wouldn’t necessarily be that useful. The reason is that investment returns are highly dependent on a client’s stage of life, their risk profile, the quantum of their investable income, their starting financial position and so on. Unless all those factors are identical to this prospective client, the returns are not relevant.

But the question got me thinking; how important are investment returns anyway?

Short term investment returns don’t give you the full story
If I told you that my clients enjoyed a 100% return over the past 12 months, would you be impressed? Of course, no one’s going to be upset with that return but it tells me nothing about:
1. The risk that I took to achieve that return. High returns are almost impossible to achieve without taking high risk; and
2. Whether that return is sustainable. The laws of compounding growth tell us that it’s more powerful to consistently generate a sustainable return (e.g. 8% p.a.) over many decades. That should be your goal.

Returns become more important over long periods of time
It is very possible that when I start working with a client, in the short-run, they might be financially worse off. I have two examples to demonstrate this.

The first example is when I advise them to invest in property. In that first year they pay for a lot of large expenses such as stamp duty and buyers’ agents fees. This diminishes their net asset position.

The second example occurred last year when we had actively reduced exposure to the seemingly overvalued US tech sector prior to Covid. As we know, the tech sector was the greatest beneficiary of Covid during 2020. Consequently, our portfolios under-performed over the year to December 2020. However, based on initial investigations, it appears our portfolios have more than made up for that under-performance over the year ended June 2021 (being underweight tech has served us very well to date in calendar year 2021).

The lesson these two examples demonstrate is that sometimes short term returns suffer in the pursuit of maximising long-term returns. This is acceptable, unavoidable and necessary.

I can’t control markets or returns
I can’t control investment returns, especially in the short-term. No one can. In the short term, markets can be irrational, unpredictable and highly volatile. No one in the world has developed a model to reliably predict short-term returns with any meaningful consistency.

The factors that I can control (on behalf of my clients) include investment fees, the methodology we employ (i.e. whether its robust, tested and evidenced-based), the investment strategy/plan that we formulate, asset allocation and the quality of the investment. In the long run, all these factors will be responsible for delivering investment returns.

To use an analogy, a personal trainer doesn’t have any control over the weight her client loses in the short term. All she can control is how much her client exercises, the meal plan that her client follows and other environmental factors. The weight her client loses is merely a consequence of her client’s behaviours. But if her client follows her advice consistently over many months and years, the results become more predictable.

In fact, the value of advice has little to do with investment returns
This

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 853b122a-eb69-4442-944f-18c1acda61a9 Wed, 07 Jul 2021 08:00:00 +1000 1031 investopoly,wemyss,rules of the lending game,prosolution private clients,investment returns,financial advisor,value of advice,financial advice,advice fees 1 169 false Investing in property in the outer suburbs - should you do it? Investing in property in the outer suburbs - should you do it? Some buyers’ agents promote investing in more affordable locations. I can understand why some investors might be attracted to follow their advice. But it’s not until you delve into the theory and evidence that it becomes blatantly obvious that such investments have a high probability of under-performing.

Here’s an example I saw on social media
I noticed a buyers’ agent advertise that he bought this "north Brisbane" property for a client for $530,000. He estimated that the rental income would be $480 per week. The land size is large. It’s on 1006 sqm, which apparently has subdivision upside. Sounds good?

Firstly, a bit of research revealed that this property is located 17kms north of Toowoomba, not Brisbane. In fact, it’s over 140 kms from the Brisbane CBD.

Secondly, it’s not going to work as an investment for the following reasons:
§ Toowoomba has a population of only just over 120,000 people. It’s a very small city with plenty of vacant land surrounding it. The property is located in a new estate surrounded by literally an endless supply of vacant land.
§ The land was purchased for $90,500 in March 2007 and a 5-bedroom home was constructed on it. Whilst the land may have appreciated in value since 2007, the value of the dwelling has (and continues to) depreciated. This is evidenced by the past growth rate. The completed property first sold in September 2013 for $445,000. Therefore, over the past 7 years the overall value of the property has appreciated by a mere 2.5% p.a. (inflation was 1.7% p.a. over that period).
§ Apparently, the property will rent for $480 per week. That equates to a gross yield of 4.7% p.a., which is high by capital city standards. But it’s indicative of the fact that the property is mostly building value, not land value. Most importantly, a 14-year-old, 5-bedroom house will start to require an increasing amount of ongoing maintenance, which will diminish the property’s net income.

At first glance this asset might appear to be a good investment because of its affordability i.e. low price compared to capital cities and high rental income. However, it is very clear that it doesn’t have the attributes to drive any meaningful capital growth. The rental income will diminish over time unless capital improvements are made. This is not an “investment”.

But there are lots of similar examples
I picked the above example randomly (in fact when I picked it, I thought it was in Brisbane, not Toowoomba). But I come across many similar examples.

For example, for almost 20 years I have heard various buyers’ agents suggest that Melbourne’s suburb, Frankston is the next growth suburb. Of course, whilst some properties in Frankston may have performed well (as there’s always exceptions that prove the rule), investors have been better rewarded by investing in blue-chip suburbs over the last 20 years.

Attractions of investing in outer-suburb locations
I’d imagine that the price point is the big attraction for some investors. That is, houses are substantially cheaper. That means that people can spread their eggs across multiple baskets i.e. invest in multiple properties. It also means that people that cannot afford a house in a capital city, can still “invest” in property.

Secondly, because properties in outer locations tend to have a lower land value component (land is cheaper than the building), rental yields are higher. This makes property more affordable to hold, particularly while interest rates are so low. Quite often, in today’s market, the property’s rental income will cover all expenses and loan interest.

Investment weakn

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Some buyers’ agents promote investing in more affordable locations. I can understand why some investors might be attracted to follow their advice. But it’s not until you delve into the theory and evidence that it becomes blatantly obvious that such investments have a high probability of under-performing.

Here’s an example I saw on social media
I noticed a buyers’ agent advertise that he bought this "north Brisbane" property for a client for $530,000. He estimated that the rental income would be $480 per week. The land size is large. It’s on 1006 sqm, which apparently has subdivision upside. Sounds good?

Firstly, a bit of research revealed that this property is located 17kms north of Toowoomba, not Brisbane. In fact, it’s over 140 kms from the Brisbane CBD.

Secondly, it’s not going to work as an investment for the following reasons:
§ Toowoomba has a population of only just over 120,000 people. It’s a very small city with plenty of vacant land surrounding it. The property is located in a new estate surrounded by literally an endless supply of vacant land.
§ The land was purchased for $90,500 in March 2007 and a 5-bedroom home was constructed on it. Whilst the land may have appreciated in value since 2007, the value of the dwelling has (and continues to) depreciated. This is evidenced by the past growth rate. The completed property first sold in September 2013 for $445,000. Therefore, over the past 7 years the overall value of the property has appreciated by a mere 2.5% p.a. (inflation was 1.7% p.a. over that period).
§ Apparently, the property will rent for $480 per week. That equates to a gross yield of 4.7% p.a., which is high by capital city standards. But it’s indicative of the fact that the property is mostly building value, not land value. Most importantly, a 14-year-old, 5-bedroom house will start to require an increasing amount of ongoing maintenance, which will diminish the property’s net income.

At first glance this asset might appear to be a good investment because of its affordability i.e. low price compared to capital cities and high rental income. However, it is very clear that it doesn’t have the attributes to drive any meaningful capital growth. The rental income will diminish over time unless capital improvements are made. This is not an “investment”.

But there are lots of similar examples
I picked the above example randomly (in fact when I picked it, I thought it was in Brisbane, not Toowoomba). But I come across many similar examples.

For example, for almost 20 years I have heard various buyers’ agents suggest that Melbourne’s suburb, Frankston is the next growth suburb. Of course, whilst some properties in Frankston may have performed well (as there’s always exceptions that prove the rule), investors have been better rewarded by investing in blue-chip suburbs over the last 20 years.

Attractions of investing in outer-suburb locations
I’d imagine that the price point is the big attraction for some investors. That is, houses are substantially cheaper. That means that people can spread their eggs across multiple baskets i.e. invest in multiple properties. It also means that people that cannot afford a house in a capital city, can still “invest” in property.

Secondly, because properties in outer locations tend to have a lower land value component (land is cheaper than the building), rental yields are higher. This makes property more affordable to hold, particularly while interest rates are so low. Quite often, in today’s market, the property’s rental income will cover all expenses and loan interest.

Investment weakn

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 2082d42d-5522-412e-91a3-6000bfff1f3e Wed, 30 Jun 2021 08:00:00 +1000 1132 investopoly,wemyss,rules of the lending game,prosolution,property investing,property demand,property prices,property supply,invest in property,outer suburbs,rental yield, 1 168 false How to ensure your superannuation will be paid to your intended beneficiary How to ensure your superannuation will be paid to your intended beneficiary Twenty-three-year-old, Ashleigh Petrie nominated her mother as the sole beneficiary of her super. However, Ashleigh’s 63-year-old fiancé was successful in claiming her full super balance after she died in a car accident. Ashleigh was in a relationship with her fiancé, Rodney Higgins for only 7 months (living together for four of them). This story highlights the pitfalls and limitations to super fund death benefit nominations.

Superannuation doesn’t form part of your will
A super fund is a type of trust. That means that no one has entitlement to any super funds until the trustee makes an election to distribute monies i.e. pay a super benefit. As such, superannuation does not (initially) form part of your estate and therefore is not covered by your Will.

The trustee of your super fund must decide who is entitled to your super balance including any life insurance benefits (if the policy is held inside super).

Different types of nominations
There are two types of death benefit nominations:

Binding nominations
As the name suggests, trustees are bound to follow the superannuant’s instructions as long as they comply with the super laws (SIS Act). Binding nominations can either be ‘lapsing’ or ‘non-lapsing’. Lapsing nominations are valid for up to three years but can be changed at any time. However, a lapsing nomination cannot be updated if the superannuant loses capacity (although their attorney may be able to update it).

Non-lapsing nominations do not need to be updated each year and therefor can offer a greater level of certainty for succession planning.

Non-binding nominations
Non-binding nominations provide guidance to the trustee as to how to pay a death benefit. However, ultimately, the trustee still has discretion as to who to pay a benefit to.

Reversionary nominations
If a person’s super is in pension phase, some super funds allow reversionary nominations. A reversionary nomination instructs the fund to continue paying a super pension to their nominated beneficiary such as their surviving spouse. Reversionary nominations offer few financial planning advantages.

Who can you nominate?
According to the super laws (SIS Act), super must be paid to your dependent/s. If you do not have any dependents, your super must then be paid to your Personal Legal Representative which is the executor (or administrator if you don’t have a will) of your estate. That is, super will then form part of the assets of your estate and will be dealt with according to your Will.

The super laws define a dependent to include (1) spouse including de facto relationships and same-sexual partners, (2) children of any age including step and/or adopted children or anyone deemed to be a child of the member under family law and/or (3) a person that was in an interdependent relationship with the member (which involves cohabitating with the member and one or both persons provide financial and domestic support).

If the superannuant doesn’t have any dependents, the super benefit must be paid into the deceased’s estate (Personal Legal Representative) and they will be distributed according to their Will. If they don’t have a will, then benefits will be distributed according to the succession laws in that jurisdiction.

Who should you nominate?
A super benefit paid to a financial dependent will be received completely tax-free. It is important to note that a financial dependant must meet the Income Tax A

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Twenty-three-year-old, Ashleigh Petrie nominated her mother as the sole beneficiary of her super. However, Ashleigh’s 63-year-old fiancé was successful in claiming her full super balance after she died in a car accident. Ashleigh was in a relationship with her fiancé, Rodney Higgins for only 7 months (living together for four of them). This story highlights the pitfalls and limitations to super fund death benefit nominations.

Superannuation doesn’t form part of your will
A super fund is a type of trust. That means that no one has entitlement to any super funds until the trustee makes an election to distribute monies i.e. pay a super benefit. As such, superannuation does not (initially) form part of your estate and therefore is not covered by your Will.

The trustee of your super fund must decide who is entitled to your super balance including any life insurance benefits (if the policy is held inside super).

Different types of nominations
There are two types of death benefit nominations:

Binding nominations
As the name suggests, trustees are bound to follow the superannuant’s instructions as long as they comply with the super laws (SIS Act). Binding nominations can either be ‘lapsing’ or ‘non-lapsing’. Lapsing nominations are valid for up to three years but can be changed at any time. However, a lapsing nomination cannot be updated if the superannuant loses capacity (although their attorney may be able to update it).

Non-lapsing nominations do not need to be updated each year and therefor can offer a greater level of certainty for succession planning.

Non-binding nominations
Non-binding nominations provide guidance to the trustee as to how to pay a death benefit. However, ultimately, the trustee still has discretion as to who to pay a benefit to.

Reversionary nominations
If a person’s super is in pension phase, some super funds allow reversionary nominations. A reversionary nomination instructs the fund to continue paying a super pension to their nominated beneficiary such as their surviving spouse. Reversionary nominations offer few financial planning advantages.

Who can you nominate?
According to the super laws (SIS Act), super must be paid to your dependent/s. If you do not have any dependents, your super must then be paid to your Personal Legal Representative which is the executor (or administrator if you don’t have a will) of your estate. That is, super will then form part of the assets of your estate and will be dealt with according to your Will.

The super laws define a dependent to include (1) spouse including de facto relationships and same-sexual partners, (2) children of any age including step and/or adopted children or anyone deemed to be a child of the member under family law and/or (3) a person that was in an interdependent relationship with the member (which involves cohabitating with the member and one or both persons provide financial and domestic support).

If the superannuant doesn’t have any dependents, the super benefit must be paid into the deceased’s estate (Personal Legal Representative) and they will be distributed according to their Will. If they don’t have a will, then benefits will be distributed according to the succession laws in that jurisdiction.

Who should you nominate?
A super benefit paid to a financial dependent will be received completely tax-free. It is important to note that a financial dependant must meet the Income Tax A

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This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 7779b8ca-6dc3-46ed-890b-5f84664bb96d Wed, 23 Jun 2021 08:00:00 +1000 956 investopoly,wemyss,rules of the lending game,prosolution private clients,industry super funds,superannuation,super,super funds,super contributions,death benefit nomination,will,estate plan 1 167 false Don't buy property in this market... Don't buy property in this market... It is true that buying a property in any market will generate a lot of wealth as long as you (1) buy the right property and (2) hold it for a few decades. But it is also true that you do not need to rush into the market at the risk of substantially overpaying.

My wife and I planned to buy an investment property this year so we have been monitoring the property market a bit closer than usual this year. Of course, we expect to pay fair market value for a high-quality asset (quality assets rarely sell for less). But we have no interest in overpaying. We are happy to wait on the sidelines until we are able to buy an investment-grade property for a fair price.

What we have noticed this year is that overpaying is almost the only way to successfully purchase a property – sometimes by more than 10%! I wanted to discuss (speculate) why this might be happening and counsel property buyers to be patient and diligent.

Is demand greater than supply?
It was my initial hypothesis that a lack of supply was responsible for driving property prices higher. That is, that the volume of property buyers exceeds the volume of properties available for sale.

The graphic below include property listing charts for a selection of locations from the beginning of 2010 to date. You will note that property listings in some locations are well below trend, particularly coastal regions. This supports my theory that tight supply is pushing prices higher. However, as you will observe, there are some locations where listing volumes appear to be normal.


Of course, we must remind ourselves that listing volumes (supply) is only one half of the equation. Demand is the other half. It could be that whilst supply is normal, demand could be above average.

Demand is very high
Probably the best indicator for demand is the volume of new mortgages, as depicted in the chart below from the ABS.


The average monthly volume of home loans between 2015 and 2020 was $13.4 billion. This year, the average monthly volume has increased by a whopping 66% to $22.2 billion. By comparison, investor loans have increased by just over 9%. I think we can conclude that demand for property is substantially above average.

As such, whilst supply (listings) is normal in some locations, there’s not enough property for sale to satisfy the strong level of demand and as a result, prices are rising.

Why is demand so high?
Many Australians, particularly higher income earners, are spending less and saving more due to the impact of Covid. This is reflected in the household savings ratio which is at the highest level since the data series began in 1973! This relative improvement in household financial strength might be encouraging more homeowners to spend more money on their home e.g. upgrade or renovate.

Historically lo

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This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> It is true that buying a property in any market will generate a lot of wealth as long as you (1) buy the right property and (2) hold it for a few decades. But it is also true that you do not need to rush into the market at the risk of substantially overpaying.

My wife and I planned to buy an investment property this year so we have been monitoring the property market a bit closer than usual this year. Of course, we expect to pay fair market value for a high-quality asset (quality assets rarely sell for less). But we have no interest in overpaying. We are happy to wait on the sidelines until we are able to buy an investment-grade property for a fair price.

What we have noticed this year is that overpaying is almost the only way to successfully purchase a property – sometimes by more than 10%! I wanted to discuss (speculate) why this might be happening and counsel property buyers to be patient and diligent.

Is demand greater than supply?
It was my initial hypothesis that a lack of supply was responsible for driving property prices higher. That is, that the volume of property buyers exceeds the volume of properties available for sale.

The graphic below include property listing charts for a selection of locations from the beginning of 2010 to date. You will note that property listings in some locations are well below trend, particularly coastal regions. This supports my theory that tight supply is pushing prices higher. However, as you will observe, there are some locations where listing volumes appear to be normal.


Of course, we must remind ourselves that listing volumes (supply) is only one half of the equation. Demand is the other half. It could be that whilst supply is normal, demand could be above average.

Demand is very high
Probably the best indicator for demand is the volume of new mortgages, as depicted in the chart below from the ABS.


The average monthly volume of home loans between 2015 and 2020 was $13.4 billion. This year, the average monthly volume has increased by a whopping 66% to $22.2 billion. By comparison, investor loans have increased by just over 9%. I think we can conclude that demand for property is substantially above average.

As such, whilst supply (listings) is normal in some locations, there’s not enough property for sale to satisfy the strong level of demand and as a result, prices are rising.

Why is demand so high?
Many Australians, particularly higher income earners, are spending less and saving more due to the impact of Covid. This is reflected in the household savings ratio which is at the highest level since the data series began in 1973! This relative improvement in household financial strength might be encouraging more homeowners to spend more money on their home e.g. upgrade or renovate.

Historically lo

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss d45d71ff-b6fe-48a2-ba60-c18fefed115f Wed, 16 Jun 2021 08:00:00 +1000 872 investopoly,wemyss,rules of the lending game,prosolution,property investing,property demand,property prices,property supply,invest in property,property valuation 1 166 false Sophisticated borrowers to jump through fewer hoops to get a new loan Sophisticated borrowers to jump through fewer hoops to get a new loan The Corporations Act makes a distinction between wholesale and retail clients. It is assumed that wholesale clients have a sufficient level of financial literacy to self-assess the appropriateness and risks of various investment products and to protect this own interests. As such, there are fewer disclosure obligations (and lower compliance costs) for financial services businesses working with wholesale clients.

It is my contention that similar provisions should be available to banks and mortgage brokers. Often, the way you assess an application for a borrower with a net worth of $2,000 compared to a borrower with $20 million will vary. Making this distinction allow lenders to apply a more common sense approach. However, unfortunately, no such distinction exists. All borrowers are subject to the same rules, irrespective of their financial position and financial literacy.

Retail versus wholesale investor rules
The Corporations Act makes a distinction between wholesale and retail clients (or “sophisticated investors” if being offered bonds or direct shares). A wholesale client is someone that meets either of the below two tests:
1. Asset test – having a net worth of over $2.5 million; or
2. Income test – having a pre-tax income of at least $250,000 in each of the past two years.

The Act also includes other exemptions in addition to the above including professional investor test, product value test and small business test.

These asset and income hurdles were struck back in 1991 and are now vastly outdated. Adjusting for the impact of inflation, the income threshold should now be over $490,000 and asset value over $4.9 million.

Wholesale clients are assumed to be financially savvy enough to make informed decisions and are able to protect their own interests. In short, they can decide whether an investment is appropriate so there’s less onus on the provider or advisor. Also, there are fewer obligations (on financial advisors and product issuers) when dealing with wholesale clients such as there is no need to provide a Financial Services Guide, Statement of Advice, Product Disclosure Statements, etc.

Wholesale clients are often required to confirm their status by providing a certificate from a qualified accountant.

Responsible lending rules may not be changed as planned
In September last year, the government announced that it would seek to wind back some of the responsible lending rules which I discussed here. The main proposed change was to relax the obligation for the bank to verify how much you spend (and on what items) when applying for a loan.

The Bill passed the House of Representatives in March 2021 and is currently before the Senate. It is being opposed by the Australian Labor Party, the Australian Greens and some consumer groups. However, the government has reaffirmed its intention to push this legislation through. I understand that the Bill is scheduled for a second reading next week (16 June 2021). If this Bill doesn’t succeed, there’s an even greater need for sophisticated borrowers to be recognised.

Problems with a one-size-fits-all approach
A one-size-fits-all approach to assessing loans creates some perverse and frustrating outcomes. I share two c

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> The Corporations Act makes a distinction between wholesale and retail clients. It is assumed that wholesale clients have a sufficient level of financial literacy to self-assess the appropriateness and risks of various investment products and to protect this own interests. As such, there are fewer disclosure obligations (and lower compliance costs) for financial services businesses working with wholesale clients.

It is my contention that similar provisions should be available to banks and mortgage brokers. Often, the way you assess an application for a borrower with a net worth of $2,000 compared to a borrower with $20 million will vary. Making this distinction allow lenders to apply a more common sense approach. However, unfortunately, no such distinction exists. All borrowers are subject to the same rules, irrespective of their financial position and financial literacy.

Retail versus wholesale investor rules
The Corporations Act makes a distinction between wholesale and retail clients (or “sophisticated investors” if being offered bonds or direct shares). A wholesale client is someone that meets either of the below two tests:
1. Asset test – having a net worth of over $2.5 million; or
2. Income test – having a pre-tax income of at least $250,000 in each of the past two years.

The Act also includes other exemptions in addition to the above including professional investor test, product value test and small business test.

These asset and income hurdles were struck back in 1991 and are now vastly outdated. Adjusting for the impact of inflation, the income threshold should now be over $490,000 and asset value over $4.9 million.

Wholesale clients are assumed to be financially savvy enough to make informed decisions and are able to protect their own interests. In short, they can decide whether an investment is appropriate so there’s less onus on the provider or advisor. Also, there are fewer obligations (on financial advisors and product issuers) when dealing with wholesale clients such as there is no need to provide a Financial Services Guide, Statement of Advice, Product Disclosure Statements, etc.

Wholesale clients are often required to confirm their status by providing a certificate from a qualified accountant.

Responsible lending rules may not be changed as planned
In September last year, the government announced that it would seek to wind back some of the responsible lending rules which I discussed here. The main proposed change was to relax the obligation for the bank to verify how much you spend (and on what items) when applying for a loan.

The Bill passed the House of Representatives in March 2021 and is currently before the Senate. It is being opposed by the Australian Labor Party, the Australian Greens and some consumer groups. However, the government has reaffirmed its intention to push this legislation through. I understand that the Bill is scheduled for a second reading next week (16 June 2021). If this Bill doesn’t succeed, there’s an even greater need for sophisticated borrowers to be recognised.

Problems with a one-size-fits-all approach
A one-size-fits-all approach to assessing loans creates some perverse and frustrating outcomes. I share two c

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 9005066f-279a-4be9-bdd3-28b8362bb5ba Wed, 09 Jun 2021 08:00:00 +1000 911 investopoly,wemyss,rules of the lending game,prosolution,borrowing capacity,borrowing to invest,borrowings,responsible lending, 1 165 false Warning: 3 reasons why negative gearing is in jeopardy Warning: 3 reasons why negative gearing is in jeopardy One of the Australian Labor Party’s (ALP) big election promises in the 2019 federal election was to abolish negative gearing. It would be logical to think that the ALP’s shock election loss in 2019 will serve as a warning for policy makers. That is, banning negative gearing is an unpopular policy. However, I would caution investors against assuming that negative gearing is here to stay.

What is negative gearing?
Negative gearing allows investors to offset property investment losses against other taxable income (such as employment income) to reduce their tax liabilities.

For example, Colin is employed as a lawyer and earns $200,000 pre-tax. Colin’s employer correctly deducts $64,700 of tax. If Colin borrows $1 million to purchase an investment property, he expects to receive approximately $14,000 of rental income after all expenses (management fees, insurance, maintenance, etc.). The bank will charge him approximately $35,000 p.a. in interest. Therefore, the property will lose approximately $21,000 p.a. ($14k less $35k).

Colin will be able to offset that loss against his employment income to reduce his total taxable income to $179,000 ($200k less $21k). This will reduce his annual tax liability to $54,900, which is a saving of $9,800 p.a. As such, the after-tax cost of the property is $11,200 p.a. ($21k less tax saving of $9.8k). This is called a negative gearing benefit.

Why do people negatively gear?
The only reason that you would negatively gear is that you anticipate that the property’s capital growth will eventually dwarf its income losses.

Continuing with Colin’s example above, let’s consider the projected outcome after 20 years. Let’s assume the property continues to lose $11,200 per year which equates to $224,000 in total over 20 years. This assumes the rental income and interest rate do not change for 20 years, which of course is highly unlikely, but for the sake of simplicity, lets continue. If Colin’s investment property appreciated in value by 7% p.a. on average, it will be worth over $3.8 million in 20 years. After capital gains tax, Colin would have accumulated almost $2.2 million of equity in return for losing $224,000 of income. Most would agree that this is a good financial outcome for Colin.

In short, investors use negative gearing on the expectation that the capital returns generated by an investment (often property), will substantially offset any after-tax income losses over time.

Why is negative gearing at risk?
There are three main reasons that I believe that tax benefits (savings) resulting from borrowing to invest in property will not be as substantial as they have been in the past. As such, I would counsel investors to not rely on negative gearing tax benefits when making investment decisions.

Reason 1: Government will probably limit negative gearing
The expansion of federal government debt to over $1 trillion dollars means the government must generate more revenue to service and eventually repay this debt. One way to do that is to grow the economy (GDP) which will generate more tax revenue, even if tax rates don’t change. Another way is to raise taxes or limit deductions.

Just over 11% of Australians invest in property (2.2 million people out of 19.8 million adults). However, only about 3.3% of Australians own 2 or more investment properties. Therefore, if the government limited negative gearing to say one property, fewer election votes would be at risk.

I think the more likely outcome would be to introduce a dollar value limit. For example, maybe negative gearing deductions could be limited to $20,000 per year. Any negative gearing losses that exceed $20,000 could be carried forward t

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> One of the Australian Labor Party’s (ALP) big election promises in the 2019 federal election was to abolish negative gearing. It would be logical to think that the ALP’s shock election loss in 2019 will serve as a warning for policy makers. That is, banning negative gearing is an unpopular policy. However, I would caution investors against assuming that negative gearing is here to stay.

What is negative gearing?
Negative gearing allows investors to offset property investment losses against other taxable income (such as employment income) to reduce their tax liabilities.

For example, Colin is employed as a lawyer and earns $200,000 pre-tax. Colin’s employer correctly deducts $64,700 of tax. If Colin borrows $1 million to purchase an investment property, he expects to receive approximately $14,000 of rental income after all expenses (management fees, insurance, maintenance, etc.). The bank will charge him approximately $35,000 p.a. in interest. Therefore, the property will lose approximately $21,000 p.a. ($14k less $35k).

Colin will be able to offset that loss against his employment income to reduce his total taxable income to $179,000 ($200k less $21k). This will reduce his annual tax liability to $54,900, which is a saving of $9,800 p.a. As such, the after-tax cost of the property is $11,200 p.a. ($21k less tax saving of $9.8k). This is called a negative gearing benefit.

Why do people negatively gear?
The only reason that you would negatively gear is that you anticipate that the property’s capital growth will eventually dwarf its income losses.

Continuing with Colin’s example above, let’s consider the projected outcome after 20 years. Let’s assume the property continues to lose $11,200 per year which equates to $224,000 in total over 20 years. This assumes the rental income and interest rate do not change for 20 years, which of course is highly unlikely, but for the sake of simplicity, lets continue. If Colin’s investment property appreciated in value by 7% p.a. on average, it will be worth over $3.8 million in 20 years. After capital gains tax, Colin would have accumulated almost $2.2 million of equity in return for losing $224,000 of income. Most would agree that this is a good financial outcome for Colin.

In short, investors use negative gearing on the expectation that the capital returns generated by an investment (often property), will substantially offset any after-tax income losses over time.

Why is negative gearing at risk?
There are three main reasons that I believe that tax benefits (savings) resulting from borrowing to invest in property will not be as substantial as they have been in the past. As such, I would counsel investors to not rely on negative gearing tax benefits when making investment decisions.

Reason 1: Government will probably limit negative gearing
The expansion of federal government debt to over $1 trillion dollars means the government must generate more revenue to service and eventually repay this debt. One way to do that is to grow the economy (GDP) which will generate more tax revenue, even if tax rates don’t change. Another way is to raise taxes or limit deductions.

Just over 11% of Australians invest in property (2.2 million people out of 19.8 million adults). However, only about 3.3% of Australians own 2 or more investment properties. Therefore, if the government limited negative gearing to say one property, fewer election votes would be at risk.

I think the more likely outcome would be to introduce a dollar value limit. For example, maybe negative gearing deductions could be limited to $20,000 per year. Any negative gearing losses that exceed $20,000 could be carried forward t

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 1cc71f96-d8c5-4fd3-9645-39e6e5ce4862 Wed, 02 Jun 2021 08:00:00 +1000 961 investopoly,wemyss,rules of the lending game,prosolution,property tax,negative gearing,tax saving,interest rates,save tax,tax, 1 164 false Active share investors failed to take advantage of last year's volatility Active share investors failed to take advantage of last year's volatility Active fund managers use their skill and experience to pick which stocks to invest in. An alternative to active investing is to invest in low-cost index funds. One criticism of index funds is that they blindly invest in a broad index which might not always make sense. Index funds participate in the highs and lows. This led me to consider how well actively managed funds did last year.

Last year’s share market opportunities
Between 1 January 2020 and mid-March, the international share index (MSCI World ex-Australia hedged to AUD) fell by approximately 20%. By the end of the 2020 calendar year, the international share index bounced back by around 40% (between mid-March and Dec 2020) to finish the full calendar year up by around 11%.

The Australian market didn’t fare as well, but its volatility was still high. The Australian share index (ASX300) fell by approximately 27% to mid-March and then bounced back by almost 33% between mid-March and the end of 2020 calendar year. It finished the 2020 calendar year in a minor loss position (down about 3%).

But this is only part of the story. The market’s reaction to Covid created some obvious long term investing opportunities for active investors as some sectors were punished a lot more than others. These include oil and gas, airlines, travel and tourism, real estate and banking.

Active fund managers and investors should outperform in a bear market
In a bull market, almost all stocks are rising so investing in a broad index should capture most of these returns. Logic would have us believe that a bear market probably creates opportunities for active investors. For example, at the heights of covid lockdowns last year, technology stocks were the best performers. But as the vaccines immerged, the sectors that were more severely punished began to recover strongly. As such, and admittedly, with the benefit of hindsight, an active manager could have been overweight tech for half of 2020 and then switched to the recovering sectors for the remaining half of the year. This approach would have outperformed the index.

Certainly, we are all wiser in hindsight, and perhaps it’s a little bit unfair to undertake this analysis. However, the point I am attempting to make is that if you pay an active manager higher fees, isn’t it reasonable to expect that they will outperform in such a volatile market?

How did active managers do last year?
US based index firm, S&P Dow Jones Indices prepares the Standard Poor's Index Versus Active (SPIVA) report every 6 months. It compares the investment performance generated by all active managers to the index, to calculate the proportion of active managers that failed to beat their relevant index. The table below summaries the results for the 2020 calendar year.



Country
Proportion of active managers that failed to beat the index in 2020
USA
60%
Australia
56%
Japan
54%
Europe
37%
Source: SPIVA report

Apart from Europe, more than half of active fund managers failed to beat the index in a year that presented a lot of opportunity to do so.

Longer term performance however is more compelling. Generally, over any 5 year period, approximately 75% to 80% of active fund managers fail to beat the index. And of the 20% to 25% of active managers that do beat the index, it’s not the same managers each year. In fact,

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Active fund managers use their skill and experience to pick which stocks to invest in. An alternative to active investing is to invest in low-cost index funds. One criticism of index funds is that they blindly invest in a broad index which might not always make sense. Index funds participate in the highs and lows. This led me to consider how well actively managed funds did last year.

Last year’s share market opportunities
Between 1 January 2020 and mid-March, the international share index (MSCI World ex-Australia hedged to AUD) fell by approximately 20%. By the end of the 2020 calendar year, the international share index bounced back by around 40% (between mid-March and Dec 2020) to finish the full calendar year up by around 11%.

The Australian market didn’t fare as well, but its volatility was still high. The Australian share index (ASX300) fell by approximately 27% to mid-March and then bounced back by almost 33% between mid-March and the end of 2020 calendar year. It finished the 2020 calendar year in a minor loss position (down about 3%).

But this is only part of the story. The market’s reaction to Covid created some obvious long term investing opportunities for active investors as some sectors were punished a lot more than others. These include oil and gas, airlines, travel and tourism, real estate and banking.

Active fund managers and investors should outperform in a bear market
In a bull market, almost all stocks are rising so investing in a broad index should capture most of these returns. Logic would have us believe that a bear market probably creates opportunities for active investors. For example, at the heights of covid lockdowns last year, technology stocks were the best performers. But as the vaccines immerged, the sectors that were more severely punished began to recover strongly. As such, and admittedly, with the benefit of hindsight, an active manager could have been overweight tech for half of 2020 and then switched to the recovering sectors for the remaining half of the year. This approach would have outperformed the index.

Certainly, we are all wiser in hindsight, and perhaps it’s a little bit unfair to undertake this analysis. However, the point I am attempting to make is that if you pay an active manager higher fees, isn’t it reasonable to expect that they will outperform in such a volatile market?

How did active managers do last year?
US based index firm, S&P Dow Jones Indices prepares the Standard Poor's Index Versus Active (SPIVA) report every 6 months. It compares the investment performance generated by all active managers to the index, to calculate the proportion of active managers that failed to beat their relevant index. The table below summaries the results for the 2020 calendar year.



Country
Proportion of active managers that failed to beat the index in 2020
USA
60%
Australia
56%
Japan
54%
Europe
37%
Source: SPIVA report

Apart from Europe, more than half of active fund managers failed to beat the index in a year that presented a lot of opportunity to do so.

Longer term performance however is more compelling. Generally, over any 5 year period, approximately 75% to 80% of active fund managers fail to beat the index. And of the 20% to 25% of active managers that do beat the index, it’s not the same managers each year. In fact,

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss a28a0498-ec55-441f-9e39-aaa244fdbfbf Wed, 26 May 2021 08:00:00 +1000 904 investopoly,wemyss,rules of the lending game,prosolution,share investing,index funds,active funds,index versus active,vanguard 1 163 false Pros and cons of buying property without a pre-approval Pros and cons of buying property without a pre-approval Many lenders are taking a number of weeks (sometimes months) to approve loans at the moment. These delays have been caused mainly by significantly higher mortgage application volumes and the operational disruption from onshoring back-office services due to Covid lockdowns in the Philippines and India.

As such, banks are prioritising applications for borrowers that have already purchased property and have a definitive settlement date to meet. Consequently, pre-approval applications are low priority and can take a long time to arrange. This blog discusses the pros and cons associated with buying a property without a loan pre-approval.

What is a mortgage pre-approval?
A pre-approval is a conditional loan approval. Typically, the main condition is that the borrower is able to offer a suitable property as security for the proposed loan. For example, a bank may approve a loan for $800,000 subject to the borrower buying an acceptable property that is valued by the bank at an amount of at least $1,000,000 (to keep the loan to value ratio at 80%). The only other condition might be that the borrower’s financial circumstances do not change. This is called an approval-in-principle (AIP) or pre-approval.

Arranging a written pre-approval with a bank (via a mortgage broker), gives borrowers a higher level of certainty that, if they go ahead and purchase a property, that the bank will ultimately unconditionally approve a loan to fund that property.

Pre-approvals do not attract any fees (they are free) and you are not obligated to use that lender or borrow the pre-approved amount.

What could go wrong even if you have a pre-approval?
Things can still go wrong even if you have a pre-approval.

Typically, the only material risk is that the bank values your new property below the purchase price. The bank will lend against the contract price or valuation, whichever is lower. If the property valuation is lower than purchase price, it will mean you won’t be able to borrow as much and you must contribute more cash (or additional property as security).

For example, if you buy a property for $1,000,000 and need to borrow 80% (or $800,000), and the property valuation comes back at $950,000, the bank will reduce your loan amount to 80% of that value, being $760,000. That means you must contribute another $40,000 of cash to be able to settle on the property.

The other risk is a change in circumstances (such as losing your job) occurring between when the pre-approval was issued and when the loan is ultimately formally approved. Of course, if your circumstances change before you have purchased a property, you should go back and speak to your bank or broker. If your circumstances change after you have purchased but prior to a loan being fully approved, that could be problematic, although this is very, very rare.

Are low valuations common?
No. By definition, the value of a property is what the market is prepared to pay for it. Therefore, if you have purchased a property in a standard open-market sale, that is usually strong evidence of its current market value.

However, if there are not enough sales of comparable properties to support your purchase price, that is when a low-valuation becomes a risk.

It is possible to challenge a bank valuation by providing additional evidence, but this usually has a low success rate for a variety of reasons. In our experience, the most expedient solution is to go to another bank. More often than not, alternative banks (which means alternative valuers) will value the property at contract pric

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Many lenders are taking a number of weeks (sometimes months) to approve loans at the moment. These delays have been caused mainly by significantly higher mortgage application volumes and the operational disruption from onshoring back-office services due to Covid lockdowns in the Philippines and India.

As such, banks are prioritising applications for borrowers that have already purchased property and have a definitive settlement date to meet. Consequently, pre-approval applications are low priority and can take a long time to arrange. This blog discusses the pros and cons associated with buying a property without a loan pre-approval.

What is a mortgage pre-approval?
A pre-approval is a conditional loan approval. Typically, the main condition is that the borrower is able to offer a suitable property as security for the proposed loan. For example, a bank may approve a loan for $800,000 subject to the borrower buying an acceptable property that is valued by the bank at an amount of at least $1,000,000 (to keep the loan to value ratio at 80%). The only other condition might be that the borrower’s financial circumstances do not change. This is called an approval-in-principle (AIP) or pre-approval.

Arranging a written pre-approval with a bank (via a mortgage broker), gives borrowers a higher level of certainty that, if they go ahead and purchase a property, that the bank will ultimately unconditionally approve a loan to fund that property.

Pre-approvals do not attract any fees (they are free) and you are not obligated to use that lender or borrow the pre-approved amount.

What could go wrong even if you have a pre-approval?
Things can still go wrong even if you have a pre-approval.

Typically, the only material risk is that the bank values your new property below the purchase price. The bank will lend against the contract price or valuation, whichever is lower. If the property valuation is lower than purchase price, it will mean you won’t be able to borrow as much and you must contribute more cash (or additional property as security).

For example, if you buy a property for $1,000,000 and need to borrow 80% (or $800,000), and the property valuation comes back at $950,000, the bank will reduce your loan amount to 80% of that value, being $760,000. That means you must contribute another $40,000 of cash to be able to settle on the property.

The other risk is a change in circumstances (such as losing your job) occurring between when the pre-approval was issued and when the loan is ultimately formally approved. Of course, if your circumstances change before you have purchased a property, you should go back and speak to your bank or broker. If your circumstances change after you have purchased but prior to a loan being fully approved, that could be problematic, although this is very, very rare.

Are low valuations common?
No. By definition, the value of a property is what the market is prepared to pay for it. Therefore, if you have purchased a property in a standard open-market sale, that is usually strong evidence of its current market value.

However, if there are not enough sales of comparable properties to support your purchase price, that is when a low-valuation becomes a risk.

It is possible to challenge a bank valuation by providing additional evidence, but this usually has a low success rate for a variety of reasons. In our experience, the most expedient solution is to go to another bank. More often than not, alternative banks (which means alternative valuers) will value the property at contract pric

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 1b16168b-d469-4365-83ec-ae6308dc7733 Wed, 19 May 2021 08:00:00 +1000 1233 investopoly,wemyss,rules of the lending game,prosolution private clients,AIP,approval-in-principle,pre-approval,mortgage,mortgages,investment proprty,property,property investing 1 162 false 2021 Federal Budget - Financial planning opportunities 2021 Federal Budget - Financial planning opportunities Treasurer Frydenberg handed down the federal budget last night and to be honest, there’s not a lot in it for individuals and investors. However, there are some real positives for small business, first home buyers and retirees. This blog provides a summary of the initiatives announced on 11 May 2021.

First home buyers’ to be able to access more super for a deposit
The First Home Super Saver (FHSS) scheme was introduced four years ago to help first home buyers save a deposit. In summary savers can make tax-deductible voluntary contributions into super of up to $15,000 per year. These contributions are usually taxed at a flat rate of 15%, which means it reduces their income tax liabilities. They can then access these savings (plus investment earnings) in the future and contribute the monies towards the purchase of a first home. Previously, the maximum a saver could access from super was capped at $30,000. However, this has been increased to $50,000 in this year’s budget.

Savers cannot withdraw compulsory employer contributions i.e. the 9.5% (to increase to 10% after 1 July 2021) their employer contributes on their behalf. These contributions are still preserved inside super, which is good.

The benefit of this is it makes it easier to save after-tax dollars. For example, someone earning $135,000 p.a. pre-tax would pay a marginal tax rate of 39% on the last $14,000 of pre-tax income – or $5,460 – allowing them to save only $8,540 after-tax ($14,000 - $5,460). However, if they salary sacrificed that $14,000 into super, their super fund would only pay $2,100 of tax, allowing them to save $11,900 after-tax. In this example, this person has increased their savings by almost 40% due to the tax savings.

People earning greater than $120,000 p.a. could enjoy the highest tax savings.

Expend the home loan guarantee scheme
The First Home Loan Deposit Scheme (FHLDS) allows borrowers to borrow more than 80% of a property’s value whilst avoiding the cost of mortgage insurance, because the government guarantees part of the loan. Places under this scheme are very limited. However, the government will make available another 10,000 places. Plus a further 10,000 places over the next four years to eligible single parents with dependants.

If you earn less than $120,000 – extension of low to middle income tax offset
If you earn less than $120,000 you may be entitled to a tax offset of up to $1,080 (progressively scaled back if you earn between $90,000 and $120,000) – see here. This offset was introduced 3 years ago but has been extended to apply in the 2021/22 tax year.

Increase to the Child Care Subsidy (CCS)
From 1 July 2021, the government will move the CCS cap of $10,560 per child. And commencing on 11 July 2022, the government will increase the childcare subsidy for parents with two or more children under the age of five by 30%, up to a maximum CCS rate of 95% for these children.

Company tax rate cut
The company tax rate will reduce from 26% for ‘base rate’ entities (revenue less than $50 mill

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Treasurer Frydenberg handed down the federal budget last night and to be honest, there’s not a lot in it for individuals and investors. However, there are some real positives for small business, first home buyers and retirees. This blog provides a summary of the initiatives announced on 11 May 2021.

First home buyers’ to be able to access more super for a deposit
The First Home Super Saver (FHSS) scheme was introduced four years ago to help first home buyers save a deposit. In summary savers can make tax-deductible voluntary contributions into super of up to $15,000 per year. These contributions are usually taxed at a flat rate of 15%, which means it reduces their income tax liabilities. They can then access these savings (plus investment earnings) in the future and contribute the monies towards the purchase of a first home. Previously, the maximum a saver could access from super was capped at $30,000. However, this has been increased to $50,000 in this year’s budget.

Savers cannot withdraw compulsory employer contributions i.e. the 9.5% (to increase to 10% after 1 July 2021) their employer contributes on their behalf. These contributions are still preserved inside super, which is good.

The benefit of this is it makes it easier to save after-tax dollars. For example, someone earning $135,000 p.a. pre-tax would pay a marginal tax rate of 39% on the last $14,000 of pre-tax income – or $5,460 – allowing them to save only $8,540 after-tax ($14,000 - $5,460). However, if they salary sacrificed that $14,000 into super, their super fund would only pay $2,100 of tax, allowing them to save $11,900 after-tax. In this example, this person has increased their savings by almost 40% due to the tax savings.

People earning greater than $120,000 p.a. could enjoy the highest tax savings.

Expend the home loan guarantee scheme
The First Home Loan Deposit Scheme (FHLDS) allows borrowers to borrow more than 80% of a property’s value whilst avoiding the cost of mortgage insurance, because the government guarantees part of the loan. Places under this scheme are very limited. However, the government will make available another 10,000 places. Plus a further 10,000 places over the next four years to eligible single parents with dependants.

If you earn less than $120,000 – extension of low to middle income tax offset
If you earn less than $120,000 you may be entitled to a tax offset of up to $1,080 (progressively scaled back if you earn between $90,000 and $120,000) – see here. This offset was introduced 3 years ago but has been extended to apply in the 2021/22 tax year.

Increase to the Child Care Subsidy (CCS)
From 1 July 2021, the government will move the CCS cap of $10,560 per child. And commencing on 11 July 2022, the government will increase the childcare subsidy for parents with two or more children under the age of five by 30%, up to a maximum CCS rate of 95% for these children.

Company tax rate cut
The company tax rate will reduce from 26% for ‘base rate’ entities (revenue less than $50 mill

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 5285399b-f9dc-4b3a-956e-a2f6dcb70fcd Wed, 12 May 2021 10:02:00 +1000 1025 investopoly,rules of the lending game,wemyss,2021 budget,federal budget,superannuation,first home buers,corporate tax 1 161 false How to make the most of your super increase (after 1 July 2021) How to make the most of your super increase (after 1 July 2021) After 1 July this year, your employer must increase your super contributions from 9.5% to 10% of your salary. This contribution rate will then increase by 0.5% p.a. for the subsequent 4 years until it reaches 12%. This could boost your retirement savings but only if you optimise two things.

The government was tempted to delay this increase
It has been reported that the government was contemplating delaying increasing the Superannuation Guarantee Charge (SGC). The increase in SGC was proposed by the Gillard government back in 2012 but it was subsequently delayed until 1 July 2021. The Morrison government was probably concerned about whether businesses could afford higher employment costs during a pandemic. In addition, some commentators have suggested it would deter higher wage growth because any possibility for wage increases would be thwarted by higher superannuation costs.

In my opinion, not delaying the super increase is the right decision. The underlying economy is recovering better than expected. And an increase in wage inflation in the short term is probably unlikely anyway for a variety of reasons. Forcing people to increase the amount they save for their future retirement is a good thing for them personally and the country as a whole.

What effect will this have on your future super balance?
The table below sets out the projected increase in super balance depending on your income and your super balance today. There are three numbers in each corresponding cell. The first number represents the percentage increase over a 10 year period, the second over 20 years and the third over 30 years. For example, if your super balance is $200k and your income is $150k, then this increased SGC rate over the next 5 years is projected to increase your super balance by 6.1% in 10 years, 9.1% in 20 years and 10.3% in 30 years.

See table at https://www.prosolution.com.au/super-increase/

As we can see, the increase in SGC really helps people with lower super balances the most.

However, if you already have a healthy super balance, the increase in contributions probably isn’t going to have a material impact on your retirement. Instead, fees and returns will have a greater impact on your future balance.

It is important to highlight that most people will need to invest in assets in addition to super to be able to enjoy a very comfortable retirement. That is, super alone is rarely sufficient.
There are two factors you must optimise:

Factor one: Minimise fees
Fees are guaranteed. Investment returns are not.

It is important to minimise investment and administration fees as much as possible. Unlike many things in life, paying higher fees does not generate higher returns. In fact, many studies have shown that there is an inverse relationship between investment fees and investment returns. That is, typically, the lower the fees, the higher the returns. With investments, when you pay more, you receive less.

If your super is with an industry super fund, you should aim to pay no more than 0.70% p.a. in investment and admin fees plus a fixed dollar fee of around $100-140 p.a. If your fees are materially more than this, you should review alternative options.

Factor two: Maximise returns
This is an obvious second factor. Of course, you must maximise your investment returns.

One of the commonly espoused benefits of industry super funds

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> After 1 July this year, your employer must increase your super contributions from 9.5% to 10% of your salary. This contribution rate will then increase by 0.5% p.a. for the subsequent 4 years until it reaches 12%. This could boost your retirement savings but only if you optimise two things.

The government was tempted to delay this increase
It has been reported that the government was contemplating delaying increasing the Superannuation Guarantee Charge (SGC). The increase in SGC was proposed by the Gillard government back in 2012 but it was subsequently delayed until 1 July 2021. The Morrison government was probably concerned about whether businesses could afford higher employment costs during a pandemic. In addition, some commentators have suggested it would deter higher wage growth because any possibility for wage increases would be thwarted by higher superannuation costs.

In my opinion, not delaying the super increase is the right decision. The underlying economy is recovering better than expected. And an increase in wage inflation in the short term is probably unlikely anyway for a variety of reasons. Forcing people to increase the amount they save for their future retirement is a good thing for them personally and the country as a whole.

What effect will this have on your future super balance?
The table below sets out the projected increase in super balance depending on your income and your super balance today. There are three numbers in each corresponding cell. The first number represents the percentage increase over a 10 year period, the second over 20 years and the third over 30 years. For example, if your super balance is $200k and your income is $150k, then this increased SGC rate over the next 5 years is projected to increase your super balance by 6.1% in 10 years, 9.1% in 20 years and 10.3% in 30 years.

See table at https://www.prosolution.com.au/super-increase/

As we can see, the increase in SGC really helps people with lower super balances the most.

However, if you already have a healthy super balance, the increase in contributions probably isn’t going to have a material impact on your retirement. Instead, fees and returns will have a greater impact on your future balance.

It is important to highlight that most people will need to invest in assets in addition to super to be able to enjoy a very comfortable retirement. That is, super alone is rarely sufficient.
There are two factors you must optimise:

Factor one: Minimise fees
Fees are guaranteed. Investment returns are not.

It is important to minimise investment and administration fees as much as possible. Unlike many things in life, paying higher fees does not generate higher returns. In fact, many studies have shown that there is an inverse relationship between investment fees and investment returns. That is, typically, the lower the fees, the higher the returns. With investments, when you pay more, you receive less.

If your super is with an industry super fund, you should aim to pay no more than 0.70% p.a. in investment and admin fees plus a fixed dollar fee of around $100-140 p.a. If your fees are materially more than this, you should review alternative options.

Factor two: Maximise returns
This is an obvious second factor. Of course, you must maximise your investment returns.

One of the commonly espoused benefits of industry super funds

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 0784eda4-ddf4-403e-8f27-e6709fa0ee74 Wed, 05 May 2021 08:00:00 +1000 1309 investopoly,wemyss,rules of the lending game,prosolution private clients,industry super funds,superannuation,super,super funds,super contributions,investment returns,compared super funds 1 160 false Tax: How to minimise your largest lifetime expense Tax: How to minimise your largest lifetime expense Tax isn’t necessarily a bad thing. If you’re paying tax, it means that you are making money (income or capital gains). But of course, there’s no need to pay any more than you legally have to. I discuss our common-sense approach to saving tax below.

Minimising risk is often more important than saving tax
It is not worth it to bend or break the law to save a few hundred dollars in tax. For example, if you get audited and you have some dodgy deductions, it will encourage the ATO to look harder. The last thing you want is to attract the ATO’s attention.

My approach has always been to stick within the black letter of the law. Bending the law is rarely worth it. However, if there are entirely legitimate ways to minimise tax liabilities, then it would be silly to not explore them.

Remember, when you lodge a tax return, the taxpayer takes all the risk. If you get audited, you will be liable for the interest and penalties, not your accountant.

Often, tax can only be delayed, not avoided
Of course, there are few things you can do to minimise tax. However, more aggressive tax minimising measures tend to delay tax rather than permanently reduce it. Often, implementing these strategies create cost (tax advice fees and documentation) and complexity. Even the best plans can be thwarted by the ATO issuing a tax ruling, practice statement or change in law to outlaw your plans. Sometimes, it’s better to keep things simple. Minimise tax as much as possible without creating too much cost and complexity.

Minimise tax whilst you’re working (pre-retirement)
I list some of the common strategies we use to help clients minimise taxation liabilities whilst they are working i.e. generating personal exertion income.

Personal exertion income earners have few avenues to minimise tax
If you are a PAYG employee or earn Personal Services Income, there are not many avenues available to you to minimise your income tax liability. Of course, you can use negative gearing and/or contribute into super (discussed below), but that’s about it. There are some additional tactics available to certain professionals such as barristers and medicos. If there are limited avenues available to you to minimise income tax, then its best to focus on minimising other tax liabilities such as tax on investment returns, land tax and so on – which I discuss below.

Contribute into super
After 1 July 2021, individuals can contribute up to $27,500 per year into super and claim a tax deduction for this expense. The concessional contribution cap of $27,500 also includes any mandated employer contributions I.e. the compulsory 9.5% of your salary your employer contributes.
Concessional contributions are taxed in your super fund at a flat rate of 15% if your annual income is less than $250,000 (or 30% for higher income earners).

Borrow to invest (negative gearing)
Borrowing to invest essentially allows you to use other people’s money (the banks) to build your personal wealth. You can use pre-tax income to pay for the interest expense. This used to be very tax effective. However, now that interest rates are so low, borrowing to invest provides substantially smaller tax benefits. That said, apart from the tax savings, borrowing to invest (to generate capital growth) often makes good sense, especially if you are more than 10 years from retirement.

Minimise tax on investment returns
If there are not many avenues to reduce the amount of tax you pay on your income, then at least make sure you don’t pay too much tax on your investment returns.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

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This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Tax isn’t necessarily a bad thing. If you’re paying tax, it means that you are making money (income or capital gains). But of course, there’s no need to pay any more than you legally have to. I discuss our common-sense approach to saving tax below.

Minimising risk is often more important than saving tax
It is not worth it to bend or break the law to save a few hundred dollars in tax. For example, if you get audited and you have some dodgy deductions, it will encourage the ATO to look harder. The last thing you want is to attract the ATO’s attention.

My approach has always been to stick within the black letter of the law. Bending the law is rarely worth it. However, if there are entirely legitimate ways to minimise tax liabilities, then it would be silly to not explore them.

Remember, when you lodge a tax return, the taxpayer takes all the risk. If you get audited, you will be liable for the interest and penalties, not your accountant.

Often, tax can only be delayed, not avoided
Of course, there are few things you can do to minimise tax. However, more aggressive tax minimising measures tend to delay tax rather than permanently reduce it. Often, implementing these strategies create cost (tax advice fees and documentation) and complexity. Even the best plans can be thwarted by the ATO issuing a tax ruling, practice statement or change in law to outlaw your plans. Sometimes, it’s better to keep things simple. Minimise tax as much as possible without creating too much cost and complexity.

Minimise tax whilst you’re working (pre-retirement)
I list some of the common strategies we use to help clients minimise taxation liabilities whilst they are working i.e. generating personal exertion income.

Personal exertion income earners have few avenues to minimise tax
If you are a PAYG employee or earn Personal Services Income, there are not many avenues available to you to minimise your income tax liability. Of course, you can use negative gearing and/or contribute into super (discussed below), but that’s about it. There are some additional tactics available to certain professionals such as barristers and medicos. If there are limited avenues available to you to minimise income tax, then its best to focus on minimising other tax liabilities such as tax on investment returns, land tax and so on – which I discuss below.

Contribute into super
After 1 July 2021, individuals can contribute up to $27,500 per year into super and claim a tax deduction for this expense. The concessional contribution cap of $27,500 also includes any mandated employer contributions I.e. the compulsory 9.5% of your salary your employer contributes.
Concessional contributions are taxed in your super fund at a flat rate of 15% if your annual income is less than $250,000 (or 30% for higher income earners).

Borrow to invest (negative gearing)
Borrowing to invest essentially allows you to use other people’s money (the banks) to build your personal wealth. You can use pre-tax income to pay for the interest expense. This used to be very tax effective. However, now that interest rates are so low, borrowing to invest provides substantially smaller tax benefits. That said, apart from the tax savings, borrowing to invest (to generate capital growth) often makes good sense, especially if you are more than 10 years from retirement.

Minimise tax on investment returns
If there are not many avenues to reduce the amount of tax you pay on your income, then at least make sure you don’t pay too much tax on your investment returns.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 996a6318-9173-4612-8c00-01e2674ed6fb Wed, 28 Apr 2021 09:00:00 +1000 965 Investopoly,wemyss,rules of the lending game,tax minimisation,tax,tax planning,CGT,Income tax,Save tax,Saving tax 1 159 false Don't underestimate the mathematical power of gearing Don't underestimate the mathematical power of gearing It’s stating the obvious to say interest rates are very low at the moment. But what can be easily missed is how powerful low rates can be for investors. And arguably, the next few decades could provide the best opportunities in a lifetime for investors, if they are diligent and invest in high quality assets.

When will interest rates rise?
That is the million-dollar question. The short answer is that no one really knows. But we should remind ourselves that interest rate expectations can change very quickly, so we must factor that into our investment decision making. That is, make sure you can afford higher loan repayments when rates eventually rise.

The RBA has been very firm in regard to its intention. It has said that it will not raise rates until the inflation rate rises above 2% p.a., which it does not expect will occur before 2024. Therefore, it seems variable rates are on hold for at least 2.5 more years.

We should consider the level of government indebtedness and the impact rising interest rates will have on the budget. Economies can become reliant on low interested rates – look at Japan as an example. It has been stuck on zero interest rates for more than 20 years.

For what it’s worth, my view is that variable rates probably won’t change materially over the next 3 to 5 years. Beyond 5 years, they are likely to rise but probably at a relatively slow pace. It is quite difficult to fathom rates rising above 5-6% p.a. over the next few decades. Low rates could be the “new normal”.

Simple math proves its power
Investors can lock in an interest rate for 5 years at 2.69% p.a. with interest-only repayments. I think we can all agree that is low (especially compared to early 1990’s rates, as shown in this image doing the rounds on social media).

Assuming you have a surplus annual cash flow of $25,000 to invest, you have two obvious options:
1. Invest it incrementally each year in an investment such as a share market index fund; or
2. Borrow a lump sum, buy an investment property and use the cash flow to pay for its net holding costs.

If you chose the first option and you received a return of 10% p.a. over the next 20 years (which would be a very good outcome), your investment would be worth almost $1.45 million (equivalent to circa $880k in today’s dollars).

If you chose the second option, you could purchase an investment property for $1.2 million. Because fixed interest rates are so low, the cost to hold this investment would be circa $7,000 p.a. after-tax. But you could retain the balance of your surplus cash flow ($25,000 less $7,000 = $18,000) in the loan’s offset account to provide for future interest rate increases. This option would be superior if the value of your investment property appreciated to be worth approximately $2.5 million in 20 years’ time. That equates to a compounding growth rate of only 3.8% p.a.

Assuming you buy a high-quality, investment-grade property in a blue-chip location with strong fundamentals, what’s the chance of it appreciating by at least 3.8% p.a.? It’s almost certain, isn’t it?

What if property appreciates by 6% p.a.?
Continuing with the above example, if the property actually appreciated by 6% p.a., your equity would be worth $2.75 million in 20 years.

To achieve the same return using the first option (i.e. no gearing), you would need to generate an average compounding return of at least 15.4% p.a. over 20 years. Historical returns indicate that this tar

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> It’s stating the obvious to say interest rates are very low at the moment. But what can be easily missed is how powerful low rates can be for investors. And arguably, the next few decades could provide the best opportunities in a lifetime for investors, if they are diligent and invest in high quality assets.

When will interest rates rise?
That is the million-dollar question. The short answer is that no one really knows. But we should remind ourselves that interest rate expectations can change very quickly, so we must factor that into our investment decision making. That is, make sure you can afford higher loan repayments when rates eventually rise.

The RBA has been very firm in regard to its intention. It has said that it will not raise rates until the inflation rate rises above 2% p.a., which it does not expect will occur before 2024. Therefore, it seems variable rates are on hold for at least 2.5 more years.

We should consider the level of government indebtedness and the impact rising interest rates will have on the budget. Economies can become reliant on low interested rates – look at Japan as an example. It has been stuck on zero interest rates for more than 20 years.

For what it’s worth, my view is that variable rates probably won’t change materially over the next 3 to 5 years. Beyond 5 years, they are likely to rise but probably at a relatively slow pace. It is quite difficult to fathom rates rising above 5-6% p.a. over the next few decades. Low rates could be the “new normal”.

Simple math proves its power
Investors can lock in an interest rate for 5 years at 2.69% p.a. with interest-only repayments. I think we can all agree that is low (especially compared to early 1990’s rates, as shown in this image doing the rounds on social media).

Assuming you have a surplus annual cash flow of $25,000 to invest, you have two obvious options:
1. Invest it incrementally each year in an investment such as a share market index fund; or
2. Borrow a lump sum, buy an investment property and use the cash flow to pay for its net holding costs.

If you chose the first option and you received a return of 10% p.a. over the next 20 years (which would be a very good outcome), your investment would be worth almost $1.45 million (equivalent to circa $880k in today’s dollars).

If you chose the second option, you could purchase an investment property for $1.2 million. Because fixed interest rates are so low, the cost to hold this investment would be circa $7,000 p.a. after-tax. But you could retain the balance of your surplus cash flow ($25,000 less $7,000 = $18,000) in the loan’s offset account to provide for future interest rate increases. This option would be superior if the value of your investment property appreciated to be worth approximately $2.5 million in 20 years’ time. That equates to a compounding growth rate of only 3.8% p.a.

Assuming you buy a high-quality, investment-grade property in a blue-chip location with strong fundamentals, what’s the chance of it appreciating by at least 3.8% p.a.? It’s almost certain, isn’t it?

What if property appreciates by 6% p.a.?
Continuing with the above example, if the property actually appreciated by 6% p.a., your equity would be worth $2.75 million in 20 years.

To achieve the same return using the first option (i.e. no gearing), you would need to generate an average compounding return of at least 15.4% p.a. over 20 years. Historical returns indicate that this tar

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 2afd7d2a-c15e-4e2b-ae9c-9ba65f52b08e Wed, 21 Apr 2021 09:00:00 +1000 975 investopoly,wemyss,rules of the lending game,financial advice,gearing,borrowing to invest,property investing,property,property investment 1 158 false Investment opportunity: Is the share market switching to value? Investment opportunity: Is the share market switching to value? Growth investors have been well-rewarded over the past decade. For example, the S&P500 index (US market) has delivered an average return of 14.5% p.a. over the past 10 years solely off the back of growth stocks, mainly technology. However, this year to date, value has outperformed growth. If this continues, it could have significant implications for investors.
Value versus growth
A ‘value’ approach involves investing in companies that appear to be under-valued by the market. Investors use a number of ratios to measure whether a company is under or overvalued including price-earnings (PE) ratio, book to market value and so on. The investment thesis is that there is a large body of evidence that demonstrates your starting valuation is a good indicator of future returns. When valuations are low, subsequent returns are high. Such companies also tend to have strong fundamentals including strong cash flow, profitability, strong balances sheets, etc.
A ‘growth’ methodology is less concerned about whether the company is fairly valued by the market. It is all about future potential for growth. Growth investors are encouraged to focus mainly on top line indicators such as user numbers, revenue and growth potential e.g. how big the market could be one day. It seems that profitability is rarely a consideration.
Tech has been a big contributor to growth
The large US tech companies have been major contributors to the stock markets growth over the past ten years. The chart below measures how much the FAAMG stocks (being Facebook, Amazon, Apple, Microsoft and Google) have contributed towards the overall performance of the S&P 500 index over the past 1 to 5 years. Over the past 5 years, they are responsible for driving almost half (48.4%) of the index’s return.
If we look at the PE ratios that these FAAMG stocks, we can clearly see that valuations seem unsustainable (Facebook = 31, Amazon = 81, Apple = 36, Microsoft = 38 and Google = 37). To put this in context, the average PE for the S&P 500 has historically ranged between 14 and 18.


Growth has been the clear winner over the past decade
The chart below (published by Dimensional) compares the returns from value and growth since 1926. As you can see, for 84 years (between 1926 and 2010), value was the clear winner. But since 2010, growth has out-performed, particularly over the past 3 years.


But value has performed better this year
One thing that is for certain in financial markets is that outperformance never persists forever. Markets move in cycles. Returns eventually revert to their long-term mean. That means that periods of relative out-performance usually are followed by periods of relative under-performance.
The chart below produced by S&P Dow Jones below illustrates the returns for the 3 months ended 31 March 2021. ‘Pure value’ was the second highest performing factor returning 21%. That compares very favourably against ‘pure growth’ which returned only 0.8% for the period.

In Australia, the performance differential was just as stark. ASX200 Value returned 8.5% for the 3 months ending March 2021 whereas Growth lost 0.09%.
What has changed this year?
It is natural to question why the market has switched from
growth to value this year. Th

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Growth investors have been well-rewarded over the past decade. For example, the S&P500 index (US market) has delivered an average return of 14.5% p.a. over the past 10 years solely off the back of growth stocks, mainly technology. However, this year to date, value has outperformed growth. If this continues, it could have significant implications for investors.
Value versus growth
A ‘value’ approach involves investing in companies that appear to be under-valued by the market. Investors use a number of ratios to measure whether a company is under or overvalued including price-earnings (PE) ratio, book to market value and so on. The investment thesis is that there is a large body of evidence that demonstrates your starting valuation is a good indicator of future returns. When valuations are low, subsequent returns are high. Such companies also tend to have strong fundamentals including strong cash flow, profitability, strong balances sheets, etc.
A ‘growth’ methodology is less concerned about whether the company is fairly valued by the market. It is all about future potential for growth. Growth investors are encouraged to focus mainly on top line indicators such as user numbers, revenue and growth potential e.g. how big the market could be one day. It seems that profitability is rarely a consideration.
Tech has been a big contributor to growth
The large US tech companies have been major contributors to the stock markets growth over the past ten years. The chart below measures how much the FAAMG stocks (being Facebook, Amazon, Apple, Microsoft and Google) have contributed towards the overall performance of the S&P 500 index over the past 1 to 5 years. Over the past 5 years, they are responsible for driving almost half (48.4%) of the index’s return.
If we look at the PE ratios that these FAAMG stocks, we can clearly see that valuations seem unsustainable (Facebook = 31, Amazon = 81, Apple = 36, Microsoft = 38 and Google = 37). To put this in context, the average PE for the S&P 500 has historically ranged between 14 and 18.


Growth has been the clear winner over the past decade
The chart below (published by Dimensional) compares the returns from value and growth since 1926. As you can see, for 84 years (between 1926 and 2010), value was the clear winner. But since 2010, growth has out-performed, particularly over the past 3 years.


But value has performed better this year
One thing that is for certain in financial markets is that outperformance never persists forever. Markets move in cycles. Returns eventually revert to their long-term mean. That means that periods of relative out-performance usually are followed by periods of relative under-performance.
The chart below produced by S&P Dow Jones below illustrates the returns for the 3 months ended 31 March 2021. ‘Pure value’ was the second highest performing factor returning 21%. That compares very favourably against ‘pure growth’ which returned only 0.8% for the period.

In Australia, the performance differential was just as stark. ASX200 Value returned 8.5% for the 3 months ending March 2021 whereas Growth lost 0.09%.
What has changed this year?
It is natural to question why the market has switched from
growth to value this year. Th

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss e695d03b-0632-454e-ae53-4810878f4a37 Wed, 14 Apr 2021 09:00:00 +1000 1143 investopoly,wemyss,rules of the lending game,shares,share market,value,growth,value investing,index funds,ETF,Passive investing,Financial advice 1 157 false Why property price growth will level out over the rest of this year Why property price growth will level out over the rest of this year The internet and newspapers are awash with stories of properties selling for amounts wildly above reserve. Such news can create FOMO and fuel buyer demand. But buyer overexuberance is rarely sustained for long periods of time. My feeling is that price growth will level out this year and I set out the reasons why below.

Properties can sell above reserve for many reasons
Last month, a property located in the Eastern suburbs of Sydney (209 Edgecliff Road, Woollahra) sold for $1.5 million more than the reserve. Of course, this is an extreme example, but stories of properties exceeding reserves suggest the market is running away. I’m not suggesting these results aren’t noteworthy. They are. However, we must remind ourselves that multiple factors can contribute towards a property selling for more than its reserve.

Firstly, of course, it could be that the demand is so strong for the property that multiple bidders push the price higher. Some of these bidders may be driven by emotion, particularly home buyers. They might fall in love with the property or their ego might kick in because they don’t want to “lose” at the action. Whatever the motivation, “paying more” contributes to high prices.

Secondly, the reserve might be too low. Not all vendors are motivated to maximise their sale price – there might be other factors. Also, they might have an unrealistic expectation of current value (too low). Or maybe the selling agent was keen to quote the lowest possible reserve to attract more potential buyers.

Finally, interest rates have a big impact on affordability, particularly for higher-value property, as buyers tend to borrow more. Fixed home loan interest rates of less than 2% p.a. make spending “a little more” on a property more affordable than it was 5+ years ago.

Remember, prices have been stagnant for 3 years
Median house prices in most capital cities haven’t really changed since early 2018. The reason being is it’s been a pretty tumultuous period for the property market.

Tightening in credit (borrowing capacity) occurred throughout 2017 and 2018, which reduced the volume of property buyers, particularly investors.

In 2018 and 2019, the ALP’s federal election policy of banning of negative gearing and hiking the rate of capital gain tax weighed on property market sentiment.

And then in 2020 we had Covid and resultant lockdowns.

All these factors have meant that property prices were largely stagnant for the past three years. The long-term average growth rate of property (as depicted in this chart) is around 7.5% p.a. Therefore, arguably, the intrinsic value of property should be approximately 24% higher than 2017/2018 levels (being 3 years of growth). After all, mean reversion is a strong trend that has been present for many decades.

A greater number of motivated buyers than sellers
It is possible that someone wanting to buy property over the past few years has been put off by a number of factors including credit tightening, the 2019 federal election and Covid. All of these events resulted in negative predictions for the property market.

However, not all buyers can delay their decision forever, particularly if they you need to buy for practical reasons such as changing locations or increas

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> The internet and newspapers are awash with stories of properties selling for amounts wildly above reserve. Such news can create FOMO and fuel buyer demand. But buyer overexuberance is rarely sustained for long periods of time. My feeling is that price growth will level out this year and I set out the reasons why below.

Properties can sell above reserve for many reasons
Last month, a property located in the Eastern suburbs of Sydney (209 Edgecliff Road, Woollahra) sold for $1.5 million more than the reserve. Of course, this is an extreme example, but stories of properties exceeding reserves suggest the market is running away. I’m not suggesting these results aren’t noteworthy. They are. However, we must remind ourselves that multiple factors can contribute towards a property selling for more than its reserve.

Firstly, of course, it could be that the demand is so strong for the property that multiple bidders push the price higher. Some of these bidders may be driven by emotion, particularly home buyers. They might fall in love with the property or their ego might kick in because they don’t want to “lose” at the action. Whatever the motivation, “paying more” contributes to high prices.

Secondly, the reserve might be too low. Not all vendors are motivated to maximise their sale price – there might be other factors. Also, they might have an unrealistic expectation of current value (too low). Or maybe the selling agent was keen to quote the lowest possible reserve to attract more potential buyers.

Finally, interest rates have a big impact on affordability, particularly for higher-value property, as buyers tend to borrow more. Fixed home loan interest rates of less than 2% p.a. make spending “a little more” on a property more affordable than it was 5+ years ago.

Remember, prices have been stagnant for 3 years
Median house prices in most capital cities haven’t really changed since early 2018. The reason being is it’s been a pretty tumultuous period for the property market.

Tightening in credit (borrowing capacity) occurred throughout 2017 and 2018, which reduced the volume of property buyers, particularly investors.

In 2018 and 2019, the ALP’s federal election policy of banning of negative gearing and hiking the rate of capital gain tax weighed on property market sentiment.

And then in 2020 we had Covid and resultant lockdowns.

All these factors have meant that property prices were largely stagnant for the past three years. The long-term average growth rate of property (as depicted in this chart) is around 7.5% p.a. Therefore, arguably, the intrinsic value of property should be approximately 24% higher than 2017/2018 levels (being 3 years of growth). After all, mean reversion is a strong trend that has been present for many decades.

A greater number of motivated buyers than sellers
It is possible that someone wanting to buy property over the past few years has been put off by a number of factors including credit tightening, the 2019 federal election and Covid. All of these events resulted in negative predictions for the property market.

However, not all buyers can delay their decision forever, particularly if they you need to buy for practical reasons such as changing locations or increas

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss e1a1e8ad-f5fa-4f13-b54b-165b4a74ab5c Wed, 07 Apr 2021 08:45:00 +1000 1130 investopoly,wemyss,rules of the lending game,property prices,property investing,investment property,property, 1 156 false What is a holistic accountant? What value do they provide? When to use one. What is a holistic accountant? What value do they provide? When to use one. The word ‘holistic’ is defined by Oxford Languages as “characterised by the belief that the parts of something are intimately interconnected and explicable only by reference to the whole.” This definition implies what a holistic accountant is positioned to offer you the most value. But not all accountants are able to adopt a holistic approach.

This blog sets out the key considerations to help you assess whether you would benefit from engaging a holistic accountant.

Taxation and investing are inextricably intertwined
Taxation is typically your biggest lifetime expense. Therefore, it makes sense that you should take steps to minimise it. This includes ensuring your investments are tax-effective. The less tax you pay, the more investment returns you keep. The more you keep, the less assets you need to fund retirement.

Take superannuation as an example. It’s a wonderful investment vehicle because its concessionally taxed at a rate of 15% for income and 10% for capital gains. However, in retirement (pension), all investment income and gains are tax free (if your account balance is less than $1.7 million after 1 July 2021).

Therefore, it is natural for your accountant to recommend contributing into super. But if your super is invested poorly and doesn’t generate any returns, the rate of tax is inconsequential. This demonstrates how intertwined tax and investing is. In this situation, you need an accountant that not only recognises the tax benefits of super, but that can also direct you how to maximise your super investment returns. Of course, there are many examples of how tax and investing are inextricably intertwined, and this is only one.

You trust your accountant
According to research, accountants are rated as the most trusted financial professionals. The main reason for this is that they are independent. Typically, they have nothing to sell to you, other than their advice.

Although, 15 to 20 years ago some accountants sold “tax-effective” agribusiness products to their clients. Unfortunately, everyone that invested lost thousands. Most accounting bodies have since banned accountants from selling products to their clients.

Back to the topic of independence. Being independent means accountants don’t have any conflicts of interest. Their only interest is what is best for you. This situation has resulted in accountants being the most trusted financial professionals.

Your accountant knows a lot about you and your financial position. Together with the trust you have in them, it puts them in a great position to help you.

What is a holistic accountant?
A holistic accountant is someone that helps you maximise your wealth on an after-tax basis. This is more than just saving tax, which is how people have traditionally thought about accountants. It recognises that no amount of tax structuring can compensate for poor quality investment or a bad strategy. The most amount of value is harnessed when the two factors are optimised. That is, when a client has high quality investments that are structured tax-effectively. The value created through optimising both is greater than the sum of the parts.

But not all accountants are able to adopt a holistic approach
There are two hurdles that accountants will face when trying to adopt a holistic approach.

The first is a lack of skill and experience. Its challenging for one person to keep on top of both tax and investing. They don’t necessarily have to know everything – just enough to identify any issues and opportunities. If

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> The word ‘holistic’ is defined by Oxford Languages as “characterised by the belief that the parts of something are intimately interconnected and explicable only by reference to the whole.” This definition implies what a holistic accountant is positioned to offer you the most value. But not all accountants are able to adopt a holistic approach.

This blog sets out the key considerations to help you assess whether you would benefit from engaging a holistic accountant.

Taxation and investing are inextricably intertwined
Taxation is typically your biggest lifetime expense. Therefore, it makes sense that you should take steps to minimise it. This includes ensuring your investments are tax-effective. The less tax you pay, the more investment returns you keep. The more you keep, the less assets you need to fund retirement.

Take superannuation as an example. It’s a wonderful investment vehicle because its concessionally taxed at a rate of 15% for income and 10% for capital gains. However, in retirement (pension), all investment income and gains are tax free (if your account balance is less than $1.7 million after 1 July 2021).

Therefore, it is natural for your accountant to recommend contributing into super. But if your super is invested poorly and doesn’t generate any returns, the rate of tax is inconsequential. This demonstrates how intertwined tax and investing is. In this situation, you need an accountant that not only recognises the tax benefits of super, but that can also direct you how to maximise your super investment returns. Of course, there are many examples of how tax and investing are inextricably intertwined, and this is only one.

You trust your accountant
According to research, accountants are rated as the most trusted financial professionals. The main reason for this is that they are independent. Typically, they have nothing to sell to you, other than their advice.

Although, 15 to 20 years ago some accountants sold “tax-effective” agribusiness products to their clients. Unfortunately, everyone that invested lost thousands. Most accounting bodies have since banned accountants from selling products to their clients.

Back to the topic of independence. Being independent means accountants don’t have any conflicts of interest. Their only interest is what is best for you. This situation has resulted in accountants being the most trusted financial professionals.

Your accountant knows a lot about you and your financial position. Together with the trust you have in them, it puts them in a great position to help you.

What is a holistic accountant?
A holistic accountant is someone that helps you maximise your wealth on an after-tax basis. This is more than just saving tax, which is how people have traditionally thought about accountants. It recognises that no amount of tax structuring can compensate for poor quality investment or a bad strategy. The most amount of value is harnessed when the two factors are optimised. That is, when a client has high quality investments that are structured tax-effectively. The value created through optimising both is greater than the sum of the parts.

But not all accountants are able to adopt a holistic approach
There are two hurdles that accountants will face when trying to adopt a holistic approach.

The first is a lack of skill and experience. Its challenging for one person to keep on top of both tax and investing. They don’t necessarily have to know everything – just enough to identify any issues and opportunities. If

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 07b5262c-03fe-44a8-a046-f0844a4bf2d3 Wed, 31 Mar 2021 10:00:00 +1100 857 investopoly,wemyss,rules of the lending game,the holistic accountant,saving tax,tax,tax planning,tax structures,taxation,investing,financial planning,property investing, 1 155 false Investment lending rules to be tightened this year Investment lending rules to be tightened this year Almost everyone is predicting that property prices will surge higher this year. In fact, the newspapers are already full of stories about properties selling well above reserves.

Low stock levels are partly responsible for the currently exuberant property market. That exuberance might cool as more stock becomes available. But the RBA and the government do not want prices to rise too quick as it might create a bubble, and all bubbles pop eventually.

Predictions of rising property prices
Westpac’s chief economist, Bill Evans predicts that Australian property prices will rise by 20% over the next two years. Most other economists agree with him.

Mr Evans cited Australia’s better-than-expected economic recovery, the vaccine rollout and historically low interest rates as the reasons for his optimistic property price prediction.

According to ABS lending indicators, the property market is still dominated by owner-occupiers. However, as overall sentiment improves, it is likely that investors will return to the market and that could further fuel price rises. The government could become concerned if it believed growth rates were unsustainable.

Imminent loosening of lending rules
Last year the government announced that it would scrap the ‘responsible lending’ rules in order to speed up loan approval times and eliminate the ‘one-size-fits-all’ approach (i.e. give banks more discretion). The practical consequence of this proposal change is that lenders may no longer have to ascertain what you currently spend each month (including discretionary expenses). Instead, they could use a benchmarks. In effect, for many borrowers, it would increase their borrowing capacity.

The Senate Committee recently recommended to the government that these proposed changes become law. The Bill will now need to be debated and passed in the Senate and the House of Representatives before it becomes law. If the Bill is ultimately successful, this could further fuel property prices.

Why the RBA cannot increase interest rates
There are two main reasons why the RBA probably will not increase the Cash Rate.

Firstly, as highlighted by Governor Lowe in a speech in October 2020, the lowest 40% of income earners have been impacted by Covid the most. Whereas higher income earns have been largely unaffected. In fact, most recent data indicates the top 40% of income earners are earning more than pre-Covid. Therefore, an increase in interest rates will adversely impact lower income earners who can least afford it.

Secondly, an increase in interest rates would be very bad news for the federal (and state) budget deficit. The Australian federal government total borrowings are tipped to reach $1 trillion. A 1% p.a. interest in interest rates would cost the government an additional $10 billion. Politically, this is not an attractive prospect. As such, the government has an incentive to maintain low interest rates.

How to cool an overheated property market
If the RBA doesn’t feel it’s appropriate to cool the prope

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Almost everyone is predicting that property prices will surge higher this year. In fact, the newspapers are already full of stories about properties selling well above reserves.

Low stock levels are partly responsible for the currently exuberant property market. That exuberance might cool as more stock becomes available. But the RBA and the government do not want prices to rise too quick as it might create a bubble, and all bubbles pop eventually.

Predictions of rising property prices
Westpac’s chief economist, Bill Evans predicts that Australian property prices will rise by 20% over the next two years. Most other economists agree with him.

Mr Evans cited Australia’s better-than-expected economic recovery, the vaccine rollout and historically low interest rates as the reasons for his optimistic property price prediction.

According to ABS lending indicators, the property market is still dominated by owner-occupiers. However, as overall sentiment improves, it is likely that investors will return to the market and that could further fuel price rises. The government could become concerned if it believed growth rates were unsustainable.

Imminent loosening of lending rules
Last year the government announced that it would scrap the ‘responsible lending’ rules in order to speed up loan approval times and eliminate the ‘one-size-fits-all’ approach (i.e. give banks more discretion). The practical consequence of this proposal change is that lenders may no longer have to ascertain what you currently spend each month (including discretionary expenses). Instead, they could use a benchmarks. In effect, for many borrowers, it would increase their borrowing capacity.

The Senate Committee recently recommended to the government that these proposed changes become law. The Bill will now need to be debated and passed in the Senate and the House of Representatives before it becomes law. If the Bill is ultimately successful, this could further fuel property prices.

Why the RBA cannot increase interest rates
There are two main reasons why the RBA probably will not increase the Cash Rate.

Firstly, as highlighted by Governor Lowe in a speech in October 2020, the lowest 40% of income earners have been impacted by Covid the most. Whereas higher income earns have been largely unaffected. In fact, most recent data indicates the top 40% of income earners are earning more than pre-Covid. Therefore, an increase in interest rates will adversely impact lower income earners who can least afford it.

Secondly, an increase in interest rates would be very bad news for the federal (and state) budget deficit. The Australian federal government total borrowings are tipped to reach $1 trillion. A 1% p.a. interest in interest rates would cost the government an additional $10 billion. Politically, this is not an attractive prospect. As such, the government has an incentive to maintain low interest rates.

How to cool an overheated property market
If the RBA doesn’t feel it’s appropriate to cool the prope

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss f27fdab6-c4e9-4b0e-8dc6-72084da06b34 Wed, 24 Mar 2021 09:00:00 +1100 929 investopoly,rules of the lending game,wemyss,investment lonas,borrowing capacity,property investing,property investment, 1 154 false How to avoid being ripped off by a financial advisor: 3 simple checks How to avoid being ripped off by a financial advisor: 3 simple checks It is alleged that Sydney-based financial advisor, Melissa Caddick stole $25 million from her clients. She has recently gone “missing”, leaving a trail of disaster for her clients and family members.

Many con artists are very cunning and go to great lengths to conceal their wrongdoings. But there are a few simple steps you can take which will virtually eliminate any chance of you being ripped off.

An advisor must be an independent intermediately, not a fund manager
Virtually all fraud committed by financial advisors occurs when the advisor is in control of the investments. That is, they are investing the money on behalf of their clients. This impairs their independence and allows them to manipulate information.

That is why you must demand absolute independence from any advisor you deal with. Your advisor’s job is to hire and/or fire fund managers (based on performance), not be a fund manager themselves. This allows the advisor to always represent your best interests. They are an intermediatory between you and the business investing your money, holding them accountable.

At ProSolution, we invest in a variety of managed investments and Exchange Traded Funds (ETFs). At any time, our clients can go directly to the fund managers or ETF providers website to check on the investments and performance. It is a very transparent arrangement. Transparency is the enemy to fraudsters.

Make sure there’s good internal controls
It is acceptable to allow your financial advisor to make investments on your behalf. In fact, that’s what you are paying them to do. However, they should not have any ability to withdraw funds.

For example, we use an investment platform to invest our clients’ monies. We can invest any monies on the platform, but we cannot withdraw money from that platform. Only our clients are able to do that. This add another layer of protection.

A custodian should hold your assets
All reputable investment platforms and fund managers use a custodian to hold all investment assets. A custodian protects the investor from counterparty risk. For example, if you use Macquarie investment platform and Macquarie goes bankrupt, your money is protected because it’s held on trust with its custodian. A custodian is an independent legal entity that holds assets on trust for its beneficiaries i.e. you.

ASIC and Google searches
The federal government’s Money Smart website allows you to search the financial advisor register. This will tell you a lot about an advisor. Most importantly, it will tell you if they are licensed and who with (i.e. who holds the Australian Financial Services license, “AFSL”). It will also tell what qualifications they hold, their experience, any disciplinary actions, professional memberships and training records.

Melissa Caddick never appeared on this register. So, a simple search conducted by any prospective client would have confirmed that she was not a licensed advisor.

Advisors must give you their AFSL number. It is wise to search this AFSL to ensure it’s a legitimate business – you can do that here. You might even contact the licensee to confirm that the advisor is in fact licensed by them. In

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> It is alleged that Sydney-based financial advisor, Melissa Caddick stole $25 million from her clients. She has recently gone “missing”, leaving a trail of disaster for her clients and family members.

Many con artists are very cunning and go to great lengths to conceal their wrongdoings. But there are a few simple steps you can take which will virtually eliminate any chance of you being ripped off.

An advisor must be an independent intermediately, not a fund manager
Virtually all fraud committed by financial advisors occurs when the advisor is in control of the investments. That is, they are investing the money on behalf of their clients. This impairs their independence and allows them to manipulate information.

That is why you must demand absolute independence from any advisor you deal with. Your advisor’s job is to hire and/or fire fund managers (based on performance), not be a fund manager themselves. This allows the advisor to always represent your best interests. They are an intermediatory between you and the business investing your money, holding them accountable.

At ProSolution, we invest in a variety of managed investments and Exchange Traded Funds (ETFs). At any time, our clients can go directly to the fund managers or ETF providers website to check on the investments and performance. It is a very transparent arrangement. Transparency is the enemy to fraudsters.

Make sure there’s good internal controls
It is acceptable to allow your financial advisor to make investments on your behalf. In fact, that’s what you are paying them to do. However, they should not have any ability to withdraw funds.

For example, we use an investment platform to invest our clients’ monies. We can invest any monies on the platform, but we cannot withdraw money from that platform. Only our clients are able to do that. This add another layer of protection.

A custodian should hold your assets
All reputable investment platforms and fund managers use a custodian to hold all investment assets. A custodian protects the investor from counterparty risk. For example, if you use Macquarie investment platform and Macquarie goes bankrupt, your money is protected because it’s held on trust with its custodian. A custodian is an independent legal entity that holds assets on trust for its beneficiaries i.e. you.

ASIC and Google searches
The federal government’s Money Smart website allows you to search the financial advisor register. This will tell you a lot about an advisor. Most importantly, it will tell you if they are licensed and who with (i.e. who holds the Australian Financial Services license, “AFSL”). It will also tell what qualifications they hold, their experience, any disciplinary actions, professional memberships and training records.

Melissa Caddick never appeared on this register. So, a simple search conducted by any prospective client would have confirmed that she was not a licensed advisor.

Advisors must give you their AFSL number. It is wise to search this AFSL to ensure it’s a legitimate business – you can do that here. You might even contact the licensee to confirm that the advisor is in fact licensed by them. In

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 7b6a5588-e32e-4e04-8d2c-97c0f27cccb3 Wed, 17 Mar 2021 09:00:00 +1100 1050 investopoly,rules of the lending game,wemyss,financial advisor,financial planning,financial advice,choosing a financial advsior,financial advsier 1 153 false Bitcoin, (unprofitable) billion dollar stocks and other madness Bitcoin, (unprofitable) billion dollar stocks and other madness Do you realise that $10,000 invested in Bitcoin 5 years ago would be worth over $1.1 million today? Makes you think, right?

With lockdowns occurring almost everywhere around the world, no one is travelling and AirBNB’s business has been decimated. Yet, its share price has risen by more than 40% over the past year, and it is currently worth nearly $160 billion. That is $10 billion more than Australia’s most valuable company, CBA. Oh, by the way, AirBNB lost $5.8bn in the 2020 fiscal year. In fact, it’s never reported a profit after tax. By comparison, CBA makes nearly $10 billion profit per year.

The big question is; is this the new normal? Is cryptocurrency the next big thing? Is profit and cash flow no longer an important metric when valuing a business?

Cryptical cryptocurrency
I am no expert when it comes to cryptocurrency. In fact, I admit that I know very little about it. But, then again, I have never spent much time researching it because it fails a few basic fundamental tests.

When contemplating an investment, it is important to form a view about the future demand for the product or asset involved. It’s not enough that its currently popular. You must ensure it will continue to be popular. Therefore, we must ask ourselves; who’s using cryptocurrency today and why? As far as I can see, at the moment, cryptocurrency is held solely for speculative purposes. Very few people are actually using it as a substitute for traditional currencies. The one exception to this may be money launderers.

According to the theory of diffusion of innovation, for cryptocurrency to become a sustainable alternative currency, it must be widely adopted. Renowned author, Dr Geoff Moore argues that there is a large chasm between ‘early adopters’ and the ‘early majority’. A product must cross this chasm in order to become self-sustainable.

There are two major impediments stopping cryptocurrency from crossing the chasm
Firstly, cryptocurrency is extremely volatile. The share market’s volatility rate is approximately 20% p.a. compared to Bitcoin at just shy of 50% p.a. On average, Bitcoin’s daily volatility rate is 3% i.e. the price changes on average by 3%. Therefore, if you agree to buy some goods, when it comes to paying for them in 7 days’ time those, goods could end up costing you nearly 20% more!

For cryptocurrency to achieve wide adoption, its volatility rate needs to be around 4-5% p.a. – one tenth of what it currently is!

Secondly, one of cryptocurrency’s selling points is its anonymity. You can hold cryptocurrency without revealing anything about your identity. That makes it a perfect exchange for criminals to use. Governments around the world would have a lot to lose if cryptocurrency was widely used. It would be difficult to operate their tax surveillance activities and it would make policing criminal activity more difficult. If this occurred, governments would start regulating cryptocurrencies in the same way they regulate traditional currencies.

A market dominated by speculators
You must invest in assets that have application other than wealth accumulation. For example, investing in property in a location that is dominated by owner-occupiers is a wise strategy. If the investment market dries up for any reason, demand for property in that location will remain largely intact.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Do you realise that $10,000 invested in Bitcoin 5 years ago would be worth over $1.1 million today? Makes you think, right?

With lockdowns occurring almost everywhere around the world, no one is travelling and AirBNB’s business has been decimated. Yet, its share price has risen by more than 40% over the past year, and it is currently worth nearly $160 billion. That is $10 billion more than Australia’s most valuable company, CBA. Oh, by the way, AirBNB lost $5.8bn in the 2020 fiscal year. In fact, it’s never reported a profit after tax. By comparison, CBA makes nearly $10 billion profit per year.

The big question is; is this the new normal? Is cryptocurrency the next big thing? Is profit and cash flow no longer an important metric when valuing a business?

Cryptical cryptocurrency
I am no expert when it comes to cryptocurrency. In fact, I admit that I know very little about it. But, then again, I have never spent much time researching it because it fails a few basic fundamental tests.

When contemplating an investment, it is important to form a view about the future demand for the product or asset involved. It’s not enough that its currently popular. You must ensure it will continue to be popular. Therefore, we must ask ourselves; who’s using cryptocurrency today and why? As far as I can see, at the moment, cryptocurrency is held solely for speculative purposes. Very few people are actually using it as a substitute for traditional currencies. The one exception to this may be money launderers.

According to the theory of diffusion of innovation, for cryptocurrency to become a sustainable alternative currency, it must be widely adopted. Renowned author, Dr Geoff Moore argues that there is a large chasm between ‘early adopters’ and the ‘early majority’. A product must cross this chasm in order to become self-sustainable.

There are two major impediments stopping cryptocurrency from crossing the chasm
Firstly, cryptocurrency is extremely volatile. The share market’s volatility rate is approximately 20% p.a. compared to Bitcoin at just shy of 50% p.a. On average, Bitcoin’s daily volatility rate is 3% i.e. the price changes on average by 3%. Therefore, if you agree to buy some goods, when it comes to paying for them in 7 days’ time those, goods could end up costing you nearly 20% more!

For cryptocurrency to achieve wide adoption, its volatility rate needs to be around 4-5% p.a. – one tenth of what it currently is!

Secondly, one of cryptocurrency’s selling points is its anonymity. You can hold cryptocurrency without revealing anything about your identity. That makes it a perfect exchange for criminals to use. Governments around the world would have a lot to lose if cryptocurrency was widely used. It would be difficult to operate their tax surveillance activities and it would make policing criminal activity more difficult. If this occurred, governments would start regulating cryptocurrencies in the same way they regulate traditional currencies.

A market dominated by speculators
You must invest in assets that have application other than wealth accumulation. For example, investing in property in a location that is dominated by owner-occupiers is a wise strategy. If the investment market dries up for any reason, demand for property in that location will remain largely intact.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss b8b495b2-e869-4dfd-9fe8-3978ec073745 Wed, 10 Mar 2021 09:00:00 +1100 996 Investopoly,rules of the lending game,wemyss,bitcoin,tech stocks,share investing,share market,cryptocurrency 1 152 false What's involved in changing accountants (and how to find a good one)? What's involved in changing accountants (and how to find a good one)? Choosing the right accountant can make a world of difference. A proactive accountant will share tax-saving and wealth-building ideas, be available to answer questions during the year and ensure you never end up in the ATO’s ‘bad-books’.

Common complaints
There are two common complaints about accountants.

Firstly, that they don’t provide proactive advice, including wealth building ideas. They are so involved in their day-to-day work that they don’t stop to ask themselves; “if I was in this client’s position, what would I do?” This is an incredibly valuable question to ask. Most clients want to feel confident that if they are missing any opportunities, that their accountant will point them out.

The second most common complaint is that they are not quick to turn work around. This includes replying to emails/phone calls and completing compliance work such as tax returns. Such delays can cost clients a lot in terms of missed opportunities, delayed decision making and make it difficult to implement financial plans.

What's involved in switching accountants?
Switching accountants is actually a very simple and easy task.

Once you have agreed to appoint a new accountant as your tax agent, they will immediately write to your incumbent accountant for two reasons:
1. To confirm that there are no ethical considerations that may prevent them from accepting you as a new client – this is referred to as an ‘ethical clearance letter’ and is common in the accounting industry; and
2. Request the transfer of your documentation including most recent year’s tax returns, any financial statements, accounting system access, depreciation and cost base schedules, entity documentation such as Corporate Constitutions for companies, Trust Deeds and so on.

As a matter of professional courtesy, virtually all accountants respond to such requests promptly and often without contacting their (past) client. If you owe any outstanding fees, it is commonplace for an accountant to withhold their clearance letter until all fees are paid in full.

Apart from signing an engagement letter with your new accountant, there is nothing you need to do.

Do you have to tell the accountant you're leaving?
The short answer is no. There is no obligation to have any contact with your incumbent accountant.

If you are self-employed or operate a small business, you may have a close relationship with your accountant and are in more regular contact with them. In this situation, it may be courteous that you inform them of your plans to move to a new accountant, before any ethical clearance letters are set out.

But there is certainly no obligation to do so, and very much depends on your relationship with them and the circumstances surrounding your departure.

What will my new accountant do after they are appointed?
I can’t speak for other accountants but typically there are a few steps we take when a new client appoints us, namely:
§ Update the ATO’s records so that it knows that we are your new tax agent and where to send future correspondence. It may be necessary to update other registrations also, such as ASIC if you have a company.
§ Review past tax returns and schedules to identify any mistakes, omissions or planning matters. This is even more important if you have a trading business, as there are more matters to consider.
§ Once we have completed a review, we will be in a position to set out your key milestones, which could include the date when we will undertake tax planning, when we will require your information to start preparing your next return and so on.

Does ch

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Choosing the right accountant can make a world of difference. A proactive accountant will share tax-saving and wealth-building ideas, be available to answer questions during the year and ensure you never end up in the ATO’s ‘bad-books’.

Common complaints
There are two common complaints about accountants.

Firstly, that they don’t provide proactive advice, including wealth building ideas. They are so involved in their day-to-day work that they don’t stop to ask themselves; “if I was in this client’s position, what would I do?” This is an incredibly valuable question to ask. Most clients want to feel confident that if they are missing any opportunities, that their accountant will point them out.

The second most common complaint is that they are not quick to turn work around. This includes replying to emails/phone calls and completing compliance work such as tax returns. Such delays can cost clients a lot in terms of missed opportunities, delayed decision making and make it difficult to implement financial plans.

What's involved in switching accountants?
Switching accountants is actually a very simple and easy task.

Once you have agreed to appoint a new accountant as your tax agent, they will immediately write to your incumbent accountant for two reasons:
1. To confirm that there are no ethical considerations that may prevent them from accepting you as a new client – this is referred to as an ‘ethical clearance letter’ and is common in the accounting industry; and
2. Request the transfer of your documentation including most recent year’s tax returns, any financial statements, accounting system access, depreciation and cost base schedules, entity documentation such as Corporate Constitutions for companies, Trust Deeds and so on.

As a matter of professional courtesy, virtually all accountants respond to such requests promptly and often without contacting their (past) client. If you owe any outstanding fees, it is commonplace for an accountant to withhold their clearance letter until all fees are paid in full.

Apart from signing an engagement letter with your new accountant, there is nothing you need to do.

Do you have to tell the accountant you're leaving?
The short answer is no. There is no obligation to have any contact with your incumbent accountant.

If you are self-employed or operate a small business, you may have a close relationship with your accountant and are in more regular contact with them. In this situation, it may be courteous that you inform them of your plans to move to a new accountant, before any ethical clearance letters are set out.

But there is certainly no obligation to do so, and very much depends on your relationship with them and the circumstances surrounding your departure.

What will my new accountant do after they are appointed?
I can’t speak for other accountants but typically there are a few steps we take when a new client appoints us, namely:
§ Update the ATO’s records so that it knows that we are your new tax agent and where to send future correspondence. It may be necessary to update other registrations also, such as ASIC if you have a company.
§ Review past tax returns and schedules to identify any mistakes, omissions or planning matters. This is even more important if you have a trading business, as there are more matters to consider.
§ Once we have completed a review, we will be in a position to set out your key milestones, which could include the date when we will undertake tax planning, when we will require your information to start preparing your next return and so on.

Does ch

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss ad6667a7-97a0-45dc-abbd-00defd119942 Wed, 03 Mar 2021 09:00:00 +1100 769 wemyss,investopoly,rules of the lending game,tax,saving tax,business,accountants,tax advice,business advice,holistic accountant, 1 151 false Steppingstone strategy: how to buy your dream home Steppingstone strategy: how to buy your dream home If the recent property price growth predictions become reality over the next couple of years, more homeowners may become ‘priced out’ of their desired location. What might be affordable today, could quickly become unaffordable, as prices can rise quickly.

Sometimes it’s not possible to buy your dream home in one fell swoop. But do not despair. A steppingstone strategy could be the solution.

Buying a dream home has always been a struggle, embrace it
Property has always seemed expensive. I bought my first property 23 years ago for $150,000 and it was a big deal. It was a stretch, financially. It was a dump that needed renovating.

Getting onto the property ladder and buying your dream home will take work. Some sacrifices. A little bit of hustling. But that has always been the case. Focus on the solutions, not the problems.

Focus on building your deposit/equity
If you are income-rich but asset poor, you need to build equity to extend your purchasing power. That equity could come in the form of cash savings/deposit or equity in an existing property.

If your income earning capacity is limited, then accumulating more equity reduces the amount you need to borrow and as such, you are closer to being able to buy your dream home.

Either way, your sole goal should be to build equity.

How to implement a steppingstone strategy
A steppingstone strategy involves buying an owner-occupier property with the sole aim of accumulating as much equity as possible, as fast as possible. Then, selling that property and using the equity to upgrade to a superior property. And continuing to do that until you have attained your dream home.

There are three key steps to this strategy.

Step 1: Pick a location that has attractive short term growth prospects
Buying a property in a location that is popular and is enjoying rising property price momentum can do a lot of the heavy lifting for you.

The goal is to create equity as soon as possible. Therefore, it’s not as important to form a view about a given location’s long term growth prospects, unlike when buying a pure investment property. You just want to form a view about whether the price momentum will continue in the short term.

Typically, locations that are gentrifying will exhibit above average growth rates. Gentrifying suburbs tend to have similar themes such as a changing demographic, increased renovation activity, new infrastructure and/or amenities that enhance the community feel (liveability) of the location and so on.

Whilst it’s important to not buy at the peak of the market i.e. after prices have risen as much as they will, it is equally too risky to try to pick the next growth suburb, because you could be wrong. Essentially, you want recent evidence that the rising demand for the location is generating price growth. And that prices still have some future upside.

Step 2: Buy an older house with scope to manufacture equity
Often, but not always, it is best to buy a house instead of a townhouse, villa unit or apartment. Firstly, houses tend to have proportionately more land value. Secondly, houses tend to offer more scope to improve their overall value e.g. renovation of bathrooms and kitchens, landscaping, adding a room/living area and so on. This is called manufacturing equity when the property’s value appreciates by more than the cost of the improvements made.

Older houses (e.g. built pre-1970’s) offer better opportunities than newer ones, because there tends to be greater scope to ma

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> If the recent property price growth predictions become reality over the next couple of years, more homeowners may become ‘priced out’ of their desired location. What might be affordable today, could quickly become unaffordable, as prices can rise quickly.

Sometimes it’s not possible to buy your dream home in one fell swoop. But do not despair. A steppingstone strategy could be the solution.

Buying a dream home has always been a struggle, embrace it
Property has always seemed expensive. I bought my first property 23 years ago for $150,000 and it was a big deal. It was a stretch, financially. It was a dump that needed renovating.

Getting onto the property ladder and buying your dream home will take work. Some sacrifices. A little bit of hustling. But that has always been the case. Focus on the solutions, not the problems.

Focus on building your deposit/equity
If you are income-rich but asset poor, you need to build equity to extend your purchasing power. That equity could come in the form of cash savings/deposit or equity in an existing property.

If your income earning capacity is limited, then accumulating more equity reduces the amount you need to borrow and as such, you are closer to being able to buy your dream home.

Either way, your sole goal should be to build equity.

How to implement a steppingstone strategy
A steppingstone strategy involves buying an owner-occupier property with the sole aim of accumulating as much equity as possible, as fast as possible. Then, selling that property and using the equity to upgrade to a superior property. And continuing to do that until you have attained your dream home.

There are three key steps to this strategy.

Step 1: Pick a location that has attractive short term growth prospects
Buying a property in a location that is popular and is enjoying rising property price momentum can do a lot of the heavy lifting for you.

The goal is to create equity as soon as possible. Therefore, it’s not as important to form a view about a given location’s long term growth prospects, unlike when buying a pure investment property. You just want to form a view about whether the price momentum will continue in the short term.

Typically, locations that are gentrifying will exhibit above average growth rates. Gentrifying suburbs tend to have similar themes such as a changing demographic, increased renovation activity, new infrastructure and/or amenities that enhance the community feel (liveability) of the location and so on.

Whilst it’s important to not buy at the peak of the market i.e. after prices have risen as much as they will, it is equally too risky to try to pick the next growth suburb, because you could be wrong. Essentially, you want recent evidence that the rising demand for the location is generating price growth. And that prices still have some future upside.

Step 2: Buy an older house with scope to manufacture equity
Often, but not always, it is best to buy a house instead of a townhouse, villa unit or apartment. Firstly, houses tend to have proportionately more land value. Secondly, houses tend to offer more scope to improve their overall value e.g. renovation of bathrooms and kitchens, landscaping, adding a room/living area and so on. This is called manufacturing equity when the property’s value appreciates by more than the cost of the improvements made.

Older houses (e.g. built pre-1970’s) offer better opportunities than newer ones, because there tends to be greater scope to ma

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 96693f2d-70fe-4189-9d82-5187f61d965f Wed, 24 Feb 2021 09:00:00 +1100 924 investopoly,rules of the lending game,wemyss,prosolution private clients,buy your dream home,steppingstone,upgrade your home,build equity, 1 150 false Beware: Not all ETF's (exchange traded funds) are what they seem Beware: Not all ETF's (exchange traded funds) are what they seem Exchange Traded Funds (or ETF’s) have become very popular, particularly over the past 5 years. In fact, the amounts invested in ETF’s has doubled over this time. Last year (2020), Australians invested over $20 billion in ETFs.

It is true that there are some advantages to investing in ETF’s. However, of course, not all ETF’s make good investments and there are some common pitfalls you must be aware of.

What is an ETF?
An ETF is simply a managed fund that is owned in a company structure and that company is listed on the Australian Stock Exchange. The only assets the company holds are the underlying investments. For example, for an ASX200 ETF (such as A200 or IOZ), the company would own the top 200 listed stocks proportionally according to their market capitalisation (value).

You can invest in an ETF using an online share brokage account, such as Commsec.

What are the advantages of ETF’s
Prior to ETF’s, the only way to invest in a managed (or index) fund was directly with the investment manager e.g. Vanguard.

This required you to fill out an application form each time you wanted to make a new investment. The managed fund would charge you a fee each time you invested and/or divested (this is called a buy/sell spread). And some of the lower cost ‘wholesale’ funds were only available to people if they invested a minimum of $500,000.

ETF’s provide a good solution as they allow you to invest in a wholesale managed fund for the cost of a share trade (which can be as low as $10) and no paperwork is required.

ETF’s and LIC’s are different
ETF’s tend to utilise rules-based investment methodologies (commonly referred to as index funds). These products tend to have two common characteristics. Firstly, they are very low-cost. Investment management fees are typically below 0.40% p.a. (some as low as 0.04% p.a.) Secondly, they tend to be very well diversified. You can find a list of all ETF products here.

However, Listed Investment Companies (or LIC’s) are distinctly different as they tend to employ active funds management (remember that few active funds outperform their indexes in the long run). This means these funds can be more concentrated (less diversification) and tend to charge higher investment fees.

Beware that they are designed for retail investors
ETF’s are mainly used by retail investors (DIY investors), but a growing number of financial advisors have started to use them. In the US, substantially more institutional investors (such as large super funds) use ETF’s, but this trend has now occurred in Australia. This creates a few notable consequences.

Firstly, ETF providers will promote products that align with ‘popular’ themes such as investing in technology. Popular investments attract more investors and the more money an ETF attracts, the more fees the ETF provider generates. However, we all know that what is popular doesn’t always make a sound investment. In fact, it is proven (empirical data) that investors that chase trends t

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Exchange Traded Funds (or ETF’s) have become very popular, particularly over the past 5 years. In fact, the amounts invested in ETF’s has doubled over this time. Last year (2020), Australians invested over $20 billion in ETFs.

It is true that there are some advantages to investing in ETF’s. However, of course, not all ETF’s make good investments and there are some common pitfalls you must be aware of.

What is an ETF?
An ETF is simply a managed fund that is owned in a company structure and that company is listed on the Australian Stock Exchange. The only assets the company holds are the underlying investments. For example, for an ASX200 ETF (such as A200 or IOZ), the company would own the top 200 listed stocks proportionally according to their market capitalisation (value).

You can invest in an ETF using an online share brokage account, such as Commsec.

What are the advantages of ETF’s
Prior to ETF’s, the only way to invest in a managed (or index) fund was directly with the investment manager e.g. Vanguard.

This required you to fill out an application form each time you wanted to make a new investment. The managed fund would charge you a fee each time you invested and/or divested (this is called a buy/sell spread). And some of the lower cost ‘wholesale’ funds were only available to people if they invested a minimum of $500,000.

ETF’s provide a good solution as they allow you to invest in a wholesale managed fund for the cost of a share trade (which can be as low as $10) and no paperwork is required.

ETF’s and LIC’s are different
ETF’s tend to utilise rules-based investment methodologies (commonly referred to as index funds). These products tend to have two common characteristics. Firstly, they are very low-cost. Investment management fees are typically below 0.40% p.a. (some as low as 0.04% p.a.) Secondly, they tend to be very well diversified. You can find a list of all ETF products here.

However, Listed Investment Companies (or LIC’s) are distinctly different as they tend to employ active funds management (remember that few active funds outperform their indexes in the long run). This means these funds can be more concentrated (less diversification) and tend to charge higher investment fees.

Beware that they are designed for retail investors
ETF’s are mainly used by retail investors (DIY investors), but a growing number of financial advisors have started to use them. In the US, substantially more institutional investors (such as large super funds) use ETF’s, but this trend has now occurred in Australia. This creates a few notable consequences.

Firstly, ETF providers will promote products that align with ‘popular’ themes such as investing in technology. Popular investments attract more investors and the more money an ETF attracts, the more fees the ETF provider generates. However, we all know that what is popular doesn’t always make a sound investment. In fact, it is proven (empirical data) that investors that chase trends t

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 51f3065f-1a84-47c1-b491-ffbf9ab3f69f Wed, 17 Feb 2021 09:00:00 +1100 970 rules of the lending game,investopoly,wemyss,ETF,ETFs,exchange traded funds,index funds,share investing,investing in shares,financial advice,shares, 1 149 false An investment case for putting all your property eggs in one basket An investment case for putting all your property eggs in one basket It is generally an accepted investment principal that diversification can reduce your risk and improve investment returns. The common vernacular is, spread your eggs amongst various baskets. I would agree with this principle, so long as it doesn't result in deterioration of investment asset quality.

Sometimes property investors should not diversify. That's because the quality of your investments, will determine your future investment returns. You cannot expect to invest in average quality assets and expect to generate above average quality returns. If you're going to invest in property, you are much better off to buy one very high-quality property, than two average quality properties.

To be a successful investor, you must invest in the highest quality property that your budget allows.
It is also imperative to recognise that the dollar value appreciation of your property is an important metric which indicates whether you will enjoy a comfortable retirement.

In retirement, we pay for living expenses in dollars, not percentages
The value appreciation of property in dollar terms is an important metric. Whilst we can’t use capital growth to pay for living expenses, unless we sell the property, it still impacts our overall wealth. For example, if a retiree had $1,000,000 of super and wanted to spend $100,000 per year, they risk running out of super within 10 years (ignoring future investment earnings for simplicity). However, if at the same time, their property portfolio was appreciating by $200,000 per year, they are actually in a relatively strong financial position.

In 1991, 30 years ago, the median house price appreciated by around $10,000 per year – which is equivalent to $20,000 in today’s dollars (i.e., after adjusting for inflation). Since the average self-funded retiree spends circa $100,000 per year, this property appreciation ($20,000) is equivalent to 2.5 months of living expenses.

At the moment, the average median house price across Melbourne and Sydney is around $1,000,000. Assuming the median property appreciates by approximately 6% per annum (on average, over the long run), that equates to a dollar value rise of $60,000 (i.e., 6% of $1 million). That is equivalent to over 7 months of living expenses.

Annual property price appreciation in real dollar terms over the past 30 years
The chart below illustrates the historic change in median property price between 1991 and 2021, adjusted for inflation, that is, in today's dollars. The chart also includes a projection of how the median property price might appreciate over the next 30 years, assuming a growth rate of 6.50% p.a. and an inflation rate of 1.50% p.a.

This chart suggests that the median property value might be appreciating at a rate of over a $100,000 per year by around year 2030-2033 in today's dollars. And by 2045, the median property price may be appreciating by circa $200,000 in today's dollars – equivalent to two years of living expenses.

Putting aside liquidity considerations, this suggests that if you're at least 15 to 20 years away from retirement, that investing in one investment grade property could be sufficient to assist in funding your retirement.



What does this mean for investors?
When it comes to investing in property, quality matters a lot more than quantity. The above chart suggests that owning one investment property (worth $1m or more) might be sufficient.

Some investors are obsessed with acquiring a multi-property portfolio. They express their investment goals in terms of the number of properties, rather than their financial performance. Having such a goal does not encourage you to focus

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> It is generally an accepted investment principal that diversification can reduce your risk and improve investment returns. The common vernacular is, spread your eggs amongst various baskets. I would agree with this principle, so long as it doesn't result in deterioration of investment asset quality.

Sometimes property investors should not diversify. That's because the quality of your investments, will determine your future investment returns. You cannot expect to invest in average quality assets and expect to generate above average quality returns. If you're going to invest in property, you are much better off to buy one very high-quality property, than two average quality properties.

To be a successful investor, you must invest in the highest quality property that your budget allows.
It is also imperative to recognise that the dollar value appreciation of your property is an important metric which indicates whether you will enjoy a comfortable retirement.

In retirement, we pay for living expenses in dollars, not percentages
The value appreciation of property in dollar terms is an important metric. Whilst we can’t use capital growth to pay for living expenses, unless we sell the property, it still impacts our overall wealth. For example, if a retiree had $1,000,000 of super and wanted to spend $100,000 per year, they risk running out of super within 10 years (ignoring future investment earnings for simplicity). However, if at the same time, their property portfolio was appreciating by $200,000 per year, they are actually in a relatively strong financial position.

In 1991, 30 years ago, the median house price appreciated by around $10,000 per year – which is equivalent to $20,000 in today’s dollars (i.e., after adjusting for inflation). Since the average self-funded retiree spends circa $100,000 per year, this property appreciation ($20,000) is equivalent to 2.5 months of living expenses.

At the moment, the average median house price across Melbourne and Sydney is around $1,000,000. Assuming the median property appreciates by approximately 6% per annum (on average, over the long run), that equates to a dollar value rise of $60,000 (i.e., 6% of $1 million). That is equivalent to over 7 months of living expenses.

Annual property price appreciation in real dollar terms over the past 30 years
The chart below illustrates the historic change in median property price between 1991 and 2021, adjusted for inflation, that is, in today's dollars. The chart also includes a projection of how the median property price might appreciate over the next 30 years, assuming a growth rate of 6.50% p.a. and an inflation rate of 1.50% p.a.

This chart suggests that the median property value might be appreciating at a rate of over a $100,000 per year by around year 2030-2033 in today's dollars. And by 2045, the median property price may be appreciating by circa $200,000 in today's dollars – equivalent to two years of living expenses.

Putting aside liquidity considerations, this suggests that if you're at least 15 to 20 years away from retirement, that investing in one investment grade property could be sufficient to assist in funding your retirement.



What does this mean for investors?
When it comes to investing in property, quality matters a lot more than quantity. The above chart suggests that owning one investment property (worth $1m or more) might be sufficient.

Some investors are obsessed with acquiring a multi-property portfolio. They express their investment goals in terms of the number of properties, rather than their financial performance. Having such a goal does not encourage you to focus

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss ee99ba70-c915-484a-b133-c2e8b60bc2fe Wed, 10 Feb 2021 09:00:00 +1100 1058 investopoly,rules of the lending game,wemyss,investment property,capital growth,property,Australian property 1 148 false Good financial decisions are a compounding asset Good financial decisions are a compounding asset One good financial decision will have positive consequences. But five good decisions in a row will be life changing. It will create a lot more than five times the positive outcomes than one good decision will. That’s because good decisions are a compounding asset.

Our lives are a sum total of the choices we have made - Wayne Dyer.
When it comes to building wealth and fulfilling your lifestyles goals, true success comes when you master all six facets: (1) good cash flow management, (2) having a clear and efficient investment strategy, (3) invest in the right assets using the right methodologies, (4) optimising superannuation, (5) minimising tax and (6) protecting your assets for your family’s benefit.

We all know that to achieve a good level of health requires us to focus on optimising our diet, exercise regularly and get plenty of quality sleep. We also realise that we will not achieve our full potential (health wise) by just focusing on only one of these factors. Optimising your finances is the same – a holistic approach yields the best results, which takes several good decisions.

Here are some examples of some good financial decisions you can make.

(a) stop wasting your money
Money is wasted on things that don’t improve your standard of living. The key here is to make conscious financial decisions. If you aren’t conscious about your expenditure, your money will be wasted on things that you really don’t care about.

Holidays are a very good example of conscious expenditure. We tend to get a lot of happiness and satisfaction from holidays. They creates long-lasting memories. And if we stopped spending money on holidays, we’d really miss it.

However, buying takeaway coffee is a good example of unconscious expenditure. They are nice to have, but if you are able to make yourself a cup of coffee at work, you probably won’t miss it. These small expenses tend to add up to a surprising amount. Two takeaway coffees per day might end up costing you more than $10,000 per year! That is more than one investment property’s holding costs!

It is pretty simple to implement good cash flow practices, and it doesn’t have to be a painful process. The fact is that you won’t miss spending money in wasteful items. This blog last year walks you through a simple structure many of my clients use with great success.

(b) invest in the right assets
I believe investing is easy if you stick to sound fundamentals, only adopt evidence-based strategies and never watch the news or read newspapers. That is why I wrote Investopoly – to provide a set of rules, a framework, to guide people down the right path and avoid making financial mistakes.

What you invest in (the asset), and which methodology you chose to adopt, will determine your future returns. In a way, your destiny is determined when the initial decision is made . It only takes one decision to buy the right property or to seek advice. Once that decision is made, its merely a matter of waiting a decade or two for the results to materialise. These ‘decisions’ are incredibly important to get 100% right.

(c) ask for help
Two points. Firstly, you don’t know what you don’t know. Secondly, experience is far more important than knowledge. You can fast track knowledge, but there are no shortcuts with experience. Experience tells you how and when to apply knowledge – you need both to avoid making mistakes.

Therefore, the question is, do you want to make your own mistakes or pay someone that

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> One good financial decision will have positive consequences. But five good decisions in a row will be life changing. It will create a lot more than five times the positive outcomes than one good decision will. That’s because good decisions are a compounding asset.

Our lives are a sum total of the choices we have made - Wayne Dyer.
When it comes to building wealth and fulfilling your lifestyles goals, true success comes when you master all six facets: (1) good cash flow management, (2) having a clear and efficient investment strategy, (3) invest in the right assets using the right methodologies, (4) optimising superannuation, (5) minimising tax and (6) protecting your assets for your family’s benefit.

We all know that to achieve a good level of health requires us to focus on optimising our diet, exercise regularly and get plenty of quality sleep. We also realise that we will not achieve our full potential (health wise) by just focusing on only one of these factors. Optimising your finances is the same – a holistic approach yields the best results, which takes several good decisions.

Here are some examples of some good financial decisions you can make.

(a) stop wasting your money
Money is wasted on things that don’t improve your standard of living. The key here is to make conscious financial decisions. If you aren’t conscious about your expenditure, your money will be wasted on things that you really don’t care about.

Holidays are a very good example of conscious expenditure. We tend to get a lot of happiness and satisfaction from holidays. They creates long-lasting memories. And if we stopped spending money on holidays, we’d really miss it.

However, buying takeaway coffee is a good example of unconscious expenditure. They are nice to have, but if you are able to make yourself a cup of coffee at work, you probably won’t miss it. These small expenses tend to add up to a surprising amount. Two takeaway coffees per day might end up costing you more than $10,000 per year! That is more than one investment property’s holding costs!

It is pretty simple to implement good cash flow practices, and it doesn’t have to be a painful process. The fact is that you won’t miss spending money in wasteful items. This blog last year walks you through a simple structure many of my clients use with great success.

(b) invest in the right assets
I believe investing is easy if you stick to sound fundamentals, only adopt evidence-based strategies and never watch the news or read newspapers. That is why I wrote Investopoly – to provide a set of rules, a framework, to guide people down the right path and avoid making financial mistakes.

What you invest in (the asset), and which methodology you chose to adopt, will determine your future returns. In a way, your destiny is determined when the initial decision is made . It only takes one decision to buy the right property or to seek advice. Once that decision is made, its merely a matter of waiting a decade or two for the results to materialise. These ‘decisions’ are incredibly important to get 100% right.

(c) ask for help
Two points. Firstly, you don’t know what you don’t know. Secondly, experience is far more important than knowledge. You can fast track knowledge, but there are no shortcuts with experience. Experience tells you how and when to apply knowledge – you need both to avoid making mistakes.

Therefore, the question is, do you want to make your own mistakes or pay someone that

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss e9c8b2d1-7611-454f-bcdc-ce5a0257ed9c Wed, 03 Feb 2021 09:00:00 +1100 1085 Investopoly,Rules of the lending game,Wemyss,Good financial decisions,cash flow management,financial plan,investment methodology 1 147 false Can property prices keep rising at the same rate? Can property prices keep rising at the same rate? A common question people ask is, “can property values continue to rise at the same rate which they have over the past 3 to 4 decades?” The short answer is no, they cannot. Mathematically, this is unlikely to occur as incomes are not rising at the same pace.

I came across the interesting graphic/visualisation (below) which sets out how property values have changed in real terms (excluding inflation) since 1970. The surprise for me was how much Canberra prices have risen (thanks, public servants and politicians!) and how attractive Brisbane prices appear.


What has driven growth over the past 3 to 4 decades?
In order to form a view with respect to future property growth, it is important to understand what has driven property values over the past few decades. There have been some events which are unlikely to be repeated. Below are some of the key factors, in no particular order.

Population growth
Australia’s population has been growing at a faster rate than other developed countries, mainly due to higher levels of overseas immigration. Population growth increases demand for housing, especially in capital cities as skilled migrants are attracted to job opportunities.

Increase in access to borrowings
Australians are borrowing 2 to 3 times more than they were in the 1970s. Banking deregulation in the ’80s and ‘90s opened up more competition between lenders and reduced home loan margins i.e. mortgages became cheaper. The tables were turned, and suddenly potential borrowers were being approached (marketed to) by the banks, not the other way around.

Increase in household income
In a family unit, it is a lot more common for both spouses to work compared to fifty years ago. In fact, often it is necessary for both spouses to work in order to afford to live in their desired location. The transition from one to two household incomes has extended property purchasing power.

People are buying their first home later in life
In my experience, most first home buyers are in their late twenties to early thirties. This is partly because homes are relatively unaffordable for younger people in their early twenties.

But also, younger people tend to prefer to focus on their career thereby maximising their income earning capacity before they buy a home and/or have children. This puts them in a relatively stronger financial position compared to first home buyers 50 years ago.

Access to more information
The internet has opened up a wealth of information. People are able to educate themselves about how to build wealth with property, including the advantages of borrowing to invest. This blog is an example of this. I write over 50,000 words a year, sharing almost 20 years of experience, which people can read for free. Such information was non-existent before the 2000s.

More, bigger, better
Drive around a newly developed residential suburb and you will notice that the homes are massive. More bedrooms, bigger living areas and smaller back yards. New home buyers are building larger homes with improved amenities and finishes compared to a few decades ago. These improvements contribute towards the increase in the value of property. The same is true when people renovate existing properties in established locations.

All of the above factors have contributed significantly to property price growth over the past 3 to 4 decades.

Which of these will reoccur over the next 20 plus years?
Some of the above factors will persist, some won’

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> A common question people ask is, “can property values continue to rise at the same rate which they have over the past 3 to 4 decades?” The short answer is no, they cannot. Mathematically, this is unlikely to occur as incomes are not rising at the same pace.

I came across the interesting graphic/visualisation (below) which sets out how property values have changed in real terms (excluding inflation) since 1970. The surprise for me was how much Canberra prices have risen (thanks, public servants and politicians!) and how attractive Brisbane prices appear.


What has driven growth over the past 3 to 4 decades?
In order to form a view with respect to future property growth, it is important to understand what has driven property values over the past few decades. There have been some events which are unlikely to be repeated. Below are some of the key factors, in no particular order.

Population growth
Australia’s population has been growing at a faster rate than other developed countries, mainly due to higher levels of overseas immigration. Population growth increases demand for housing, especially in capital cities as skilled migrants are attracted to job opportunities.

Increase in access to borrowings
Australians are borrowing 2 to 3 times more than they were in the 1970s. Banking deregulation in the ’80s and ‘90s opened up more competition between lenders and reduced home loan margins i.e. mortgages became cheaper. The tables were turned, and suddenly potential borrowers were being approached (marketed to) by the banks, not the other way around.

Increase in household income
In a family unit, it is a lot more common for both spouses to work compared to fifty years ago. In fact, often it is necessary for both spouses to work in order to afford to live in their desired location. The transition from one to two household incomes has extended property purchasing power.

People are buying their first home later in life
In my experience, most first home buyers are in their late twenties to early thirties. This is partly because homes are relatively unaffordable for younger people in their early twenties.

But also, younger people tend to prefer to focus on their career thereby maximising their income earning capacity before they buy a home and/or have children. This puts them in a relatively stronger financial position compared to first home buyers 50 years ago.

Access to more information
The internet has opened up a wealth of information. People are able to educate themselves about how to build wealth with property, including the advantages of borrowing to invest. This blog is an example of this. I write over 50,000 words a year, sharing almost 20 years of experience, which people can read for free. Such information was non-existent before the 2000s.

More, bigger, better
Drive around a newly developed residential suburb and you will notice that the homes are massive. More bedrooms, bigger living areas and smaller back yards. New home buyers are building larger homes with improved amenities and finishes compared to a few decades ago. These improvements contribute towards the increase in the value of property. The same is true when people renovate existing properties in established locations.

All of the above factors have contributed significantly to property price growth over the past 3 to 4 decades.

Which of these will reoccur over the next 20 plus years?
Some of the above factors will persist, some won’

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 4fc7e8f6-bf7d-4d18-85fc-47217f76c545 Wed, 27 Jan 2021 11:36:00 +1100 1439 Wemyss,investopoly,rules of the lending game,property investing,capital growth,property prices,australian property 1 146 false 6 alternatives to savings accounts 6 alternatives to savings accounts Interest rates on savings accounts were over 5% p.a. in 2011… only 10 years ago. Today, you would be lucky to receive more than 0.5% p.a.! That means your savings won’t even keep pace with inflation, let alone provide you with any investment return.

As such, many investors are wondering what to do with their cash savings, other than depositing the money with a bank.

This blog discusses some alternatives to bank deposits. However, please do not make any financial decisions solely on the information contained here. It is general information only and does not consider your unique circumstances. It important that you receive personalised and independent financial advice before investing any monies.

I have listed each investment option in order of risk (the lowest risk options first).

Option 1: Deposit monies in an offset linked to a mortgage
If you have a variable rate mortgage, typically the best use of cash savings is to deposit the monies in a linked offset account. Given home loan interest rates range between 2% and 3.5% (depending on whether it’s a home or investment loan), this will save (or make) you a lot more interest compared to depositing your money in a savings account. Most importantly, it’s a risk-free return. That is, your return will always be equal to the mortgage’s interest rate – there is no risk.

Of course, you should offset non-tax-deductible (home loan) debt first. Once your home loan is fully offset/repaid, you should then offset investment debt.

Sometimes people worry that offsetting an investment loan will reduce their negative gearing tax benefits. However, firstly, negative gearing benefits are relatively small at current interest rates – investors aren’t saving huge amounts of tax anyway. Secondly, if you invest your cash savings elsewhere, you will have to pay tax on any returns (unless one spouse has a low/no income). Therefore, as both options have tax consequences, they net each-other out, and are therefore not relevant.

Option 2: Invest in government and treasury bonds
A bond is a loan instrument where the investor is the lender, and the borrower is the issuer. The federal and state governments issue bonds to raise debt. You can invest in these bonds i.e. in essence you lend money to the government.

Most states have high credit ratings (AA or AAA), which means these bonds are extremely low risk. The federal government has maintained its AAA rating (the highest rating) despite significantly increasing its borrowings over the past year.

Australian government bond index funds are yielding (interest rate) in the range of 2.5% and 3% p.a., which is obviously a lot better than deposit rates.

International bonds typically provide lower income returns and you need to be mindful of foreign exchange rate fluctuations.

Option 3: Invest in Australian corporate bonds
Corporate bonds are similar to government bonds. However, they are issued by companies, often large, listed companies. Corporate bond index funds only invest in investment-grade rated bonds, which means they are relatively low risk, albeit higher risk than government bonds.

Corporate bond index funds are currently yielding between 3% and 3.5% p.a. – sometimes more, depending on the type of fund and how it invests.

Option 4: Invest in hybrid securities
Hybrid securities are issued by the Australian banks. They are instruments that have both bond and share characteristics e.g. th

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Interest rates on savings accounts were over 5% p.a. in 2011… only 10 years ago. Today, you would be lucky to receive more than 0.5% p.a.! That means your savings won’t even keep pace with inflation, let alone provide you with any investment return.

As such, many investors are wondering what to do with their cash savings, other than depositing the money with a bank.

This blog discusses some alternatives to bank deposits. However, please do not make any financial decisions solely on the information contained here. It is general information only and does not consider your unique circumstances. It important that you receive personalised and independent financial advice before investing any monies.

I have listed each investment option in order of risk (the lowest risk options first).

Option 1: Deposit monies in an offset linked to a mortgage
If you have a variable rate mortgage, typically the best use of cash savings is to deposit the monies in a linked offset account. Given home loan interest rates range between 2% and 3.5% (depending on whether it’s a home or investment loan), this will save (or make) you a lot more interest compared to depositing your money in a savings account. Most importantly, it’s a risk-free return. That is, your return will always be equal to the mortgage’s interest rate – there is no risk.

Of course, you should offset non-tax-deductible (home loan) debt first. Once your home loan is fully offset/repaid, you should then offset investment debt.

Sometimes people worry that offsetting an investment loan will reduce their negative gearing tax benefits. However, firstly, negative gearing benefits are relatively small at current interest rates – investors aren’t saving huge amounts of tax anyway. Secondly, if you invest your cash savings elsewhere, you will have to pay tax on any returns (unless one spouse has a low/no income). Therefore, as both options have tax consequences, they net each-other out, and are therefore not relevant.

Option 2: Invest in government and treasury bonds
A bond is a loan instrument where the investor is the lender, and the borrower is the issuer. The federal and state governments issue bonds to raise debt. You can invest in these bonds i.e. in essence you lend money to the government.

Most states have high credit ratings (AA or AAA), which means these bonds are extremely low risk. The federal government has maintained its AAA rating (the highest rating) despite significantly increasing its borrowings over the past year.

Australian government bond index funds are yielding (interest rate) in the range of 2.5% and 3% p.a., which is obviously a lot better than deposit rates.

International bonds typically provide lower income returns and you need to be mindful of foreign exchange rate fluctuations.

Option 3: Invest in Australian corporate bonds
Corporate bonds are similar to government bonds. However, they are issued by companies, often large, listed companies. Corporate bond index funds only invest in investment-grade rated bonds, which means they are relatively low risk, albeit higher risk than government bonds.

Corporate bond index funds are currently yielding between 3% and 3.5% p.a. – sometimes more, depending on the type of fund and how it invests.

Option 4: Invest in hybrid securities
Hybrid securities are issued by the Australian banks. They are instruments that have both bond and share characteristics e.g. th

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss eaaca886-323d-4429-a450-70a96caf150d Wed, 20 Jan 2021 09:00:00 +1100 1101 rules of the lending game,investopoly,wemyss,savings account,offset account,bonds,REIT,shares,financial advice, 1 145 false 6-step process I used to set my personal financial goals for 2021 6-step process I used to set my personal financial goals for 2021 The beginning of a new year is a great time to take stock and set personal and financial goals for the coming year. I wanted to share the process that I use personally. It has worked well for me and of course, I use the same approach when advising my clients too.

It’s particularly useful to undertake this exercise after you have had a break, which most of us do over the Christmas/New Year period. That way you should have enough emotional energy to think and reflect clearly. It’s not a good idea to review finances and set goals if you are tired and in need of rest.

This whole process shouldn’t take more than a couple of hours for most people. This small amount of time is perhaps the best investment you can make in any given year.

Step 1: Review what went well and not so well during 2020
Mistakes tend to offer us the best learning opportunities – when everything goes exactly to plan, we typically learn very little. Therefore, the first step is to review everything that went wrong, or you could have done better last year. That could include not investing when you had the opportunity, not selling assets, wasteful spending and so on.

Procrastination or the inability to make a decision can be just as costly as making the wrong decision. The share market certainly taught us that last year. If you had invested in a world share market index fund in April or May 2020 (i.e. not the bottom of the market), the value of your investment would have increased by more than 20% to date (which equates to an annualised return of 34% p.a.).

Once you have identified any and all mistakes, ask yourself what you can do in the future to avoid repeating them. I like to ‘blame the system, not the person’. That is, don’t blame yourself. Instead, aim to systemise your financial decisions. Set rules that you must follow. As I have written about previously, it is challenging to remain unemotional when decisions involve your own money, so don’t be afraid to ask for help.

Step 2: Review existing investments and any unachieved goals from 2020
The next step is to review all existing investments to ascertain whether any changes need to be made.

Have any investments under-performed, or do you need to take profit on investments that have done well? Do any investment properties require maintenance or are you unsatisfied with your property manager? Do you need to refinance or restructure your mortgages including fixing interest rates? Increase personal insurance? Update your wills? Consolidate superannuation accounts or review its investment performance? These are examples of some of the questions you must ask yourself.

Were there any tasks or goals that you set to achieve during 2020 that were not completed? If so, you’ll need to add these items onto your list for this year.

Step 3: Estimate your surplus investable cash flow for 2021
The next step is to work out how much surplus cash flow you expect to have this year. Remember, the basic principle to successfully build wealth is always spend less than you earn and invest the difference. Or, put diffidently, invest a fixed amount as a priority and spend what’s left over.

I set out the most successful cash flow management banking structure in this blog last year. Almost all of my clients use this structure and have found it to be very successful and a painless way to eliminate any wasteful expenditure1. It also allows them to manage

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> The beginning of a new year is a great time to take stock and set personal and financial goals for the coming year. I wanted to share the process that I use personally. It has worked well for me and of course, I use the same approach when advising my clients too.

It’s particularly useful to undertake this exercise after you have had a break, which most of us do over the Christmas/New Year period. That way you should have enough emotional energy to think and reflect clearly. It’s not a good idea to review finances and set goals if you are tired and in need of rest.

This whole process shouldn’t take more than a couple of hours for most people. This small amount of time is perhaps the best investment you can make in any given year.

Step 1: Review what went well and not so well during 2020
Mistakes tend to offer us the best learning opportunities – when everything goes exactly to plan, we typically learn very little. Therefore, the first step is to review everything that went wrong, or you could have done better last year. That could include not investing when you had the opportunity, not selling assets, wasteful spending and so on.

Procrastination or the inability to make a decision can be just as costly as making the wrong decision. The share market certainly taught us that last year. If you had invested in a world share market index fund in April or May 2020 (i.e. not the bottom of the market), the value of your investment would have increased by more than 20% to date (which equates to an annualised return of 34% p.a.).

Once you have identified any and all mistakes, ask yourself what you can do in the future to avoid repeating them. I like to ‘blame the system, not the person’. That is, don’t blame yourself. Instead, aim to systemise your financial decisions. Set rules that you must follow. As I have written about previously, it is challenging to remain unemotional when decisions involve your own money, so don’t be afraid to ask for help.

Step 2: Review existing investments and any unachieved goals from 2020
The next step is to review all existing investments to ascertain whether any changes need to be made.

Have any investments under-performed, or do you need to take profit on investments that have done well? Do any investment properties require maintenance or are you unsatisfied with your property manager? Do you need to refinance or restructure your mortgages including fixing interest rates? Increase personal insurance? Update your wills? Consolidate superannuation accounts or review its investment performance? These are examples of some of the questions you must ask yourself.

Were there any tasks or goals that you set to achieve during 2020 that were not completed? If so, you’ll need to add these items onto your list for this year.

Step 3: Estimate your surplus investable cash flow for 2021
The next step is to work out how much surplus cash flow you expect to have this year. Remember, the basic principle to successfully build wealth is always spend less than you earn and invest the difference. Or, put diffidently, invest a fixed amount as a priority and spend what’s left over.

I set out the most successful cash flow management banking structure in this blog last year. Almost all of my clients use this structure and have found it to be very successful and a painless way to eliminate any wasteful expenditure1. It also allows them to manage

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 6fffc445-2cab-4e5a-993a-4df45ae3b23d Wed, 13 Jan 2021 09:00:00 +1100 1598 Investopoly,wemyss,rules of the lending game,goals,2021,goal setting,financial plan,financial advice,property investing,share market,investing in shares, 1 144 false Four reasons the property market will take off in 2021 Four reasons the property market will take off in 2021 During 2020, most economists and commentators predicted that property values would plummet by 10%, 20% or even 30%! In May I wrote a blog outlining the reasons why I disagreed with these overly bearish forecasts. We now know that property prices didn’t fall by any more than 2% to 3% and have since recovered.

In 2021, I predict the property market rhetoric will switch from “values will fall” to “values are too high”! The media will start saying that property prices are too high, they’re over-valued and so on. Again, they will be wrong. Be prepared to expect and ignore this useless hyperbole.

Here are 4 reasons that we should expect a very strong market next year.

(1) The past 5 years have been below average
The property market needs to make up for the past 5 years of lacklustre growth. According to the Real Estate Institute of Australia, on average, median house prices in Melbourne and Sydney have appreciated by a measly 2.85% p.a. in the 5 years ended June 2020. That is well below the average growth rate of 7.5% p.a. over the past 40 years (Melbourne and Sydney). We know that all markets have a strong trend of mean-reversion. That is, periods of below trend growth are typically followed by periods of above trend growth.

Over the past 5 years the property market has had to navigate a number of unique and significant events. Severe tightening in credit occurred throughout 2015, 2016 and 2018. During 2018 and 2019, the market had to digest the potential impact resulting from the banning of negative gearing and higher CGT as proposed by the ALP (remember, the ALP were tipped as clear winners). As we all know, in 2020, the market had to deal with the impact of Covid.

These three major events have occurred consecutively over the past 5 years, hence the below trend growth. Investors should take comfort from the fact that property has actually performed relatively well considering the circumstances.

(2) Low interest rates inflate asset values
Low interest rate settings are put in place by governments to stimulate economic activity. Low interest rates encourage businesses and consumers to increase spending (because their interest expense falls) and investment (because money is cheap). The cost to hold assets, such as property, is reduced and as such these assets tend to rise in value. It’s a commonly acceptable economic principal.

I wrote a blog in May this year citing that in many situations, it’s cheaper to own property than rent it. Since May, rates have fallen further, especially for owner-occupiers. This phenomenon won’t last for long. Property values will rise until, once again, it’s cheaper to rent than own. This would have happened already if it wasn’t for the event of recent years (discussed above).

The government has slated some substantial changes to credit laws which could significantly increase borrowing capacities from March 2021. If this becomes reality, it will further fuel the impact of low interest rates.

(3) There’s plenty of support for the property market by banks and governments
In November, the property market benefited from a number of changes announced by state and federal governments.

The federal government extended its HomeBuilder package that was set to expire at the end of 2020. NSW announced that it will seek to

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> During 2020, most economists and commentators predicted that property values would plummet by 10%, 20% or even 30%! In May I wrote a blog outlining the reasons why I disagreed with these overly bearish forecasts. We now know that property prices didn’t fall by any more than 2% to 3% and have since recovered.

In 2021, I predict the property market rhetoric will switch from “values will fall” to “values are too high”! The media will start saying that property prices are too high, they’re over-valued and so on. Again, they will be wrong. Be prepared to expect and ignore this useless hyperbole.

Here are 4 reasons that we should expect a very strong market next year.

(1) The past 5 years have been below average
The property market needs to make up for the past 5 years of lacklustre growth. According to the Real Estate Institute of Australia, on average, median house prices in Melbourne and Sydney have appreciated by a measly 2.85% p.a. in the 5 years ended June 2020. That is well below the average growth rate of 7.5% p.a. over the past 40 years (Melbourne and Sydney). We know that all markets have a strong trend of mean-reversion. That is, periods of below trend growth are typically followed by periods of above trend growth.

Over the past 5 years the property market has had to navigate a number of unique and significant events. Severe tightening in credit occurred throughout 2015, 2016 and 2018. During 2018 and 2019, the market had to digest the potential impact resulting from the banning of negative gearing and higher CGT as proposed by the ALP (remember, the ALP were tipped as clear winners). As we all know, in 2020, the market had to deal with the impact of Covid.

These three major events have occurred consecutively over the past 5 years, hence the below trend growth. Investors should take comfort from the fact that property has actually performed relatively well considering the circumstances.

(2) Low interest rates inflate asset values
Low interest rate settings are put in place by governments to stimulate economic activity. Low interest rates encourage businesses and consumers to increase spending (because their interest expense falls) and investment (because money is cheap). The cost to hold assets, such as property, is reduced and as such these assets tend to rise in value. It’s a commonly acceptable economic principal.

I wrote a blog in May this year citing that in many situations, it’s cheaper to own property than rent it. Since May, rates have fallen further, especially for owner-occupiers. This phenomenon won’t last for long. Property values will rise until, once again, it’s cheaper to rent than own. This would have happened already if it wasn’t for the event of recent years (discussed above).

The government has slated some substantial changes to credit laws which could significantly increase borrowing capacities from March 2021. If this becomes reality, it will further fuel the impact of low interest rates.

(3) There’s plenty of support for the property market by banks and governments
In November, the property market benefited from a number of changes announced by state and federal governments.

The federal government extended its HomeBuilder package that was set to expire at the end of 2020. NSW announced that it will seek to

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 5ec90512-728d-4bf7-a847-52603632d1fc Wed, 16 Dec 2020 09:00:00 +1100 1002 investopoly,rules of the lending game,wemyss,investment property,property 2021,property growth in 2021,investment-grade,investment grade property,property capital growth,low interest rates,mean reversion, 1 143 false How much should you spend on investment property maintenance and improvements? How much should you spend on investment property maintenance and improvements? One of the advantages of investing in property is that you can make improvements to enhance its value and consequently your personal wealth. A disadvantage is that dwellings require ongoing maintenance, and this expense reduces an investment property’s cash flow.

Minimising or avoiding maintenance costs is often a false economy. Maintenance cannot be avoided, only deferred. Problems either remain unresolved or they get worse. Either way, you will have to complete the maintenance at some stage or accept a lower (eventual) sale price, as most potential purchasers will factor in these costs.

How much should you spend on maintenance and improvements?
As a general rule-of-thumb, it is a reasonable expectation to spend circa 0.40% to 0.75% p.a. of a property’s value on ongoing maintenance. You may not need to spend that each year, but over a 10-year period, that would not be an unrealistic expectation. Houses tend to require more maintenance than apartments.

Items that increase rental income
It is important to ensure that your property is in good tenantable order so that its comparable to other properties in the surrounding area. Also, it is wise to look for items that will enhance or maximise its rental income. Such items tend to include:
§ Air conditioning, particularly in apartments, is highly desirable and can often increase your weekly rental income by up to $20. That is a pretty good return on investment considering a split system cost around $3k to $4k to install.
§ New carpets.
§ Re-grouting tiles in kitchens and bathrooms. Not only is this good preventative maintenance, but it can have a positive impact on a property’s appeal.
§ Sprucing up bathrooms and kitchens. It is advisable to maintain both the kitchen and bathroom to the same standard, otherwise it looks a bit odd. These projects can be completed cost-effectively by replacing the flooring (e.g. new vinyl), painting cupboard doors and replacing handles, replacing benchtops, appliances, tapware and so on. Avoid full kitchen refits where possible.

The standard of any maintenance and improvements must be in-keeping with the area and in line with tenant expectations.

Items that increase the value of a property
Completing maintenance typically preserves a property’s relative value. However, completing improvements often increases a property’s value, although its typically a once-only improvement.

Some examples of improvements include renovating kitchens and bathrooms, improving natural light (e.g. through painting, installing skylights, etc.), adding a bedroom (for houses). These enhancements can improve a property’s value by more than their cost.

Non-cosmetic expenses such as rewiring, reroofing, plumbing and so on tend to have little to no impact on value, but sometimes they are unavoidable.

Don’t go overboard
You cannot expect a tenant to take good care of your property if you don’t. Therefore, it is important to maintain your property to a good standard, commensurate with tenant and potential purchaser expectations, so that you attract quality tenants.

However, improving a property is a financial decision, not an emotional one. You don’t need to put in marble kitchen benchtops and European appliances. It must be durable and attractive whilst also being cost-effective and good value for money.

Apartments: common areas and facade
If you own an apartment, you will know that the Owners’ Corporation is responsible for maintaining common areas and the building.

It is important that these are adequately maintained to improve street-appeal, security and structural integrity. Also, where poss

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> One of the advantages of investing in property is that you can make improvements to enhance its value and consequently your personal wealth. A disadvantage is that dwellings require ongoing maintenance, and this expense reduces an investment property’s cash flow.

Minimising or avoiding maintenance costs is often a false economy. Maintenance cannot be avoided, only deferred. Problems either remain unresolved or they get worse. Either way, you will have to complete the maintenance at some stage or accept a lower (eventual) sale price, as most potential purchasers will factor in these costs.

How much should you spend on maintenance and improvements?
As a general rule-of-thumb, it is a reasonable expectation to spend circa 0.40% to 0.75% p.a. of a property’s value on ongoing maintenance. You may not need to spend that each year, but over a 10-year period, that would not be an unrealistic expectation. Houses tend to require more maintenance than apartments.

Items that increase rental income
It is important to ensure that your property is in good tenantable order so that its comparable to other properties in the surrounding area. Also, it is wise to look for items that will enhance or maximise its rental income. Such items tend to include:
§ Air conditioning, particularly in apartments, is highly desirable and can often increase your weekly rental income by up to $20. That is a pretty good return on investment considering a split system cost around $3k to $4k to install.
§ New carpets.
§ Re-grouting tiles in kitchens and bathrooms. Not only is this good preventative maintenance, but it can have a positive impact on a property’s appeal.
§ Sprucing up bathrooms and kitchens. It is advisable to maintain both the kitchen and bathroom to the same standard, otherwise it looks a bit odd. These projects can be completed cost-effectively by replacing the flooring (e.g. new vinyl), painting cupboard doors and replacing handles, replacing benchtops, appliances, tapware and so on. Avoid full kitchen refits where possible.

The standard of any maintenance and improvements must be in-keeping with the area and in line with tenant expectations.

Items that increase the value of a property
Completing maintenance typically preserves a property’s relative value. However, completing improvements often increases a property’s value, although its typically a once-only improvement.

Some examples of improvements include renovating kitchens and bathrooms, improving natural light (e.g. through painting, installing skylights, etc.), adding a bedroom (for houses). These enhancements can improve a property’s value by more than their cost.

Non-cosmetic expenses such as rewiring, reroofing, plumbing and so on tend to have little to no impact on value, but sometimes they are unavoidable.

Don’t go overboard
You cannot expect a tenant to take good care of your property if you don’t. Therefore, it is important to maintain your property to a good standard, commensurate with tenant and potential purchaser expectations, so that you attract quality tenants.

However, improving a property is a financial decision, not an emotional one. You don’t need to put in marble kitchen benchtops and European appliances. It must be durable and attractive whilst also being cost-effective and good value for money.

Apartments: common areas and facade
If you own an apartment, you will know that the Owners’ Corporation is responsible for maintaining common areas and the building.

It is important that these are adequately maintained to improve street-appeal, security and structural integrity. Also, where poss

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss edf51423-7df4-4899-9394-cf961dfafcd8 Wed, 09 Dec 2020 09:00:00 +1100 927 investopoly,wemyss,rules of the lending game,holistic accountant,investment property,property development,property renovations,create equity,property management,property investment 1 142 false What has 2020 taught us? Top 5 financial lessons learnt this year. What has 2020 taught us? Top 5 financial lessons learnt this year. Without wanting to seem too philosophical, I believe that life offers us lessons, but we must be prepared to look for them. As we are approaching the end of 2020, I thought it would be a good idea to reflect on what Covid has taught us about our financial decisions.

I have been very proud of how my clients have stayed-the-course this year. Only one client insisted on selling down some investments when the pandemic hit. To be fair, there were some extenuating circumstances. Thankfully, we helped many clients invest new monies during the peaks of market volatility. Whilst these investments were made with the sole goal of maximising long-term value, their performance to date has been very rewarding.

I wanted to share some important lessons that I think the Covid experience has offered us (even as a reminder).

Expect markets to crash
Market corrections are not uncommon. They seem to occur every 8 to 12 years. Of course, the cause of these corrections is always different, unique and completely unpredictable. That’s why they cause a lot of volatility, because the market gets spooked by an event it didn’t or couldn’t have anticipated. And that’s why it always feels like “this time is different”.

Whilst every crash feels different, they are all the same. Firstly, the market overreacts, and all investments are punished, almost regardless of quality and outlook. In March, everything fell in value – shares, bonds, gold… everything! But the reality is that a crisis will impact some asset classes to a greater extent.

Secondly, markets tend to rebound much faster than we expect, which is evident in this chart I shared in a blog at the beginning of March.

The lesson is to be ready for times of very high uncertainty. Stay the course. Don’t let these events tempt you to make any rash decisions i.e. selling. If appropriate, be prepared to make additional investments.

In the midst of a crisis, focus on the long term
In times of a crisis, it’s difficult to focus on the long term because it’s hard to visualise how the crisis might play out. However, despite that, there is great value in sticking to the long game.

For example, the world share index has generated good returns over the long run i.e. 10.7% p.a. between 1970 and 2019 to be exact. Investing in an index like this during a crisis might not generate above average returns in one month’s time, or even one years’ time. But because we know that markets always rebound strongly within a 5-year period after a crisis, it is likely it will generate above average returns in the medium term. It is this approach that serves investors well.

And this is the approach I adopted when investing clients’ monies during March, April and May (and anytime really). I invested in a way that aimed to maximise medium to long term returns. I was not focused on trying to generate short term profits. However, as it turns out, the result in the short term have been fantastic.

The lesson is that focusing on the long run helps people make investment decisions during times of (very) high uncertainty. In fact, it’s the only option, as adopting a short-term outlook tends to be paralysing.

Cash buffers are important
Having plenty of cash savings provides a safety net in case your income unexpectedly falls, or a large expense crops up. I typically advise my clients to hold between 6 and 12 months of living expenses in cash savings. Depending on your financial position and risk appetite, it might be important to hold more.

Whil

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Without wanting to seem too philosophical, I believe that life offers us lessons, but we must be prepared to look for them. As we are approaching the end of 2020, I thought it would be a good idea to reflect on what Covid has taught us about our financial decisions.

I have been very proud of how my clients have stayed-the-course this year. Only one client insisted on selling down some investments when the pandemic hit. To be fair, there were some extenuating circumstances. Thankfully, we helped many clients invest new monies during the peaks of market volatility. Whilst these investments were made with the sole goal of maximising long-term value, their performance to date has been very rewarding.

I wanted to share some important lessons that I think the Covid experience has offered us (even as a reminder).

Expect markets to crash
Market corrections are not uncommon. They seem to occur every 8 to 12 years. Of course, the cause of these corrections is always different, unique and completely unpredictable. That’s why they cause a lot of volatility, because the market gets spooked by an event it didn’t or couldn’t have anticipated. And that’s why it always feels like “this time is different”.

Whilst every crash feels different, they are all the same. Firstly, the market overreacts, and all investments are punished, almost regardless of quality and outlook. In March, everything fell in value – shares, bonds, gold… everything! But the reality is that a crisis will impact some asset classes to a greater extent.

Secondly, markets tend to rebound much faster than we expect, which is evident in this chart I shared in a blog at the beginning of March.

The lesson is to be ready for times of very high uncertainty. Stay the course. Don’t let these events tempt you to make any rash decisions i.e. selling. If appropriate, be prepared to make additional investments.

In the midst of a crisis, focus on the long term
In times of a crisis, it’s difficult to focus on the long term because it’s hard to visualise how the crisis might play out. However, despite that, there is great value in sticking to the long game.

For example, the world share index has generated good returns over the long run i.e. 10.7% p.a. between 1970 and 2019 to be exact. Investing in an index like this during a crisis might not generate above average returns in one month’s time, or even one years’ time. But because we know that markets always rebound strongly within a 5-year period after a crisis, it is likely it will generate above average returns in the medium term. It is this approach that serves investors well.

And this is the approach I adopted when investing clients’ monies during March, April and May (and anytime really). I invested in a way that aimed to maximise medium to long term returns. I was not focused on trying to generate short term profits. However, as it turns out, the result in the short term have been fantastic.

The lesson is that focusing on the long run helps people make investment decisions during times of (very) high uncertainty. In fact, it’s the only option, as adopting a short-term outlook tends to be paralysing.

Cash buffers are important
Having plenty of cash savings provides a safety net in case your income unexpectedly falls, or a large expense crops up. I typically advise my clients to hold between 6 and 12 months of living expenses in cash savings. Depending on your financial position and risk appetite, it might be important to hold more.

Whil

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss c08dd684-1344-4716-b2eb-1293978dc9c8 Wed, 02 Dec 2020 09:00:00 +1100 1190 wemyss,investopoly,rules of the lending game,investment lessons,Covid,Share markets,property investing 1 141 false Don't put your tax deductible interest at risk: 10 rules to follow Don't put your tax deductible interest at risk: 10 rules to follow Interest expenses are often an investors largest tax deduction. You must realise that the onus of proof is on the taxpayer (you), not the ATO. That is, you must be able to prove to the ATO that your deductions are legitimate. If you are not able to do that unequivocally, you risk the tax deduction being denied in full (and you will have to pay interest and penalties).

Therefore, it is wise to understand some basic tax rules so that you do not inadvertently put any of your tax deductions as risk. There is a lot more detail (whole chapter) in my latest book, Rules of the Lending Game, but below is a summary of the top 10 rules that relate to investment loans.

(1) You only get one chance to set the maximum tax-deductible loan
The initial amount you borrow when you first acquire an investment will be the maximum tax-deductible loan amount.

For example, if you purchase a property for $800,000 the total cost of the acquisition will be $845,000 including stamp duty. If you have $300,000 of cash, you need to borrow $545,000. In this situation, $545,000 will be the maximum tax-deductible loan. You cannot go back to the bank and increase the loan at a later stage because the “purpose” determines it tax-deductibility (which I discuss below). A possible solution to this would have been to borrow the full cost and deposit monies in a linked offset – more about this below.

(2) Loan applicants may not have tax consequences
Who’s name the loan is in (i.e. the loan applicants) typically has no impact on the deductibility of the debt. From the perspective of the ATO, especially with spouses, the main determining factor regarding deductibility is (1) who owns the asset in question – i.e. whose name is on the title; and (2) who has been making the repayments.

For example, if the investment property is in the husband’s name but the loan is in joint names, and repayments are being made from a bank account that is solely in the husband’s name, the husband should be entitled to 100 per cent of the tax deduction (Taxation Ruling TR 93/32).

It’s preferable (and cleaner) if you can arrange for the name(s) on the loan to match the name(s) on the title, as this eliminates any doubt. However, some lenders’ policies or procedures might make this difficult, costly (in terms of time or legal costs) or impossible. It’s wise to document why the loan has been established in this way – that is, because the bank declined to set up the loan solely in the owner’s name.

(3) The owner must make loan repayments
A common mistake is that repayments in respect to a loan used to fund an investment in one spouse’s name come from a joint account i.e. in both spouse’s names.

In this situation, the ATO could argue that since both of you have been repaying the loan, the deduction should be split. However, since only one spouse owns the property, only that spouse is entitled to a deduction – and consequently now half of the interest is not tax deductible!

To avoid this risk repayments should be debited to an account that is solely in the owner/s name.

(4) A loan’s security does not matter
The property/s used to secure a loan has no bearing on its tax treatment whatsoever. For example, you could have an investment loan secured by your home and it would still be tax-deductible. The purpose for which the funds are used and who’s been making the repayments will determine the tax-deductibility.

(5) Purpose is king
Ultimately, the biggest determining factor as to whether interest is tax-deductible is the purpose for which the loan funds are used

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Interest expenses are often an investors largest tax deduction. You must realise that the onus of proof is on the taxpayer (you), not the ATO. That is, you must be able to prove to the ATO that your deductions are legitimate. If you are not able to do that unequivocally, you risk the tax deduction being denied in full (and you will have to pay interest and penalties).

Therefore, it is wise to understand some basic tax rules so that you do not inadvertently put any of your tax deductions as risk. There is a lot more detail (whole chapter) in my latest book, Rules of the Lending Game, but below is a summary of the top 10 rules that relate to investment loans.

(1) You only get one chance to set the maximum tax-deductible loan
The initial amount you borrow when you first acquire an investment will be the maximum tax-deductible loan amount.

For example, if you purchase a property for $800,000 the total cost of the acquisition will be $845,000 including stamp duty. If you have $300,000 of cash, you need to borrow $545,000. In this situation, $545,000 will be the maximum tax-deductible loan. You cannot go back to the bank and increase the loan at a later stage because the “purpose” determines it tax-deductibility (which I discuss below). A possible solution to this would have been to borrow the full cost and deposit monies in a linked offset – more about this below.

(2) Loan applicants may not have tax consequences
Who’s name the loan is in (i.e. the loan applicants) typically has no impact on the deductibility of the debt. From the perspective of the ATO, especially with spouses, the main determining factor regarding deductibility is (1) who owns the asset in question – i.e. whose name is on the title; and (2) who has been making the repayments.

For example, if the investment property is in the husband’s name but the loan is in joint names, and repayments are being made from a bank account that is solely in the husband’s name, the husband should be entitled to 100 per cent of the tax deduction (Taxation Ruling TR 93/32).

It’s preferable (and cleaner) if you can arrange for the name(s) on the loan to match the name(s) on the title, as this eliminates any doubt. However, some lenders’ policies or procedures might make this difficult, costly (in terms of time or legal costs) or impossible. It’s wise to document why the loan has been established in this way – that is, because the bank declined to set up the loan solely in the owner’s name.

(3) The owner must make loan repayments
A common mistake is that repayments in respect to a loan used to fund an investment in one spouse’s name come from a joint account i.e. in both spouse’s names.

In this situation, the ATO could argue that since both of you have been repaying the loan, the deduction should be split. However, since only one spouse owns the property, only that spouse is entitled to a deduction – and consequently now half of the interest is not tax deductible!

To avoid this risk repayments should be debited to an account that is solely in the owner/s name.

(4) A loan’s security does not matter
The property/s used to secure a loan has no bearing on its tax treatment whatsoever. For example, you could have an investment loan secured by your home and it would still be tax-deductible. The purpose for which the funds are used and who’s been making the repayments will determine the tax-deductibility.

(5) Purpose is king
Ultimately, the biggest determining factor as to whether interest is tax-deductible is the purpose for which the loan funds are used

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 08347d90-2b88-4e34-ae2a-6edeaa1973e7 Tue, 24 Nov 2020 09:00:00 +1100 1252 rules of the lending game,investopoly,wemyss,interest deduction,save tax,negative gearing,tax deduction,investment deductions,borrowing to invest,loan structire 1 140 false Important insights into a post COVID recovery Important insights into a post COVID recovery Understanding how Covid lockdowns have impacted certain individuals and industries, helps to inform us about how quickly the economy and markets may recover.
With this in mind, I thought it was useful to share a number of charts published recently by the RBA and banks which provide important and interesting insights.
Covid has discriminated against younger workers and lower income earners
Workers between the ages of 15 and 34 account for more than half of the jobs lost (unemployment) to August.


The RBA broke up changes to employment into five groups - from the highest income earners to the lowest earners. As the chart below shows, the lowest paid 40% of Australian's suffered the largest loss of employment (over 80% of the total jobs lost to August).


It is not surprising to see that Covid has impacted a finite number of industries, especially hospitality and travel.


The good news is that employment has recovered significantly between May and August - as denoted above by the dark-blue dots versus the light-blue bars.
Those that have been less impacted have been saving money and repaying debt
For those that have not been materially impacted by Covid, disposable incomes have actually increased (mainly due to low rates), consumption has fallen (due to lockdowns) and savings rates has increased significantly.


People have been making repaying large repayments towards credit card balances.


And borrowers have been making larger principal repayments and/or accumulating more cash in offset accounts. So, overall, personal debt has reduced during Covid.


Offset accounts
Spending and confidence has rebounded strongly
National consumer spending (using credit card data compiled by ANZ) is 8% higher than this time last year. Victoria has rebounded strongly. This demonstrates that the cohort of people that have not been impacted by Covid more than make up for those that have. Large spending increases have been observed in furniture, homewares and electrical categories.


Consumer confidence (per Westpac/Melbourne Institute) is now at a 7 year high. It is likely that confidence has been buoyed by Australia appearing to now be Covid-free and people can now see past 2020, looking towards a Covid-normal 2021. The possibility of a successful vaccine arriving if the first half of next year also helps the global economic outlook.


What does all this data tell us?
(1) Higher earners will probably drive the property market recovery
The above data demonstrates that there are two cohorts of Australians.
The first cohort that has unfortunately been adversely impacted by Covid. These are likely to be lower income earners and younger Australian's. As such, it is less likely that they will be owners or prospective buyers of property located in blue-chip suburbs.
The second cohort are those that haven't been impacted by Covid (or only to a minor extent). These are likely to be higher income earners, over the age of 34, have more savings in the bank (offset) and have lower debt levels as a result of spending less (thanks to lockdowns). It is this cohort that will probably implement their property plans (purchase, upgrade, invest) sooner rather than later. Historically low interest rates will also benefit this cohort to a greater extent, as they tend to have high levels of borrowings.
(2) Higher spenders will drive the economic recovery
Lower income ear

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Understanding how Covid lockdowns have impacted certain individuals and industries, helps to inform us about how quickly the economy and markets may recover.
With this in mind, I thought it was useful to share a number of charts published recently by the RBA and banks which provide important and interesting insights.
Covid has discriminated against younger workers and lower income earners
Workers between the ages of 15 and 34 account for more than half of the jobs lost (unemployment) to August.


The RBA broke up changes to employment into five groups - from the highest income earners to the lowest earners. As the chart below shows, the lowest paid 40% of Australian's suffered the largest loss of employment (over 80% of the total jobs lost to August).


It is not surprising to see that Covid has impacted a finite number of industries, especially hospitality and travel.


The good news is that employment has recovered significantly between May and August - as denoted above by the dark-blue dots versus the light-blue bars.
Those that have been less impacted have been saving money and repaying debt
For those that have not been materially impacted by Covid, disposable incomes have actually increased (mainly due to low rates), consumption has fallen (due to lockdowns) and savings rates has increased significantly.


People have been making repaying large repayments towards credit card balances.


And borrowers have been making larger principal repayments and/or accumulating more cash in offset accounts. So, overall, personal debt has reduced during Covid.


Offset accounts
Spending and confidence has rebounded strongly
National consumer spending (using credit card data compiled by ANZ) is 8% higher than this time last year. Victoria has rebounded strongly. This demonstrates that the cohort of people that have not been impacted by Covid more than make up for those that have. Large spending increases have been observed in furniture, homewares and electrical categories.


Consumer confidence (per Westpac/Melbourne Institute) is now at a 7 year high. It is likely that confidence has been buoyed by Australia appearing to now be Covid-free and people can now see past 2020, looking towards a Covid-normal 2021. The possibility of a successful vaccine arriving if the first half of next year also helps the global economic outlook.


What does all this data tell us?
(1) Higher earners will probably drive the property market recovery
The above data demonstrates that there are two cohorts of Australians.
The first cohort that has unfortunately been adversely impacted by Covid. These are likely to be lower income earners and younger Australian's. As such, it is less likely that they will be owners or prospective buyers of property located in blue-chip suburbs.
The second cohort are those that haven't been impacted by Covid (or only to a minor extent). These are likely to be higher income earners, over the age of 34, have more savings in the bank (offset) and have lower debt levels as a result of spending less (thanks to lockdowns). It is this cohort that will probably implement their property plans (purchase, upgrade, invest) sooner rather than later. Historically low interest rates will also benefit this cohort to a greater extent, as they tend to have high levels of borrowings.
(2) Higher spenders will drive the economic recovery
Lower income ear

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 66107cf1-1a72-4f95-9341-cd3a6442dd2f Tue, 17 Nov 2020 09:00:00 +1100 873 investopoly,wemyss,rules of the lending game,covid,offset accounts,unemployment,economic recovery,consumer spending,confidence,savings ratio 1 139 false How much does financial advice cost? How much does financial advice cost? If you need financial advice, how much should you expect to pay for it? Of course, the cost is what you pay, but value is what you receive. The value needs to exceed the cost for it to be worthwhile. So, how do you assess the value of financial advice?

Whilst the answers to these questions can vary significantly, we must take into account that value assessments can be subjective, and I wanted to share my insights to help people with this analysis.

Financial advice fees create tension
On one hand, the lower the financial advisory fee you pay, the more money you save to invest and that has to translate to a higher likelihood of achieving your financial goals.

On the other hand, in many respects, you get what you pay for. The cheapest financial advice is not always the best.

Your willingness to pay more for financial advice may create some valuable consequences:
§ It is likely that you will attract an advisor with more experience. An advisor with 20 years of experience isn’t going to work for $20 per hour – a graduate with zero experience might;
§ It will allow that person to spend more time thinking about (analysing) the advice they give you. However, if profit margins are very thin, it inevitably creates pressure to cut corners – and certainly no scope to provide proactive advice; and
§ The more human and economic resources a firm has, the more it can invest in their people and systems to continually improve the value they provide you. Better research, more analysis and more thinking time creates value in the long run.

The truth is, because of the tension advisory fees create, a balance must be found. The fees you pay must be as low as possible. But not too low that it risks the value of the advice you receive.

How much does it cost to give financial advice?
The cost of giving financial advice can typically be categorised into four components.

(1) Staffing
The cost of employing the right people can be significant. The quality of the people determines the quality of advice and service that you can expect to receive.

Of course, the knowledge and experience of the advisor is paramount. Someone with very vast knowledge and many decades of experience will usually command a higher salary.
For example, I’ve spent years honing my craft, learning, investing in myself. Consequently, the advice I give is substantially more valuable than an advisor with only a couple of years of experience. But it comes at a cost.

(2) Compliance and risk
There are a number of costs associated with having your own financial services license (AFSL). These include paying for an audit at least annually, training and education, license related fees paid to ASIC, professional indemnity insurance – the cost of which rivals some of the riskiest medical occupations and the time cost of fulfilling all compliance obligations.

Giving advice does not come without risk. Advisors accept a huge responsibility for formulating the right advice. Advice on simple matters is of course a lot less risky. However, advice that involves large sums of money or complexity carry higher levels of advice risk, because even small errors or misjudgements can have significant financial consequences (in dollar terms). Higher risk engagements attract higher levels of advisor compensation (fees).

(3) Overheads
All businesses have overheads including office occupancy, technology and software costs and so on.

(4) Profit
A sustainable business must make a profit. The profit must be sufficient enough to compensate the o

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> If you need financial advice, how much should you expect to pay for it? Of course, the cost is what you pay, but value is what you receive. The value needs to exceed the cost for it to be worthwhile. So, how do you assess the value of financial advice?

Whilst the answers to these questions can vary significantly, we must take into account that value assessments can be subjective, and I wanted to share my insights to help people with this analysis.

Financial advice fees create tension
On one hand, the lower the financial advisory fee you pay, the more money you save to invest and that has to translate to a higher likelihood of achieving your financial goals.

On the other hand, in many respects, you get what you pay for. The cheapest financial advice is not always the best.

Your willingness to pay more for financial advice may create some valuable consequences:
§ It is likely that you will attract an advisor with more experience. An advisor with 20 years of experience isn’t going to work for $20 per hour – a graduate with zero experience might;
§ It will allow that person to spend more time thinking about (analysing) the advice they give you. However, if profit margins are very thin, it inevitably creates pressure to cut corners – and certainly no scope to provide proactive advice; and
§ The more human and economic resources a firm has, the more it can invest in their people and systems to continually improve the value they provide you. Better research, more analysis and more thinking time creates value in the long run.

The truth is, because of the tension advisory fees create, a balance must be found. The fees you pay must be as low as possible. But not too low that it risks the value of the advice you receive.

How much does it cost to give financial advice?
The cost of giving financial advice can typically be categorised into four components.

(1) Staffing
The cost of employing the right people can be significant. The quality of the people determines the quality of advice and service that you can expect to receive.

Of course, the knowledge and experience of the advisor is paramount. Someone with very vast knowledge and many decades of experience will usually command a higher salary.
For example, I’ve spent years honing my craft, learning, investing in myself. Consequently, the advice I give is substantially more valuable than an advisor with only a couple of years of experience. But it comes at a cost.

(2) Compliance and risk
There are a number of costs associated with having your own financial services license (AFSL). These include paying for an audit at least annually, training and education, license related fees paid to ASIC, professional indemnity insurance – the cost of which rivals some of the riskiest medical occupations and the time cost of fulfilling all compliance obligations.

Giving advice does not come without risk. Advisors accept a huge responsibility for formulating the right advice. Advice on simple matters is of course a lot less risky. However, advice that involves large sums of money or complexity carry higher levels of advice risk, because even small errors or misjudgements can have significant financial consequences (in dollar terms). Higher risk engagements attract higher levels of advisor compensation (fees).

(3) Overheads
All businesses have overheads including office occupancy, technology and software costs and so on.

(4) Profit
A sustainable business must make a profit. The profit must be sufficient enough to compensate the o

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 15d31d50-4e57-4bcc-b827-3aab3c1126f9 Wed, 11 Nov 2020 09:00:00 +1100 1416 Investopoly,rules of the lending game,wemyss,stuart wemyss,financial advice,financial planning,independent financial advice,prosolution 1 138 false How do you ensure your will is set up properly? How do you ensure your will is set up properly? Most people acknowledge that a will is an important document to create, but we all hope there’s no urgency to prepare it. As such, many people rarely ‘get around’ to it.

One of the reasons for this is they don’t know enough about it and how to get started. This blog answers commonly asked questions and matters that should be considered when drafting estate planning documents.

Rules are State based
The laws that govern the administration of wills and intestacy (if you die without a will) is the State’s jurisdiction. This means rules may vary from state to state.

Generally, if you die without a will, it is referred to as dying intestate. There are many adverse consequences of this including your assets being distributed in a way that you would not otherwise agree with. In addition, it creates unnecessary work and complexity for surviving family members to arrange probate.

Simple circumstances requires a simple will
If your situation is simple, you only need a simple will. Simple means that you do not have significant assets, you do not have any specific beneficiaries or financial dependents. In this situation, typically, a template will should be satisfactory. You can purchase these online for approximately $200. Make sure your will is witnessed correctly.

However, the more assets you have (in terms of value), the greater the need for personalised legal advice. Like in many situations, often it’s what you don’t know that could cause problems.

Kids complicate matters
If you have children (or are contemplating having children), you should engage a lawyer to draft your will. Not only do you need to ensure that all financial dependents will be looked after, but you must address guardianship of your children. In the event that you and your spouse1 pass away, who will be the legal guardian of your children? This is an important decision which must be included in your will.

I would typically advise people with children to insert a testamentary trust into their will. A testamentary trust is a special discretionary trust that is created upon death. The will maker can permit the executor to transfer the estate assets into the testamentary trust. Testamentary trust’s provide serval advantages including taxation savings (discussed below) and asset protection benefits.

Blended families complicate matters further
A blended family includes situations such as:
  • both spouses have children from a previous relationship; and/or
  • one spouse has children from a previous relationship as well as children with their current spouse.

Blended family arrangements can create a myriad of potential risks that must be considered and addressed when drafting estate planning documents. Anyone in this situation must seek personalised legal advice from an experienced estate planning lawyer.

Beneficiaries with special needs
If you have beneficiaries or financial dependants with special needs such as a child with a disability, battling addiction, mental health or similar issues, it is very important that you receive personalised legal advice.

Ways to minimise the likelihood of family conflict
Money and grief do not mix well. Otherwise healthy family relationships can turn sour when money is involved. But there are some steps you can take to minimise the chance of your family members fighting over your estate.

Have difficult conversations
You invite

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Most people acknowledge that a will is an important document to create, but we all hope there’s no urgency to prepare it. As such, many people rarely ‘get around’ to it.

One of the reasons for this is they don’t know enough about it and how to get started. This blog answers commonly asked questions and matters that should be considered when drafting estate planning documents.

Rules are State based
The laws that govern the administration of wills and intestacy (if you die without a will) is the State’s jurisdiction. This means rules may vary from state to state.

Generally, if you die without a will, it is referred to as dying intestate. There are many adverse consequences of this including your assets being distributed in a way that you would not otherwise agree with. In addition, it creates unnecessary work and complexity for surviving family members to arrange probate.

Simple circumstances requires a simple will
If your situation is simple, you only need a simple will. Simple means that you do not have significant assets, you do not have any specific beneficiaries or financial dependents. In this situation, typically, a template will should be satisfactory. You can purchase these online for approximately $200. Make sure your will is witnessed correctly.

However, the more assets you have (in terms of value), the greater the need for personalised legal advice. Like in many situations, often it’s what you don’t know that could cause problems.

Kids complicate matters
If you have children (or are contemplating having children), you should engage a lawyer to draft your will. Not only do you need to ensure that all financial dependents will be looked after, but you must address guardianship of your children. In the event that you and your spouse1 pass away, who will be the legal guardian of your children? This is an important decision which must be included in your will.

I would typically advise people with children to insert a testamentary trust into their will. A testamentary trust is a special discretionary trust that is created upon death. The will maker can permit the executor to transfer the estate assets into the testamentary trust. Testamentary trust’s provide serval advantages including taxation savings (discussed below) and asset protection benefits.

Blended families complicate matters further
A blended family includes situations such as:
  • both spouses have children from a previous relationship; and/or
  • one spouse has children from a previous relationship as well as children with their current spouse.

Blended family arrangements can create a myriad of potential risks that must be considered and addressed when drafting estate planning documents. Anyone in this situation must seek personalised legal advice from an experienced estate planning lawyer.

Beneficiaries with special needs
If you have beneficiaries or financial dependants with special needs such as a child with a disability, battling addiction, mental health or similar issues, it is very important that you receive personalised legal advice.

Ways to minimise the likelihood of family conflict
Money and grief do not mix well. Otherwise healthy family relationships can turn sour when money is involved. But there are some steps you can take to minimise the chance of your family members fighting over your estate.

Have difficult conversations
You invite

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 10e1de96-79f7-466b-8b39-16a5b6acc78d Wed, 04 Nov 2020 09:00:00 +1100 1141 Investopoly,rules of the lending game,wemyss,will,wills,estate planning,Power of attorney,Asset protection,testamentary trust,inheritence,gifts, 1 137 false Research report: Performance review of investment-grade apartments Research report: Performance review of investment-grade apartments It is my observation that investment-grade apartments in Melbourne have under-performed (from a capital growth perspective) compared to houses over the past 8 to 10 years.

That is, apartments have generated very little capital growth (sometimes none), whereas houses have grown in value by between 5% and 8% p.a. over the same period.

I have prepared a detailed report investigating the factors that have contributed towards this capital growth performance gap. Whilst I have focused my analysis on the Melbourne market, many of the factors identified and discussed have had an impact in Melbourne and to a lesser extent, Sydney.

I provide a brief executive summary below. I invite you to download a copy of the full report (link is at the bottom of this page).

We know that property growth tends to occur in cycles
The chart below sets out the distribution growth in the median price of apartments in Sydney, Melbourne and Brisbane over the past 40 years.

It is clear that growth cycles tend to last between 5 and 10 years (although Brisbane between 1980 and 2002 is the main exception). This is constant with what I have observed for houses, as previously charted here.

Chart 1




We need growth of circa 9% p.a. to make up for the under-performance
If you purchased an apartment 7 years ago for $600,000 in Melbourne, it may be worth $650,000 today. Most people would (and should) be disappointed with receiving only $50,000 of capital growth over 7 years. Applying the change in land values (as implied by the actual change in house prices) to apartments, one could argue that the intrinsic value of this apartment may be closer to $900,000. This intrinsic valuation is illustrated by the blue dotted line in the chart below.

I calculated that this apartment would need to generate an average capital growth rate of 9.2% p.a. over the next 10 years to “make up” for its past under-performance (i.e. to grow from value A to value B).

That is, the value of the apartment would need to increase from $650,000 to $1.55 million over the next 10 years. Whilst that might seem unrealistic, we note that apartments have delivered growth above 9.2% p.a. in the past, as illustrated in the chart above.




Dramatic increase in supply of new apartments between 2008 and 2018
It is likely that the increase in supply if new apartments (i.e. new construction) has been the main contributor to the low levels of capital growth. When supply equals demand, price growth does not occur. However, when demand exceeds supply (like it has in the housing market), this imbalance contributes towards price appreciation.

The chart below sets out the number of residential unit constructions commenced per quarter. This trend data is provided by the ABS and is seasonally adjusted. In the main, supply began increasing in 2008/9 but has started to taper off around 2017/8.




This increase in apartment supply is evidence in investment-grade suburbs too. The next chart below sets out the proportion of apartments listed for sale compared to houses in a selection of investment-grade, blue-chip Melbourne suburbs since 2011 (when the data series began).




As you can see, in 2011, on average, 60% of properties listed for sale in these suburbs were apartments. By 2017, that proportion increased to 78%. Importantly, the proportion of apartm

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> It is my observation that investment-grade apartments in Melbourne have under-performed (from a capital growth perspective) compared to houses over the past 8 to 10 years.

That is, apartments have generated very little capital growth (sometimes none), whereas houses have grown in value by between 5% and 8% p.a. over the same period.

I have prepared a detailed report investigating the factors that have contributed towards this capital growth performance gap. Whilst I have focused my analysis on the Melbourne market, many of the factors identified and discussed have had an impact in Melbourne and to a lesser extent, Sydney.

I provide a brief executive summary below. I invite you to download a copy of the full report (link is at the bottom of this page).

We know that property growth tends to occur in cycles
The chart below sets out the distribution growth in the median price of apartments in Sydney, Melbourne and Brisbane over the past 40 years.

It is clear that growth cycles tend to last between 5 and 10 years (although Brisbane between 1980 and 2002 is the main exception). This is constant with what I have observed for houses, as previously charted here.

Chart 1




We need growth of circa 9% p.a. to make up for the under-performance
If you purchased an apartment 7 years ago for $600,000 in Melbourne, it may be worth $650,000 today. Most people would (and should) be disappointed with receiving only $50,000 of capital growth over 7 years. Applying the change in land values (as implied by the actual change in house prices) to apartments, one could argue that the intrinsic value of this apartment may be closer to $900,000. This intrinsic valuation is illustrated by the blue dotted line in the chart below.

I calculated that this apartment would need to generate an average capital growth rate of 9.2% p.a. over the next 10 years to “make up” for its past under-performance (i.e. to grow from value A to value B).

That is, the value of the apartment would need to increase from $650,000 to $1.55 million over the next 10 years. Whilst that might seem unrealistic, we note that apartments have delivered growth above 9.2% p.a. in the past, as illustrated in the chart above.




Dramatic increase in supply of new apartments between 2008 and 2018
It is likely that the increase in supply if new apartments (i.e. new construction) has been the main contributor to the low levels of capital growth. When supply equals demand, price growth does not occur. However, when demand exceeds supply (like it has in the housing market), this imbalance contributes towards price appreciation.

The chart below sets out the number of residential unit constructions commenced per quarter. This trend data is provided by the ABS and is seasonally adjusted. In the main, supply began increasing in 2008/9 but has started to taper off around 2017/8.




This increase in apartment supply is evidence in investment-grade suburbs too. The next chart below sets out the proportion of apartments listed for sale compared to houses in a selection of investment-grade, blue-chip Melbourne suburbs since 2011 (when the data series began).




As you can see, in 2011, on average, 60% of properties listed for sale in these suburbs were apartments. By 2017, that proportion increased to 78%. Importantly, the proportion of apartm

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss cf9737f6-cbd0-4ddb-89dd-48edb9323ca1 Tue, 27 Oct 2020 10:30:00 +1100 1327 investopoly,rules of the lending game,wemyss,property investing,investment grade apartments,property,investment property 1 136 false Update: US election, impact of zero overseas immigration, US tech stocks, super-low rates and more Update: US election, impact of zero overseas immigration, US tech stocks, super-low rates and more Investment update: How to navigate current uncertainties
There is never a perfect time to invest. The stars never align. In reality, there will always be reasons why investing now feels risky. The solution is to learn to dance with uncertainty.

Generally, most people can achieve this by doing two things. Firstly, focus only on generating quality investment returns in the long run. Ignore any short-term outcomes, as they are rarely relevant. Stick to proven investment fundamentals. Only adopt evidence-based strategies. Playing the long game often inspires higher levels of confidence.

Secondly, embrace the fact that uncertainty is your friend. Potential investment profits are greatly improved during times of higher uncertainty. Early April is a good example. We helped many clients invest in the share market during April and subsequent months. Whilst we are fixated on maximising long term investment returns, our clients have generated very good returns in the short run.

With this in mind, I thought it would be useful to share my thoughts on a number of risks (read: opportunities) that present themselves at the moment, and how I think you best navigate these.

The US election
The first thing to realise is that markets focus on policies, not personalities. From a pure market/economics perspective, a Trump victory is probably more attractive, at least in the shorter term. The reason for that is Trump’s agenda is to continue reducing taxes, whereas Biden wants to wind back some of Trump’s previous cuts. It is questionable whether now is the right time to raise taxes, especially since the US economy needs all the help that it can get at the moment. That will be ‘the markets’ primary concern.

There is also some divergence in energy policies. It is fair to say the Biden’s energy policy generally favours environmental protection (Biden plans to impose a ‘carbon adjustment’ fee).

Of course, whether a President can implement their policy agenda depends on whether they control the House of Representatives and Senate. The Democrats already have a majority in the House of Representatives, so it needs to win the Senate in next month’s election to control all three arms of government. If they don’t, the Republicans can block legislation unless the Democrats can get rid of the filibuster, which you can read about here.

The big question is whether Trump will go quietly. I’m sure most people would agree that this is unlikely. A refusal to leave the white house, a legal challenge and who knows what else are all possible outcomes. Market’s dislike uncertainty and such events will probably result in higher levels of share market volatility, which investors must be prepared for.

In addition, any delay in inaugurating a new president will further delay the approval of a second trillion-dollar stimulus package which could exacerbate economic damage.

There is nothing long term investors can or should do to accommodate these risks. It is merely a case of acknowledging that this volatility could arise, but it’s unlikely to persist for more than a few months (hopefully).

US tech sector valuations
The chart below eloquently illustrates the impact that the FAANGM stocks have had on the overall US share market index’s performance (the FAANGM stocks include Facebook, Apple, Netflix, Google, Amazon and Microsoft).

These six stocks have contributed approximately 40% of the index’s return (i.e. the return over the past 7.5 years was 10.4% p.a. or 7.4% p.a. excluding the FAANGM stock).

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Investment update: How to navigate current uncertainties
There is never a perfect time to invest. The stars never align. In reality, there will always be reasons why investing now feels risky. The solution is to learn to dance with uncertainty.

Generally, most people can achieve this by doing two things. Firstly, focus only on generating quality investment returns in the long run. Ignore any short-term outcomes, as they are rarely relevant. Stick to proven investment fundamentals. Only adopt evidence-based strategies. Playing the long game often inspires higher levels of confidence.

Secondly, embrace the fact that uncertainty is your friend. Potential investment profits are greatly improved during times of higher uncertainty. Early April is a good example. We helped many clients invest in the share market during April and subsequent months. Whilst we are fixated on maximising long term investment returns, our clients have generated very good returns in the short run.

With this in mind, I thought it would be useful to share my thoughts on a number of risks (read: opportunities) that present themselves at the moment, and how I think you best navigate these.

The US election
The first thing to realise is that markets focus on policies, not personalities. From a pure market/economics perspective, a Trump victory is probably more attractive, at least in the shorter term. The reason for that is Trump’s agenda is to continue reducing taxes, whereas Biden wants to wind back some of Trump’s previous cuts. It is questionable whether now is the right time to raise taxes, especially since the US economy needs all the help that it can get at the moment. That will be ‘the markets’ primary concern.

There is also some divergence in energy policies. It is fair to say the Biden’s energy policy generally favours environmental protection (Biden plans to impose a ‘carbon adjustment’ fee).

Of course, whether a President can implement their policy agenda depends on whether they control the House of Representatives and Senate. The Democrats already have a majority in the House of Representatives, so it needs to win the Senate in next month’s election to control all three arms of government. If they don’t, the Republicans can block legislation unless the Democrats can get rid of the filibuster, which you can read about here.

The big question is whether Trump will go quietly. I’m sure most people would agree that this is unlikely. A refusal to leave the white house, a legal challenge and who knows what else are all possible outcomes. Market’s dislike uncertainty and such events will probably result in higher levels of share market volatility, which investors must be prepared for.

In addition, any delay in inaugurating a new president will further delay the approval of a second trillion-dollar stimulus package which could exacerbate economic damage.

There is nothing long term investors can or should do to accommodate these risks. It is merely a case of acknowledging that this volatility could arise, but it’s unlikely to persist for more than a few months (hopefully).

US tech sector valuations
The chart below eloquently illustrates the impact that the FAANGM stocks have had on the overall US share market index’s performance (the FAANGM stocks include Facebook, Apple, Netflix, Google, Amazon and Microsoft).

These six stocks have contributed approximately 40% of the index’s return (i.e. the return over the past 7.5 years was 10.4% p.a. or 7.4% p.a. excluding the FAANGM stock).

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 981409b8-7a79-4626-9b07-e87d069aa2ad Wed, 21 Oct 2020 09:00:00 +1100 1091 investopoly,rules of the lending game,wemyss,investment advice,US election,Investment,Investing,financial advice,property,property investing,update 1 135 false Why were you so wrong? Why were you so wrong? Have you ever had a strong opinion (prediction) about investment markets which was subsequently proven to be incorrect? A recent example was when many people predicted borrowers would be forced to sell their properties due to the Covid lockdowns and the market would crash. This outcome now seems unlikely.

It is my view that a humble mindset is the best way to avoid being blindsided by unexpected investment risk, whilst at the same time spotting all opportunities. Let me explain.

Predicting the end of the world isn’t a risky endeavour
Robert Glazer wrote about the concept of cognitive dissonance in his recent blog:

“… the authors examined the followers of cult leaders who predicted that the world was going to end on a specific date, and told everyone to prepare. When that day passed without a fiery inferno, you may have expected these cult leaders to have lost all credibility with their followers.
Instead, the exact opposite happened. The leaders simply declared their prediction was incorrect and declared a new date. Like clockwork, their followers doubled-down and began preparing for the next apocalypse.
Why would they do this? According to Tavris and Aronson, it was likely too painful for the cultists to admit they had fallen for a fraudulent prophecy. It was easier to avoid interrogating their own judgment, and to instead dig a deeper hole of delusion for themselves.”

This shows the danger of holding strong opinions and leaving no room for the possibility that you could be wrong, particularly when you are investing money.

Perpetual property bears seem to ignore the evidence
There are two prominent commentators that have been perpetually bearish about the Australian property market since I started ProSolution in 2002.

They are Martin North from Digital Financial Analytics and economist Dr Steve Keen, who is now working in London. Of course, there are others but these two stand out in my mind.

They have both been outspoken and incorrectly predicted property price crashes on a number of occasions. In fact, I recall watching Dr Keen on the TV program, Sixty Minutes in 2008 telling all Australian’s to sell their property. Apparently, he even sold his apartment. He predicted that prices would crash by 40% between 2008 and 2010. He was so certain. Of course, he was wrong.

People that hold perpetually negative views, that leave no room for the possibility they could be wrong and ignore all the evidence, lack credibility.

Financial advisors that hold strong beliefs are also dangerous
I know some advisors that hold very strong beliefs about the methodologies they utilise. They believe their way is right and everyone else is wrong.

Whilst I admire their conviction, such strongly held beliefs are dangerous. In life, things are rarely that black and white. There’s almost always some nuance.

Hold strong opinions, loosely
The saying “hold strong opinions, loosely” perfectly suits investing. You should have a strong conviction in the robust investment strategy you adopt, especially since it should be supported by sound, evidenced-based methodologies. However, at the same time, you must leave room for the possibility that you could be wrong. That every investment you make may not work out how you had hoped.

This humble mindset will greatly reduce the risk that you will be blindsided by unexpected

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Have you ever had a strong opinion (prediction) about investment markets which was subsequently proven to be incorrect? A recent example was when many people predicted borrowers would be forced to sell their properties due to the Covid lockdowns and the market would crash. This outcome now seems unlikely.

It is my view that a humble mindset is the best way to avoid being blindsided by unexpected investment risk, whilst at the same time spotting all opportunities. Let me explain.

Predicting the end of the world isn’t a risky endeavour
Robert Glazer wrote about the concept of cognitive dissonance in his recent blog:

“… the authors examined the followers of cult leaders who predicted that the world was going to end on a specific date, and told everyone to prepare. When that day passed without a fiery inferno, you may have expected these cult leaders to have lost all credibility with their followers.
Instead, the exact opposite happened. The leaders simply declared their prediction was incorrect and declared a new date. Like clockwork, their followers doubled-down and began preparing for the next apocalypse.
Why would they do this? According to Tavris and Aronson, it was likely too painful for the cultists to admit they had fallen for a fraudulent prophecy. It was easier to avoid interrogating their own judgment, and to instead dig a deeper hole of delusion for themselves.”

This shows the danger of holding strong opinions and leaving no room for the possibility that you could be wrong, particularly when you are investing money.

Perpetual property bears seem to ignore the evidence
There are two prominent commentators that have been perpetually bearish about the Australian property market since I started ProSolution in 2002.

They are Martin North from Digital Financial Analytics and economist Dr Steve Keen, who is now working in London. Of course, there are others but these two stand out in my mind.

They have both been outspoken and incorrectly predicted property price crashes on a number of occasions. In fact, I recall watching Dr Keen on the TV program, Sixty Minutes in 2008 telling all Australian’s to sell their property. Apparently, he even sold his apartment. He predicted that prices would crash by 40% between 2008 and 2010. He was so certain. Of course, he was wrong.

People that hold perpetually negative views, that leave no room for the possibility they could be wrong and ignore all the evidence, lack credibility.

Financial advisors that hold strong beliefs are also dangerous
I know some advisors that hold very strong beliefs about the methodologies they utilise. They believe their way is right and everyone else is wrong.

Whilst I admire their conviction, such strongly held beliefs are dangerous. In life, things are rarely that black and white. There’s almost always some nuance.

Hold strong opinions, loosely
The saying “hold strong opinions, loosely” perfectly suits investing. You should have a strong conviction in the robust investment strategy you adopt, especially since it should be supported by sound, evidenced-based methodologies. However, at the same time, you must leave room for the possibility that you could be wrong. That every investment you make may not work out how you had hoped.

This humble mindset will greatly reduce the risk that you will be blindsided by unexpected

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 886eae4c-0924-4f25-9ade-791aa9641f3d Wed, 14 Oct 2020 08:00:00 +1100 895 wemyss,investopoly,rules of the lending game,financial advice,independent financial advice,investing in shares,investing in property, 1 134 false Federal Budget 2020: Overview & analysis Federal Budget 2020: Overview & analysis This year’s budget was definitely aimed at business rather than individuals, and it needed to be. The main goal of the federal budget is to create jobs to repair the damage that Covid has done to the economy and Australian community.

Therefore, if you already have a job, there’s not much good news for you in the budget. However, there is plenty of good news for the Australian economy which will probably enhance the share market and property investment returns.

What’s in it for individuals?
The major benefit contained in the budget for individuals was income tax cuts. These tax cuts are backdated to begin on 1 July 2020. The table below sets out the tax savings (second column from the right) that you may enjoy.




The budget also included some other miscellaneous benefits, which are listed below.

Improving the super industry and performance
The government will direct employers to pay super into existing accounts (as advised by the ATO) to avoid opening a new account with a new super fund when you start a new job. This will avoid workers unknowingly accumulating multiple super accounts.

The government will also take measures to improve the accountability and transparency of super funds, which is a problem I have written about previously. This includes building a MySuper website which will allow people to rank investment returns and fees. Any improvements in this space are long overdue.

Interestingly, the government did not announce that it would postpone the increase to the compulsory super contribution rate from 9.5% to 10% p.a. At this stage, this is still set to begin on 1 July 2021.

Granny flat arrangements
Granny flats will now be exempt from CGT where a formal written agreement is in place.

Relaxing the paid parental leave qualification criteria
Parents will qualify for parental leave payments if they have worked in 10 of the last 20 months, instead of 10 of the last 13 months, preceding the birth or adoption of a child. This is to accommodate the impact of Covid.

Additional government grantees for first home buyers
The government will make available an additional 10,000 First Home Loan Deposit Scheme guarantees in the 2020/21 financial year. This arrangement allows first home buyers to borrow up to 95% of a property’s value without needing to pay for Lenders Mortgage Insurance (LMI).

Summary of major incentives for business
The below sets out a list of incentives for businesses:
§ Full write off of any capital expenses (no cap) incurred before 30 June 2022 for businesses with a turnover of less than $5 billion. This means large business will be able to get a full tax deduction for any asset purchases they make over the next 2 years.
§ If a business makes a loss in the 2020/21 and/or 2021/22 financial years, they can offset that loss against tax previously paid in the 2018/19 and 2019/20 financial years. This means they may receive a refund of tax previously paid.
§ If businesses employ an apprentice between 5 October 2020 and 30 September 2021, they will be able to claim a reimbursement of up to 50% of their wages up to a maximum of $7,000 per quarter.
§ Eligible businesses will be entitled to a credit of $200 per week for one year beginning 7 October 2020 for each new employee they hire that is aged between 16 and 29 years (or $100 per week if aged between 30 and 35 years).
§ The go

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> This year’s budget was definitely aimed at business rather than individuals, and it needed to be. The main goal of the federal budget is to create jobs to repair the damage that Covid has done to the economy and Australian community.

Therefore, if you already have a job, there’s not much good news for you in the budget. However, there is plenty of good news for the Australian economy which will probably enhance the share market and property investment returns.

What’s in it for individuals?
The major benefit contained in the budget for individuals was income tax cuts. These tax cuts are backdated to begin on 1 July 2020. The table below sets out the tax savings (second column from the right) that you may enjoy.




The budget also included some other miscellaneous benefits, which are listed below.

Improving the super industry and performance
The government will direct employers to pay super into existing accounts (as advised by the ATO) to avoid opening a new account with a new super fund when you start a new job. This will avoid workers unknowingly accumulating multiple super accounts.

The government will also take measures to improve the accountability and transparency of super funds, which is a problem I have written about previously. This includes building a MySuper website which will allow people to rank investment returns and fees. Any improvements in this space are long overdue.

Interestingly, the government did not announce that it would postpone the increase to the compulsory super contribution rate from 9.5% to 10% p.a. At this stage, this is still set to begin on 1 July 2021.

Granny flat arrangements
Granny flats will now be exempt from CGT where a formal written agreement is in place.

Relaxing the paid parental leave qualification criteria
Parents will qualify for parental leave payments if they have worked in 10 of the last 20 months, instead of 10 of the last 13 months, preceding the birth or adoption of a child. This is to accommodate the impact of Covid.

Additional government grantees for first home buyers
The government will make available an additional 10,000 First Home Loan Deposit Scheme guarantees in the 2020/21 financial year. This arrangement allows first home buyers to borrow up to 95% of a property’s value without needing to pay for Lenders Mortgage Insurance (LMI).

Summary of major incentives for business
The below sets out a list of incentives for businesses:
§ Full write off of any capital expenses (no cap) incurred before 30 June 2022 for businesses with a turnover of less than $5 billion. This means large business will be able to get a full tax deduction for any asset purchases they make over the next 2 years.
§ If a business makes a loss in the 2020/21 and/or 2021/22 financial years, they can offset that loss against tax previously paid in the 2018/19 and 2019/20 financial years. This means they may receive a refund of tax previously paid.
§ If businesses employ an apprentice between 5 October 2020 and 30 September 2021, they will be able to claim a reimbursement of up to 50% of their wages up to a maximum of $7,000 per quarter.
§ Eligible businesses will be entitled to a credit of $200 per week for one year beginning 7 October 2020 for each new employee they hire that is aged between 16 and 29 years (or $100 per week if aged between 30 and 35 years).
§ The go

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 1fcbd657-2dc1-4cff-a993-61812781e35a Wed, 07 Oct 2020 09:29:00 +1100 1198 rules of the lending game,investopoly,wemyss,federal budget,budget 2020,tax cuts,JobMaker,JobSeeker,Australian economy, 1 133 false Lending update: interest rates and borrowing capacity improvements Lending update: interest rates and borrowing capacity improvements The government made an important announcement last week. This change could substantially increase your borrowing capacity in the next year. It is perhaps the most significant change that has occurred in the last decade and will further fuel property price growth.

I also wanted to update you on interest rates, particularly in light of recent expectations that the RBA will soon cut rates again.

A positive change for investors and the property market

In 2009, the government re-wrote the laws governing the provision of loans. This required mortgage brokers and lenders to ensure that any new loans provided to borrowers were ‘not unsuitable’.

The background is important
Since the introduction of this new legislation, the government (ASIC) has been gradually tightening the laws, particularly over the last 3 to 4 years. In October 2018, I compared the loan application process to a forensic investigation (see below). This was not an exaggeration.




A few months ago, even the Governor of the RBA agreed that the tightening of credit rules had gone too far. There have been many examples of banks trawling through bank statements questioning small ($20) expenses. This pedantic approach added very little to the quality of the credit assessment.

Your current spending tells me little about your ability to repay
Perhaps the most significant recent event was Westpac’s success in defending an action initiated by ASIC regarding its alleged non-compliance with the credit laws. This case is now referred to as the 'Wagyu and shiraz' judgment. That is because Justice Perram said "I may eat Wagyu beef everyday washed down with the finest shiraz but, if I really want my new home, I can make do on much more modest fare…”.

When faced with the decision of whether to go out to dinner or make a mortgage repayment, almost everyone will make the right decision. To some degree, a high level of discretionary spending is arguably strong evidence that you have surplus cash flow that you could otherwise divert towards loan repayments.

The upshot is that 100 pages of ASIC guidance has created a very bureaucratic, inflexible, one-size-fits-all approach to assessing loans. This creates undue complexity, long delays, avoidable costs and sometimes perverse outcomes. No one wins.

The main proposed change is…
The main change proposed by the government is that lenders will be allowed to rely on information provided by borrowers, unless there are reasonable grounds to suspect that information is unreliable. This means the bank can ask you about your expenses and, in most situations, rely on the answer you provide. This avoids them having to trawl through your bank statements, like they do now. When formulating your answer, you can give consideration to what your “base level expenses” are. That is, all fixed and non-discretionary expenses. This may better represent your capacity to afford any proposed loan repayments.

In addition, the 'Wagyu and shiraz' judgment confirmed that it is acceptable for banks to use “benchmark expenses” when assessing a loan application. In this situation, some banks may not choose to ask you what you spend. The banks have a substantial amount of data about what their customers spend, which should allow them to determine reliable benchmarks.

Criticisms and what I hope happens
Thi

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> The government made an important announcement last week. This change could substantially increase your borrowing capacity in the next year. It is perhaps the most significant change that has occurred in the last decade and will further fuel property price growth.

I also wanted to update you on interest rates, particularly in light of recent expectations that the RBA will soon cut rates again.

A positive change for investors and the property market

In 2009, the government re-wrote the laws governing the provision of loans. This required mortgage brokers and lenders to ensure that any new loans provided to borrowers were ‘not unsuitable’.

The background is important
Since the introduction of this new legislation, the government (ASIC) has been gradually tightening the laws, particularly over the last 3 to 4 years. In October 2018, I compared the loan application process to a forensic investigation (see below). This was not an exaggeration.




A few months ago, even the Governor of the RBA agreed that the tightening of credit rules had gone too far. There have been many examples of banks trawling through bank statements questioning small ($20) expenses. This pedantic approach added very little to the quality of the credit assessment.

Your current spending tells me little about your ability to repay
Perhaps the most significant recent event was Westpac’s success in defending an action initiated by ASIC regarding its alleged non-compliance with the credit laws. This case is now referred to as the 'Wagyu and shiraz' judgment. That is because Justice Perram said "I may eat Wagyu beef everyday washed down with the finest shiraz but, if I really want my new home, I can make do on much more modest fare…”.

When faced with the decision of whether to go out to dinner or make a mortgage repayment, almost everyone will make the right decision. To some degree, a high level of discretionary spending is arguably strong evidence that you have surplus cash flow that you could otherwise divert towards loan repayments.

The upshot is that 100 pages of ASIC guidance has created a very bureaucratic, inflexible, one-size-fits-all approach to assessing loans. This creates undue complexity, long delays, avoidable costs and sometimes perverse outcomes. No one wins.

The main proposed change is…
The main change proposed by the government is that lenders will be allowed to rely on information provided by borrowers, unless there are reasonable grounds to suspect that information is unreliable. This means the bank can ask you about your expenses and, in most situations, rely on the answer you provide. This avoids them having to trawl through your bank statements, like they do now. When formulating your answer, you can give consideration to what your “base level expenses” are. That is, all fixed and non-discretionary expenses. This may better represent your capacity to afford any proposed loan repayments.

In addition, the 'Wagyu and shiraz' judgment confirmed that it is acceptable for banks to use “benchmark expenses” when assessing a loan application. In this situation, some banks may not choose to ask you what you spend. The banks have a substantial amount of data about what their customers spend, which should allow them to determine reliable benchmarks.

Criticisms and what I hope happens
Thi

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

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Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss c0746a70-c2b5-4422-b9fa-5f050684484b Wed, 30 Sep 2020 11:27:00 +1000 1190 Investopoly,Rules of lending game,wemyss,mortgage,property market,property prices,negative gearing,investing,advice 1 132 false Why blue-chip property values will rebound by > 10% in 2021 Why blue-chip property values will rebound by > 10% in 2021 n May, I wrote a blog after CBA released its bearish ‘worst case’ forecast for the property market. It predicted a 32% drop in prices! I outlined in my blog why I thought that was rubbish and prices would not fall by more than 10%. To date, according to various data sources, property values have not slipped by much more than 2% to 3%, which is barely noteworthy.

CBA revised its forecast on 9 September admitting they got it wrong.

Now that the virus is under control in Melbourne (and also nationally), I thought it was an opportune time to share my forecast for next year. It is my view that prices in well-established, inner-city, blue chip suburbs will rebound strongly in 2021 and deliver double-digit growth.

I set out the reasons for adopting this view below.

Covid has hurt low-income earners and younger people the most
Unfortunately, lower-income earners have been more financially vulnerable to the impact of Covid. They tend to work in occupations that do not lend themselves to working from home. In addition, industries such has hospitality, travel and tourism have been severely impacted, especially in Melbourne. As such, Covid has disproportionately affected lower income earners to a much greater extent.

A high proportion of middle and higher income earners are likely to either recover their income back to pre-Covid levels very quickly or haven’t been impacted at all.

In fact, there is a large cohort of people that are in a stronger financial position today. That’s because their income has been unaffected, their discretionary spending has reduced e.g. less eating out and no holidays and interest rates are at all-time lows. As such, many people have either accelerated debt repayments or accumulated more savings.

The best evidence of the financial strength of this cohort is reflected in the credit card spending data compiled by the banks. This data gives us a real-time indication of how much people are spending by category. Overall consumer spending is up 5% compared to last year. This demonstrates the unaffected cohort more than makes up for the people that have lost their jobs and income. This thematic is likely to translate to the property market too, especially in blue-chip suburbs.

Low rates will inflate asset prices
It is a generally accepted economic principal that lower interest rates result in increased asset prices. For example, if a company can source capital at a lower interest rate to fund growth, its profits will be higher and as such, its shares will be worth more.

This concept applies to property too. If money is cheap, then it costs less to hold an asset and holding all other factors constant, its value will appreciate.

I wrote a blog in May that highlighted that it is cheaper to own a property than rent it. This defies logic and is likely to encourage more people to buy rather than rent, assuming their financial situation allows it. As such, demand for property is almost certainly going to increase.

The RBA has said that it does not expect to increase the cash rate for at least 3 years. However, many economists predict that interest rates will remain lower for a much longer period of time. This interest rate expectation will further fuel demand.

Supply shortage will drive prices higher
This year national property listings have averaged below 300,000 for the first time since August 2010. The f

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> n May, I wrote a blog after CBA released its bearish ‘worst case’ forecast for the property market. It predicted a 32% drop in prices! I outlined in my blog why I thought that was rubbish and prices would not fall by more than 10%. To date, according to various data sources, property values have not slipped by much more than 2% to 3%, which is barely noteworthy.

CBA revised its forecast on 9 September admitting they got it wrong.

Now that the virus is under control in Melbourne (and also nationally), I thought it was an opportune time to share my forecast for next year. It is my view that prices in well-established, inner-city, blue chip suburbs will rebound strongly in 2021 and deliver double-digit growth.

I set out the reasons for adopting this view below.

Covid has hurt low-income earners and younger people the most
Unfortunately, lower-income earners have been more financially vulnerable to the impact of Covid. They tend to work in occupations that do not lend themselves to working from home. In addition, industries such has hospitality, travel and tourism have been severely impacted, especially in Melbourne. As such, Covid has disproportionately affected lower income earners to a much greater extent.

A high proportion of middle and higher income earners are likely to either recover their income back to pre-Covid levels very quickly or haven’t been impacted at all.

In fact, there is a large cohort of people that are in a stronger financial position today. That’s because their income has been unaffected, their discretionary spending has reduced e.g. less eating out and no holidays and interest rates are at all-time lows. As such, many people have either accelerated debt repayments or accumulated more savings.

The best evidence of the financial strength of this cohort is reflected in the credit card spending data compiled by the banks. This data gives us a real-time indication of how much people are spending by category. Overall consumer spending is up 5% compared to last year. This demonstrates the unaffected cohort more than makes up for the people that have lost their jobs and income. This thematic is likely to translate to the property market too, especially in blue-chip suburbs.

Low rates will inflate asset prices
It is a generally accepted economic principal that lower interest rates result in increased asset prices. For example, if a company can source capital at a lower interest rate to fund growth, its profits will be higher and as such, its shares will be worth more.

This concept applies to property too. If money is cheap, then it costs less to hold an asset and holding all other factors constant, its value will appreciate.

I wrote a blog in May that highlighted that it is cheaper to own a property than rent it. This defies logic and is likely to encourage more people to buy rather than rent, assuming their financial situation allows it. As such, demand for property is almost certainly going to increase.

The RBA has said that it does not expect to increase the cash rate for at least 3 years. However, many economists predict that interest rates will remain lower for a much longer period of time. This interest rate expectation will further fuel demand.

Supply shortage will drive prices higher
This year national property listings have averaged below 300,000 for the first time since August 2010. The f

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss c4b14feb-ecb7-4cc3-94a5-b0ca07361bb7 Wed, 23 Sep 2020 09:00:00 +1000 1205 Property investing,Property prices 2021,Property market,Rules of the lending game,Wemyss,Investopoly 1 131 false How long will your super last after retirement? How long will your super last after retirement? The compulsory superannuation contribution rate is set to increase by 0.5% each year for the next six years (i.e. from 9.5% to 12%) beginning from 1 July 2021. It is understood that the Federal Government is considering postponing next year’s increase, due to concerns about whether the economy can afford these higher employment costs and at the same time as deal with the current economic challenges.
A lot of the commentary about superannuation, including whether next year’s contribution increase should be postponed, is often motivated by political and vested interests. Therefore, I thought it would be useful to cut through this rhetoric and focus on the facts alone (i.e. maths).
In particular, I wanted to focus on two questions; (1) how long will your super last after retirement, and (2) how important are higher contributions compared to investment returns and fees.
How long your super will last depends on what you spend
Obviously, a key determinant of how long your super balance will last is how much you spend. The less you spend, the longer your money will last – no surprises there!
The best way to assess how much money you will probably need in retirement (to maintain your current standard of living), is to base it on how much you spend today. Of course, it is likely that you will spend your money on different things, but the aggregate amount tends to be very similar (between when you are working to when you are retired).
This table sets out what people tend to spend, based on my experience. The rule of thumb is that living expenses (see my definition of General Living Expenses here) tend to be in the range of 40% and 50% of your gross employment income (but typically not less than $50,000 or more than $150,000).
Comparing annual contribution levels of 9.5%, 12% and 15%
In my analysis, I measured the impact of a 30-year-old contributing a total of between 9.5% and 15% of their income each year for 30 years i.e. until they are age 60.
In most circumstances, contributing 12% or more of your income each year had a material impact on the longevity of super. In fact, for higher income earners that are 20 to 30 years from retirement, it was a magic bullet. That is, it would likely give them a sufficient super balance to fund their whole retirement.
Comparing investment returns of between 6.9% and 8.5% p.a.
I compared investment returns produced by the top 8 industry super funds for the last financial year in this blog. Based on data to the end of August 2020, 10-year returns ranged between 6.9% and 8.5% p.a. That is a large range i.e. 1.6% p.a. and it makes an enormous difference, particularly for higher income earners.
Picking the best fund out of the top 8 versus the worst, could be the difference between your super running out in your early 70’s versus it lasting for the rest of your life. It is important to note that the top performing fund will probably change over time, which is why it’s important to proactively manage your super (to ensure it is always invested well).
Comparing fees levels of 0.6% and 1.0% p.a.
Whilst super fees were important, they were the least important factor of the three compared. That is not to say that you shouldn’t a

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> The compulsory superannuation contribution rate is set to increase by 0.5% each year for the next six years (i.e. from 9.5% to 12%) beginning from 1 July 2021. It is understood that the Federal Government is considering postponing next year’s increase, due to concerns about whether the economy can afford these higher employment costs and at the same time as deal with the current economic challenges.
A lot of the commentary about superannuation, including whether next year’s contribution increase should be postponed, is often motivated by political and vested interests. Therefore, I thought it would be useful to cut through this rhetoric and focus on the facts alone (i.e. maths).
In particular, I wanted to focus on two questions; (1) how long will your super last after retirement, and (2) how important are higher contributions compared to investment returns and fees.
How long your super will last depends on what you spend
Obviously, a key determinant of how long your super balance will last is how much you spend. The less you spend, the longer your money will last – no surprises there!
The best way to assess how much money you will probably need in retirement (to maintain your current standard of living), is to base it on how much you spend today. Of course, it is likely that you will spend your money on different things, but the aggregate amount tends to be very similar (between when you are working to when you are retired).
This table sets out what people tend to spend, based on my experience. The rule of thumb is that living expenses (see my definition of General Living Expenses here) tend to be in the range of 40% and 50% of your gross employment income (but typically not less than $50,000 or more than $150,000).
Comparing annual contribution levels of 9.5%, 12% and 15%
In my analysis, I measured the impact of a 30-year-old contributing a total of between 9.5% and 15% of their income each year for 30 years i.e. until they are age 60.
In most circumstances, contributing 12% or more of your income each year had a material impact on the longevity of super. In fact, for higher income earners that are 20 to 30 years from retirement, it was a magic bullet. That is, it would likely give them a sufficient super balance to fund their whole retirement.
Comparing investment returns of between 6.9% and 8.5% p.a.
I compared investment returns produced by the top 8 industry super funds for the last financial year in this blog. Based on data to the end of August 2020, 10-year returns ranged between 6.9% and 8.5% p.a. That is a large range i.e. 1.6% p.a. and it makes an enormous difference, particularly for higher income earners.
Picking the best fund out of the top 8 versus the worst, could be the difference between your super running out in your early 70’s versus it lasting for the rest of your life. It is important to note that the top performing fund will probably change over time, which is why it’s important to proactively manage your super (to ensure it is always invested well).
Comparing fees levels of 0.6% and 1.0% p.a.
Whilst super fees were important, they were the least important factor of the three compared. That is not to say that you shouldn’t a

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 965d928d-e885-4983-819f-66e118c721fe Thu, 17 Sep 2020 09:00:00 +1000 1249 investopoly,rules of the lending game,wemyss,super,super funds,super returns,super contributions,which super fund,superannuation, 1 130 false It's not the size of the return, it's the length that matters It's not the size of the return, it's the length that matters Investing well is important. However, investing well over long periods of time is most important.

Everyone would agree that making a one-time 50% return on an investment is a wonderful outcome. But making a 7% return each year for 40 years is a far better outcome, as it multiplies your initial investment by a factor of 15!

This is an important principal to remind ourselves of, especially at the moment when our lives (and, to some extent, markets) have been turned upside-down by Covid-19!

Even moderate returns over long periods generate massive wealth

The chart below published by Vanguard (click to enlarge) calculates how much $10,000 invested in 1990 would be worth today.

The Australian (ASX200) index is currently trading at 5,985. If it grows at 2% p.a., what will its value be in 50 years’ time?

The answer: The ASX200 would be 16,100.

If it grew by an average of 4% p.a., it would be worth 42,500. Now, imagine it if grows by 8% p.a. – which is still below the 8.9% p.a. growth rate over the past 30 years. That would push the ASX200 index above 280,000!!

This simple example illustrates the beauty of playing the long game.

But to successfully play the long game, you must resist the temptation to get sucked into the incessant short term ‘noise’, worry and predictions.

I am usually sceptical when people tell me things have changed forever
The world is full of forecasts. At the moment, many commentators are telling us that the work-from-home (WFH) movement will result in companies deserting commercial office space en masse. And increased WFH will also result in a permanent increase in demand for regional property – since we don’t need to travel into the CBD anymore.

As Mr Buffett says, “forecasters will fill your ears but never your pockets”. You should be sceptical when anyone tells you that things have changed permanently overnight, because they rarely do.

Let me use WFH as an example
It is my view that WFH will have some impact on demand for commercial office space and, to a lesser extent, residential property in regional locations. But the size of its impact has been grossly overstated.

The forced increase in WFH (thanks to Covid-19) has certainly increased its acceptance. I suspect in the past many people thought WFH was used by people as an opportunity to ‘hide’ and reduce their workload. However, now everyone knows WFH means you work just as hard as you do when you’re in the office - often harder, as there’s fewer distractions.

Some CEO’s have also mentioned to me that that they used to feel obligated to be “seen” in the office each day, but this expectation has now changed.

However, just because you have successfully WFH for the past 6 months does not mean you will be able to do it for the next 6 years.

The reality is that permanent WFH does not suit the majority of industries, employees and employers. Most of us will still need an office to retreat to. Therefore, I think the likely long-term outcome is that more people will spread their time between the office and home. The ‘office’ is not dead, and neither is WFH.

How to derive stable and attractive returns from property over the long term
In order to persistently achieve a capital growth rate of approximately 5% p.a. above inflation, you must invest in a location that has robust fundamentals. These fundamentals will ensure that demand will co

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Investing well is important. However, investing well over long periods of time is most important.

Everyone would agree that making a one-time 50% return on an investment is a wonderful outcome. But making a 7% return each year for 40 years is a far better outcome, as it multiplies your initial investment by a factor of 15!

This is an important principal to remind ourselves of, especially at the moment when our lives (and, to some extent, markets) have been turned upside-down by Covid-19!

Even moderate returns over long periods generate massive wealth

The chart below published by Vanguard (click to enlarge) calculates how much $10,000 invested in 1990 would be worth today.

The Australian (ASX200) index is currently trading at 5,985. If it grows at 2% p.a., what will its value be in 50 years’ time?

The answer: The ASX200 would be 16,100.

If it grew by an average of 4% p.a., it would be worth 42,500. Now, imagine it if grows by 8% p.a. – which is still below the 8.9% p.a. growth rate over the past 30 years. That would push the ASX200 index above 280,000!!

This simple example illustrates the beauty of playing the long game.

But to successfully play the long game, you must resist the temptation to get sucked into the incessant short term ‘noise’, worry and predictions.

I am usually sceptical when people tell me things have changed forever
The world is full of forecasts. At the moment, many commentators are telling us that the work-from-home (WFH) movement will result in companies deserting commercial office space en masse. And increased WFH will also result in a permanent increase in demand for regional property – since we don’t need to travel into the CBD anymore.

As Mr Buffett says, “forecasters will fill your ears but never your pockets”. You should be sceptical when anyone tells you that things have changed permanently overnight, because they rarely do.

Let me use WFH as an example
It is my view that WFH will have some impact on demand for commercial office space and, to a lesser extent, residential property in regional locations. But the size of its impact has been grossly overstated.

The forced increase in WFH (thanks to Covid-19) has certainly increased its acceptance. I suspect in the past many people thought WFH was used by people as an opportunity to ‘hide’ and reduce their workload. However, now everyone knows WFH means you work just as hard as you do when you’re in the office - often harder, as there’s fewer distractions.

Some CEO’s have also mentioned to me that that they used to feel obligated to be “seen” in the office each day, but this expectation has now changed.

However, just because you have successfully WFH for the past 6 months does not mean you will be able to do it for the next 6 years.

The reality is that permanent WFH does not suit the majority of industries, employees and employers. Most of us will still need an office to retreat to. Therefore, I think the likely long-term outcome is that more people will spread their time between the office and home. The ‘office’ is not dead, and neither is WFH.

How to derive stable and attractive returns from property over the long term
In order to persistently achieve a capital growth rate of approximately 5% p.a. above inflation, you must invest in a location that has robust fundamentals. These fundamentals will ensure that demand will co

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss db3bcc29-17fd-4b1b-872a-0824ebb73de5 Thu, 10 Sep 2020 10:14:00 +1000 1267 rules of the lending game,investopoly,wemyss,investing in property,property investing,shares,share market,cash flow,financial advice, 1 129 false How to tell if your accountant is missing valuable opportunities? How to tell if your accountant is missing valuable opportunities? The difference between a great and an average accountant can be significant. Not only is tax one of your biggest annual expenses, but a great accountant should be able to proactively identify other financial opportunities, in addition to tax-saving measures.

Typically, the more complex your financial situation is (e.g. if you are self-employed, running a business, have a trust or SMSF, etc.), the more you have to gain from having the right accountant. That said, working with a great accountant is in everyone’s best interest.

How do you know if your accountant is great or not?
It’s difficult for clients to tell whether their accountant is proactively looking for, and has identified, all financial opportunities. The reality is, you don’t know, what you don’t know.

To help you, I have listed below some common traits or behaviours that may indicate if your accountant is great or not!

They take a long time to respond to your calls/emails
This is a common complaint by many people. A lack of timely responses causes two problems.

Firstly, it suggests that they have too much work, are under-staffed or have poor organisational skills. Neither of these things will allow them sufficient time and space to be able to provide you with proactive advice – because they will always be (reactively) rushing onto their next task.

Secondly, it will discourage you from seeking their advice or keeping them updated about changes in your circumstances. However, if you know your accountant is fast to respond to emails, then you will be encouraged to run things past them. Doing so will give your accountant more scope to add value.

They don’t ask questions – just follow last year’s work
It should come as no surprise that preparing the same tax return, year-after-year can be repetitive work. That said, its dangerous to fall into autopilot mode because if you make a mistake or miss an item one year, you will continue to repeat that mistake in subsequent years.

To combat this risk, good accounting firms regularly rotate staff so that the same person is not preparing the same work many years in a row – and also have well defined review procedures.

If your accountant rarely asks you questions or for additional information during the return preparation process, then it could be a sign that they are running on autopilot.

They don’t share ideas to improve your circumstances.
Great accountants have a very broad amount of knowledge and experience including tax planning (of course!), investments, superannuation, business acquisitions and optimisation, insurance and so on. They have learnt a lot through observing past client decisions.

This puts them in a position to be able to identify opportunities for their clients. But this process must be embedded in their processes and systems. For example, at the end of completing each job, your accountant should be asking themselves “if I was in their shoes, what would I be doing or thinking about”. How often does your accountant do that?

They are stuck in the 80’s!
Accountants are not known to be dynamic, forward-thinking people. But the truth is, great accountants are.

Great accountants realise that their clients don’t want to pay them to manually prepare workpapers and keep doing things the old-fashioned way. Therefore, they are constantly on the lookout for ways to automate and streamline their processes, which inevitably requires the adoption of technology. This approach allows these great accountants to spend more time on more proactive work.

If y

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> The difference between a great and an average accountant can be significant. Not only is tax one of your biggest annual expenses, but a great accountant should be able to proactively identify other financial opportunities, in addition to tax-saving measures.

Typically, the more complex your financial situation is (e.g. if you are self-employed, running a business, have a trust or SMSF, etc.), the more you have to gain from having the right accountant. That said, working with a great accountant is in everyone’s best interest.

How do you know if your accountant is great or not?
It’s difficult for clients to tell whether their accountant is proactively looking for, and has identified, all financial opportunities. The reality is, you don’t know, what you don’t know.

To help you, I have listed below some common traits or behaviours that may indicate if your accountant is great or not!

They take a long time to respond to your calls/emails
This is a common complaint by many people. A lack of timely responses causes two problems.

Firstly, it suggests that they have too much work, are under-staffed or have poor organisational skills. Neither of these things will allow them sufficient time and space to be able to provide you with proactive advice – because they will always be (reactively) rushing onto their next task.

Secondly, it will discourage you from seeking their advice or keeping them updated about changes in your circumstances. However, if you know your accountant is fast to respond to emails, then you will be encouraged to run things past them. Doing so will give your accountant more scope to add value.

They don’t ask questions – just follow last year’s work
It should come as no surprise that preparing the same tax return, year-after-year can be repetitive work. That said, its dangerous to fall into autopilot mode because if you make a mistake or miss an item one year, you will continue to repeat that mistake in subsequent years.

To combat this risk, good accounting firms regularly rotate staff so that the same person is not preparing the same work many years in a row – and also have well defined review procedures.

If your accountant rarely asks you questions or for additional information during the return preparation process, then it could be a sign that they are running on autopilot.

They don’t share ideas to improve your circumstances.
Great accountants have a very broad amount of knowledge and experience including tax planning (of course!), investments, superannuation, business acquisitions and optimisation, insurance and so on. They have learnt a lot through observing past client decisions.

This puts them in a position to be able to identify opportunities for their clients. But this process must be embedded in their processes and systems. For example, at the end of completing each job, your accountant should be asking themselves “if I was in their shoes, what would I be doing or thinking about”. How often does your accountant do that?

They are stuck in the 80’s!
Accountants are not known to be dynamic, forward-thinking people. But the truth is, great accountants are.

Great accountants realise that their clients don’t want to pay them to manually prepare workpapers and keep doing things the old-fashioned way. Therefore, they are constantly on the lookout for ways to automate and streamline their processes, which inevitably requires the adoption of technology. This approach allows these great accountants to spend more time on more proactive work.

If y

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss fd33982d-1497-4b52-85ee-db8cd971e74b Wed, 02 Sep 2020 09:00:00 +1000 1096 Investopoly,rules of the lending game,wemyss,tax planning. accountant,great accountant,how to find a great accountant, 1 128 false Why the next property you buy is the most important one Why the next property you buy is the most important one This blog’s title is a bit deceptive, because every property you buy is important, for either lifestyle or financial reasons.

I contemplated using the title: “why the first property you buy is the most important one”. But the reality is, if you have made a mistake on your first property, you can always start again.

The general theme of this blog is to demonstrate that the compounding impact of buying the right property is critical to understand.

Why is it so important?
Let me explain using an example:

Rick and Karen are buying their first home and are comparing two properties. Property A is considered to be investment grade and has great growth prospects i.e. 6% p.a. growth rate. Property B is a newer property but has inferior growth prospects and barely keeps up with inflation – growing at 1% p.a. Both properties cost $750,000. Rick and Karen need to borrow $700,000.
After 5 years of principal and interest home loan repayments, the balance of Rick and Karen’s loan would have reduced from $700,000 to approximately $622,000. The value of Property A would be approximately $1 million, and Property B would be $790,000. If Rick and Karen purchased Property A, they would have $378,000 of equity. However, if they purchased Property B, would have less than half the equity i.e. $168,000. That is a substantial difference of $210,000!

But it’s how this difference compounds that’s most important
If in 5 years’ time, Rick and Karen were contemplating upgrading their property to buy a larger family home, the differential in equity will have a substantial impact on their budget.

Assuming that they want to borrow a maximum of 80% of the new home’s value, a deposit of $378,000 will allow Rick and Karen to spend up to $1.45 million (allowing for 6% for costs including stamp duty).

However, a $168,000 deposit will only allow Rick and Karen to spend $650,000, which is less than their current property value! If they buy for $1 million, they will have to borrow 90% of the value and pay for mortgage insurance (which will cost over $35,000!).

Therefore, using this example, the difference between buying the right versus wrong property could be the difference between being able to take the next step (and buy a family home), or not.

It should be noted that this equity gap will continue to grow. If Rick and Karen purchased Property B, they may be forced to buy their larger family home in a suburb further away from the CBD (due to budgetary constraints). This will mean they will have a lower value asset that attracts a lower growth rate – the equity differential could be massive, as charted below.




And you can put that equity to work
To make matters worse, not only will buying the right property help Rick and Karen build more equity in their home, but they will be able to leverage that equity to build an investment portfolio. This could include borrowing to buy an investment property or invest in the share market.

Should you buy a property purely to make a quick profit?
No. In order to minimise your risk, it’s important to buy an investment-grade property that has sound long term fundamentals. A property that is well positioned to generate an above average capital growth rate over the long term. That must never be compromised.

However, if your goal is to upgrade or invest in the shorter term, then it does make sense to pick a property type or location that is expected to deliver a r

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> This blog’s title is a bit deceptive, because every property you buy is important, for either lifestyle or financial reasons.

I contemplated using the title: “why the first property you buy is the most important one”. But the reality is, if you have made a mistake on your first property, you can always start again.

The general theme of this blog is to demonstrate that the compounding impact of buying the right property is critical to understand.

Why is it so important?
Let me explain using an example:

Rick and Karen are buying their first home and are comparing two properties. Property A is considered to be investment grade and has great growth prospects i.e. 6% p.a. growth rate. Property B is a newer property but has inferior growth prospects and barely keeps up with inflation – growing at 1% p.a. Both properties cost $750,000. Rick and Karen need to borrow $700,000.
After 5 years of principal and interest home loan repayments, the balance of Rick and Karen’s loan would have reduced from $700,000 to approximately $622,000. The value of Property A would be approximately $1 million, and Property B would be $790,000. If Rick and Karen purchased Property A, they would have $378,000 of equity. However, if they purchased Property B, would have less than half the equity i.e. $168,000. That is a substantial difference of $210,000!

But it’s how this difference compounds that’s most important
If in 5 years’ time, Rick and Karen were contemplating upgrading their property to buy a larger family home, the differential in equity will have a substantial impact on their budget.

Assuming that they want to borrow a maximum of 80% of the new home’s value, a deposit of $378,000 will allow Rick and Karen to spend up to $1.45 million (allowing for 6% for costs including stamp duty).

However, a $168,000 deposit will only allow Rick and Karen to spend $650,000, which is less than their current property value! If they buy for $1 million, they will have to borrow 90% of the value and pay for mortgage insurance (which will cost over $35,000!).

Therefore, using this example, the difference between buying the right versus wrong property could be the difference between being able to take the next step (and buy a family home), or not.

It should be noted that this equity gap will continue to grow. If Rick and Karen purchased Property B, they may be forced to buy their larger family home in a suburb further away from the CBD (due to budgetary constraints). This will mean they will have a lower value asset that attracts a lower growth rate – the equity differential could be massive, as charted below.




And you can put that equity to work
To make matters worse, not only will buying the right property help Rick and Karen build more equity in their home, but they will be able to leverage that equity to build an investment portfolio. This could include borrowing to buy an investment property or invest in the share market.

Should you buy a property purely to make a quick profit?
No. In order to minimise your risk, it’s important to buy an investment-grade property that has sound long term fundamentals. A property that is well positioned to generate an above average capital growth rate over the long term. That must never be compromised.

However, if your goal is to upgrade or invest in the shorter term, then it does make sense to pick a property type or location that is expected to deliver a r

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 734d903e-7d36-46d3-8334-356fecd532d5 Wed, 26 Aug 2020 13:15:00 +1000 995 Investopoly,rules of the lending game,wemyss,investment property,property investing,first home buyers,investment grade 1 127 false Property data is not always right, or helpful Property data is not always right, or helpful My professional life has been all about “the numbers” for more than two decades! So, as an accountant and financial advisor, it pains me to say that numbers are not always right!

Numbers are factual, verifiable, logical and the ‘robustness’ gives me a lot of confidence. However, when it comes to investing in property, a focus on numbers alone can cause very costly mistakes.

Evidenced-based approaches are rooted in simple math
I am a strong believer in only employing evidenced-based investment methodologies. That is, only invest when there is overwhelming evidence that the methodology will generate the investment returns you desire. If there is no evidence, then it is too risky. You may as well throw darts at a dartboard.

Of course, normally we look to math to verify the evidence. Therefore, I appreciate that me stating that numbers can’t always be trusted may be somewhat contradictory.

Why can the numbers be wrong?
It is very important to understand what has driven the data, because not all data is reliable or meaningful.

Suburb median data is a good example of this point. Sometimes I see advisors or journalists reporting median house price growth in a given suburb, often to support an investment case. But it’s important to understand the data before drawing any conclusions.

Was the volume (number) of sales statistically significant? Were the properties that sold during the period representative of the property type you are considering investing in? Were the results driven by a once-off change such as the release of more land, major developments or the gentrification of the suburb?

Just because a suburb has generated price growth of 9% p.a. over the past 5 or 10 years, doesn’t necessarily suggest its future growth will be in line with this.

Property specific data
Property specific historical data can also sometimes be unreliable.

It is important to ascertain whether past sales were representative of the true market value of the subject property. Situations such as sales between related parties, transactions in very buoyant markets (i.e. if purchaser overpaid), if any capital improvements were made to the property during the period and so on. These can all affect the implied capital growth rate.

Not every sale perfectly reflects a property’s intrinsic value, so care must be taken.

Data can over or under inflate historic growth rates
Data might suggest that a particular suburb or geographical location is primed for future growth, but if the data is wrong or unreliable, you could make a very costly investment mistake.

Similarly, individual property growth data might suggest a property is a good or bad investment, but the reality might be different. You must understand the story behind the numbers.

And this is where the art comes in…
You should never make important property decisions on data alone. The data only gets you part of the way. You must compliment that data with local area knowledge and expertise.

Having many years of experience in a geographical market allows you to understand a market better and appreciate any changes in value drivers. This is where the “art of property” plays an important role. It gives context to the data and allows you to decide on its relevance.

Paying for someone else’s experience
According to the Guardian, psychologist Dan Ariely (sidebar: he has given some interesting and entertaining

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> My professional life has been all about “the numbers” for more than two decades! So, as an accountant and financial advisor, it pains me to say that numbers are not always right!

Numbers are factual, verifiable, logical and the ‘robustness’ gives me a lot of confidence. However, when it comes to investing in property, a focus on numbers alone can cause very costly mistakes.

Evidenced-based approaches are rooted in simple math
I am a strong believer in only employing evidenced-based investment methodologies. That is, only invest when there is overwhelming evidence that the methodology will generate the investment returns you desire. If there is no evidence, then it is too risky. You may as well throw darts at a dartboard.

Of course, normally we look to math to verify the evidence. Therefore, I appreciate that me stating that numbers can’t always be trusted may be somewhat contradictory.

Why can the numbers be wrong?
It is very important to understand what has driven the data, because not all data is reliable or meaningful.

Suburb median data is a good example of this point. Sometimes I see advisors or journalists reporting median house price growth in a given suburb, often to support an investment case. But it’s important to understand the data before drawing any conclusions.

Was the volume (number) of sales statistically significant? Were the properties that sold during the period representative of the property type you are considering investing in? Were the results driven by a once-off change such as the release of more land, major developments or the gentrification of the suburb?

Just because a suburb has generated price growth of 9% p.a. over the past 5 or 10 years, doesn’t necessarily suggest its future growth will be in line with this.

Property specific data
Property specific historical data can also sometimes be unreliable.

It is important to ascertain whether past sales were representative of the true market value of the subject property. Situations such as sales between related parties, transactions in very buoyant markets (i.e. if purchaser overpaid), if any capital improvements were made to the property during the period and so on. These can all affect the implied capital growth rate.

Not every sale perfectly reflects a property’s intrinsic value, so care must be taken.

Data can over or under inflate historic growth rates
Data might suggest that a particular suburb or geographical location is primed for future growth, but if the data is wrong or unreliable, you could make a very costly investment mistake.

Similarly, individual property growth data might suggest a property is a good or bad investment, but the reality might be different. You must understand the story behind the numbers.

And this is where the art comes in…
You should never make important property decisions on data alone. The data only gets you part of the way. You must compliment that data with local area knowledge and expertise.

Having many years of experience in a geographical market allows you to understand a market better and appreciate any changes in value drivers. This is where the “art of property” plays an important role. It gives context to the data and allows you to decide on its relevance.

Paying for someone else’s experience
According to the Guardian, psychologist Dan Ariely (sidebar: he has given some interesting and entertaining

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss e308eefc-4278-4553-a063-5d4e84c27bec Wed, 19 Aug 2020 10:45:00 +1000 1025 rules of the lending game,investopoly,independent financial advice,property investing,property data,investing in property,wemyss, 1 126 false 5 steps to (safely) maximise your borrowing power 5 steps to (safely) maximise your borrowing power Slides - Click here

Watch the video - click here

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Slides - Click here

Watch the video - click here

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 59d0fa93-082c-431e-b479-1992caac2e20 Thu, 13 Aug 2020 09:54:00 +1000 3937 rules of the lending game,investopoly,wemyss,borrowing capacity,borrowing,gearing,property investing,borrowing to invest,investment strategy, 1 125 false Why would you refinance? (Other than to get a lower rate) Why would you refinance? (Other than to get a lower rate) According to the ABS, the number of people refinancing their mortgage increased by over 63% in the year to May 2020. Quite often people think the only reason to refinance is to obtain a lower interest rate. However, this thinking is incorrect. Typically, you don’t need to refinance to obtain a lower interest rate (more about this below). As an experienced investor myself, I can tell you that there are far more important reasons to refinance your loans.

What is a refinance?
This might sound like a basic question. However, there are two types of refinances; internal and external. A refinance essentially involves entering into a new loan agreement. You can do that with your existing lender/bank, and this is called an internal refinance. Alternatively, you can switch to a new lender and this is called an external refinance. This distinction is important for my discussion below.

The first two reasons are the most important
Over the past 20 years, the primary motives for refinancing my personal mortgages were because of the first two reasons below. I’ll share why later in this blog.

Reason # 1: restructure your loans
Your loan structure can have a big impact on your cash flow and ability to invest. Restructuring your loan repayments, how loans are secured, loan terms and so on can provide substantial financial benefits. Here are a few examples:

Resetting your interest only term
As I explained in a blog last year, interest only terms typically run for 5 years only. Once that initial 5-year term expires, most (but not all) lenders allow borrowers to rollover onto an additional 5-year term. However, once you have used two 5-year terms, the only way to get another is to complete an external refinance, and switch to a new lender.

Resetting your loan term to 30 years
Almost all loan contracts are based on a 30-year loan term. If you elect to repay interest only, then your 30-year term will be split into two parts; one 5-year interest only term and the remaining 25-years on principal and interest (P&I) repayments. Therefore, if you use two 5-year interest terms (a second interest only term is typically only permitted for investment loans) and then switch to P&I repayments, your repayments will be based on the remaining term of 20-years. This will increase your minimum repayments. For example, repayments on a $800,000 loan over 20 years are approximately $4,440 per month. However, refinancing the loan to back to 30-years reduces the repayments to $3,380 per month thereby improving a borrower’s cash flow. You can achieve this by completing either an internal or external refinance.

Release security, especially if you are planning to sell a property
It is important that loans are structured correctly to minimise your risk (minimise security), maximise control and ensure tax deductions are never compromised. To this end we often assist clients in restructuring their loans which could include unwinding cross-securitisation, consolidating loan accounts, splitting accounts, releasing property as security and so on.

If a client plans to sell a property, we will consider doing two things in advance. Firstly, where possible, we will release that property as security. This ensures that bank has no control over the sale funds. Secondly, we will consider whether to retain the existing l

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> According to the ABS, the number of people refinancing their mortgage increased by over 63% in the year to May 2020. Quite often people think the only reason to refinance is to obtain a lower interest rate. However, this thinking is incorrect. Typically, you don’t need to refinance to obtain a lower interest rate (more about this below). As an experienced investor myself, I can tell you that there are far more important reasons to refinance your loans.

What is a refinance?
This might sound like a basic question. However, there are two types of refinances; internal and external. A refinance essentially involves entering into a new loan agreement. You can do that with your existing lender/bank, and this is called an internal refinance. Alternatively, you can switch to a new lender and this is called an external refinance. This distinction is important for my discussion below.

The first two reasons are the most important
Over the past 20 years, the primary motives for refinancing my personal mortgages were because of the first two reasons below. I’ll share why later in this blog.

Reason # 1: restructure your loans
Your loan structure can have a big impact on your cash flow and ability to invest. Restructuring your loan repayments, how loans are secured, loan terms and so on can provide substantial financial benefits. Here are a few examples:

Resetting your interest only term
As I explained in a blog last year, interest only terms typically run for 5 years only. Once that initial 5-year term expires, most (but not all) lenders allow borrowers to rollover onto an additional 5-year term. However, once you have used two 5-year terms, the only way to get another is to complete an external refinance, and switch to a new lender.

Resetting your loan term to 30 years
Almost all loan contracts are based on a 30-year loan term. If you elect to repay interest only, then your 30-year term will be split into two parts; one 5-year interest only term and the remaining 25-years on principal and interest (P&I) repayments. Therefore, if you use two 5-year interest terms (a second interest only term is typically only permitted for investment loans) and then switch to P&I repayments, your repayments will be based on the remaining term of 20-years. This will increase your minimum repayments. For example, repayments on a $800,000 loan over 20 years are approximately $4,440 per month. However, refinancing the loan to back to 30-years reduces the repayments to $3,380 per month thereby improving a borrower’s cash flow. You can achieve this by completing either an internal or external refinance.

Release security, especially if you are planning to sell a property
It is important that loans are structured correctly to minimise your risk (minimise security), maximise control and ensure tax deductions are never compromised. To this end we often assist clients in restructuring their loans which could include unwinding cross-securitisation, consolidating loan accounts, splitting accounts, releasing property as security and so on.

If a client plans to sell a property, we will consider doing two things in advance. Firstly, where possible, we will release that property as security. This ensures that bank has no control over the sale funds. Secondly, we will consider whether to retain the existing l

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 9d503392-414b-4ead-abb5-1ec3ab073496 Wed, 05 Aug 2020 12:04:00 +1000 1423 rules of the lending game,investopoly,wemyss,refinancing,borrowing capacity,loan strcuture,property investing 1 124 false Why you should stick to your day job Why you should stick to your day job There are three ways to generate passive income; start a business, invest or speculate. The key word in that sentence is passive. Passive means you can generate economic benefits without the requirement of your personal exertion. Since it doesn’t require personal exertion, it frees up your time to spend it on activities or with the people you love.

Each of these three options have merit. But the important thing to note is that not all three will suit everyone. This point is very important to appreciate, and could save you a lot of time, stress and money!

A quick bit of theory first
Legendary author and prolific researcher, Jim Collins formulated a concept called the “Hedgehog Concept”. The Hedgehog Concept was based on the famous essay by Isaiah Berlin in which he refers to an ancient Greek story: “The fox knows many things, but the hedgehog knows one big thing.”

It was Collins’ thesis that successful companies are laser-focused on the Hedgehog Concept, which is the intersection of 3 important considerations or questions (i.e. the orange portion in the illustration below):
1. what you are deeply passionate about,
2. what you can be the best in the world at, and
3. what best drives your economic or resource engine.

Successful companies focus on delivering products or services that they can be the best at and ignore all other opportunities.

(By the way, Jim Collins’ book, Good to Great is one of the best business books I have read.)

Let me share a quick story about me
Before I relate this theory to personal investment, let me share a story with you.

I have some friends that are successful property developers and make substantial six-figure profits. In the past, I have considered whether I should get involved in property development too, especially since I have the property, finance and taxation knowledge. However, many years ago, I decided to focus on my Hedgehog. Property development just isn’t for me.

Property developing takes a lot of time. So, I could either spend my time on developing property with the aim of generating a once-off profit. Alternatively, I could spend that time thinking about and helping my clients build wealth. Just one idea that helps a client creates a lot of value for them and me. That client will continue to do business with my firm and will likely refer their friends. And that will generate long term value for both of us.

I am deeply passionate about delivering the best independent financial advice. I am good at the work I do. And accumulating a number of happy ongoing clients generates stable economic returns. This is my Hedgehog and when I stick to it, my personal wealth grows. The reverse is true when I have deviated (which I did before I learnt this lesson).

One of my mentors, who has operated a successful business for more than 50 years and built significant personal wealth, advised me; “Every time I’ve done something outside of my core business, it has cost me time and money.”

Medico mortgage default rates are low if they stick to what they know
The big 4 banks all have special divisions that target doctors (and have for many years) because it is widely accepted that mortgage default rates are substantially lower than the average. This stands to reason given few doctors are ever unemployed and their income is very stable and typically higher than the average.

This is true when lending to a doctor

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> There are three ways to generate passive income; start a business, invest or speculate. The key word in that sentence is passive. Passive means you can generate economic benefits without the requirement of your personal exertion. Since it doesn’t require personal exertion, it frees up your time to spend it on activities or with the people you love.

Each of these three options have merit. But the important thing to note is that not all three will suit everyone. This point is very important to appreciate, and could save you a lot of time, stress and money!

A quick bit of theory first
Legendary author and prolific researcher, Jim Collins formulated a concept called the “Hedgehog Concept”. The Hedgehog Concept was based on the famous essay by Isaiah Berlin in which he refers to an ancient Greek story: “The fox knows many things, but the hedgehog knows one big thing.”

It was Collins’ thesis that successful companies are laser-focused on the Hedgehog Concept, which is the intersection of 3 important considerations or questions (i.e. the orange portion in the illustration below):
1. what you are deeply passionate about,
2. what you can be the best in the world at, and
3. what best drives your economic or resource engine.

Successful companies focus on delivering products or services that they can be the best at and ignore all other opportunities.

(By the way, Jim Collins’ book, Good to Great is one of the best business books I have read.)

Let me share a quick story about me
Before I relate this theory to personal investment, let me share a story with you.

I have some friends that are successful property developers and make substantial six-figure profits. In the past, I have considered whether I should get involved in property development too, especially since I have the property, finance and taxation knowledge. However, many years ago, I decided to focus on my Hedgehog. Property development just isn’t for me.

Property developing takes a lot of time. So, I could either spend my time on developing property with the aim of generating a once-off profit. Alternatively, I could spend that time thinking about and helping my clients build wealth. Just one idea that helps a client creates a lot of value for them and me. That client will continue to do business with my firm and will likely refer their friends. And that will generate long term value for both of us.

I am deeply passionate about delivering the best independent financial advice. I am good at the work I do. And accumulating a number of happy ongoing clients generates stable economic returns. This is my Hedgehog and when I stick to it, my personal wealth grows. The reverse is true when I have deviated (which I did before I learnt this lesson).

One of my mentors, who has operated a successful business for more than 50 years and built significant personal wealth, advised me; “Every time I’ve done something outside of my core business, it has cost me time and money.”

Medico mortgage default rates are low if they stick to what they know
The big 4 banks all have special divisions that target doctors (and have for many years) because it is widely accepted that mortgage default rates are substantially lower than the average. This stands to reason given few doctors are ever unemployed and their income is very stable and typically higher than the average.

This is true when lending to a doctor

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 1285e0d6-e82f-439a-a2c3-4805cdc5e238 Wed, 29 Jul 2020 09:00:00 +1000 1054 investopoly,rules of the lending game,independent financial advice,Hedgehog Concept,investing,property investing,property investment,shares,building wealth 1 123 false Which super fund produced the best returns in 2019/20? Which super fund produced the best returns in 2019/20? Despite the share market volatility as a result of Covid-19, all major industry super funds produced a positive investment return over the past financial year. Whilst that might seem entirely good news, there are some concerns for which industry super fund members should be aware of.

Let’s start with the good news first
I have compared the largest 8 Australian industry super funds. According to data collated by our research provider, Lonsec (SuperRatings), Cbus produced the best returns in the 2019/20 financial year. However, AustralianSuper produced the best long term (10 years) return, although there not a big difference between the top 3 funds (Hostplus, UniSuper and AustralianSuper). I have compared the investment options with similar levels of growth assets – but more on this below.

See table on blog (website)

Of course, longer term returns are what is most important. It is not always possible or even desirable to produce the best returns each and every year. Sometimes a fund has to take too much risk to do so.

Investment returns are important for marketing
There is no better marketing than achieving the highest investment return as it attracts a lot of new superannuation members.

I was very interested to read this article in the Australian Financial Review about Hostplus’ balanced option. For the financial year up until May 2020, it had lost 3.5%. However, as timing would have it, on 29 June 2020, the Fund decided to revalue its unlisted property 6.8% higher. This resulted in halving its its Balance options loss to -1.74% for the financial year. How convenient. I discuss my concerns with respect to transparency and accountability below.

There are a number of ways a super fund can window-dress its returns including revaluing unlisted assets and changing the asset allocation i.e. being more or less aggressive than the desired allocation of the investment option.

Fees vary substantially between funds
If your super balance is relatively low, fees (and contributions) matter more than investment returns. However, as your balance grows (and certainly if your balance is above $250,000), investment returns become the most important factor.

Out of the selected funds, First State Super (FSS) charges the highest fees for its balanced option at 0.95%, whereas UniSuper is much cheaper at 0.53%. That is, UniSuper’s fees are nearly half as much as FSS, and that is likely to have a substantial impact on your balance over time.

Importantly, you do not have to pay higher fees in order to generate higher investment returns. You will note that UniSuper is the most inexpensive fund with close to the highest returns while for FSS, the reverse is true. The less you pay, the more you receive.





Concern 1: Some funds invest more aggressively it appears
Pre-mixed investment options allow you to invest your super in a way that is commensurate with your risk appetite. If you are conservative, then you must select a conservative investment option. However, if you are aggressive, then a ‘growth’ or ‘high growth’ investment option might suit you. And if you are in between, like most people, a ‘balanced’ investment option is the way to go.

However, most ‘balanced’ options are not really that balanced. Instead, their asset allocation is closer to growth. The reason for this is they are chasing higher investment returns, to make their fund appear more attractive.

You might be surprised

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Despite the share market volatility as a result of Covid-19, all major industry super funds produced a positive investment return over the past financial year. Whilst that might seem entirely good news, there are some concerns for which industry super fund members should be aware of.

Let’s start with the good news first
I have compared the largest 8 Australian industry super funds. According to data collated by our research provider, Lonsec (SuperRatings), Cbus produced the best returns in the 2019/20 financial year. However, AustralianSuper produced the best long term (10 years) return, although there not a big difference between the top 3 funds (Hostplus, UniSuper and AustralianSuper). I have compared the investment options with similar levels of growth assets – but more on this below.

See table on blog (website)

Of course, longer term returns are what is most important. It is not always possible or even desirable to produce the best returns each and every year. Sometimes a fund has to take too much risk to do so.

Investment returns are important for marketing
There is no better marketing than achieving the highest investment return as it attracts a lot of new superannuation members.

I was very interested to read this article in the Australian Financial Review about Hostplus’ balanced option. For the financial year up until May 2020, it had lost 3.5%. However, as timing would have it, on 29 June 2020, the Fund decided to revalue its unlisted property 6.8% higher. This resulted in halving its its Balance options loss to -1.74% for the financial year. How convenient. I discuss my concerns with respect to transparency and accountability below.

There are a number of ways a super fund can window-dress its returns including revaluing unlisted assets and changing the asset allocation i.e. being more or less aggressive than the desired allocation of the investment option.

Fees vary substantially between funds
If your super balance is relatively low, fees (and contributions) matter more than investment returns. However, as your balance grows (and certainly if your balance is above $250,000), investment returns become the most important factor.

Out of the selected funds, First State Super (FSS) charges the highest fees for its balanced option at 0.95%, whereas UniSuper is much cheaper at 0.53%. That is, UniSuper’s fees are nearly half as much as FSS, and that is likely to have a substantial impact on your balance over time.

Importantly, you do not have to pay higher fees in order to generate higher investment returns. You will note that UniSuper is the most inexpensive fund with close to the highest returns while for FSS, the reverse is true. The less you pay, the more you receive.





Concern 1: Some funds invest more aggressively it appears
Pre-mixed investment options allow you to invest your super in a way that is commensurate with your risk appetite. If you are conservative, then you must select a conservative investment option. However, if you are aggressive, then a ‘growth’ or ‘high growth’ investment option might suit you. And if you are in between, like most people, a ‘balanced’ investment option is the way to go.

However, most ‘balanced’ options are not really that balanced. Instead, their asset allocation is closer to growth. The reason for this is they are chasing higher investment returns, to make their fund appear more attractive.

You might be surprised

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 2cf6734d-3de0-4c84-b883-72fd42e3c832 Thu, 23 Jul 2020 10:53:00 +1000 1648 investopoly,wemyss,rules of the lending game,super funds,industry super funds,super returns 2020,australiansuper,hostplus,hostplus indexed balanced 1 122 false Why is the stock market crazy? Why is the stock market crazy? You may have read commentary that the share market isn’t reflecting reality at the moment. For example, the share market can rise by 3% on the same day that we receive bad news in respect to the spread of the virus. Spectators are left thinking how can market values rise when global economic expectations are so negative? That is a fair question.

Then there’s stocks like Tesla in the US and Afterpay in Australia.

Electronic car manufacture, Tesla's share price has risen by 50% over the past couple of weeks. Its market value is now equal to the total value of Australia’s big 4 banks plus BHP combined. The difference is that the banks and BHP make total profit of $12 billion p.a. whereas Tesla loses money (and has never made money)!

These exuberant valuations are happening here too. Towards the end of March, Australian listed FinTech company Afterpay was trading just above $8 per share. Today, it is trading at circa $70 per share and is worth over $20 billion. It also doesn’t make a profit.

So, how do you navigate a market that doesn’t make a lot of sense?

The Robinhood effect
One of the contributors to this irrational exuberance is the influx of amateur investors – often first-time investors. Back in May, Australian regulator ASIC noted there had been a 340% increase in the opening of new share trading accounts. The US has also reported a record number of new account openings this year.

The theory is that people are becoming bored being locked in their homes. Sports betting and casinos are closed. So, people have turned their attention to “gambling” on the share market.

FinTec companies, particularly in the US have jumped onto this trend. US provider, Robinhood is best known for gamifying share trading. It offers free stock to anyone that opens a new account – and additional free stock if you refer friends. The screen turns green if your trade is in profit (and red if its not), sends you confetti when you buy and gives you your money straight away after you sell, so you can trade again (it takes 3 days in Australia). Many brokerages in the US now don’t charge commissions or fees – instead they hide their margin in the quoted share prices. All of these things are aimed at encouraging people to gamble, not invest.

Similarly, ASIC has noted its concern with Australian retail investors trading in pursuit of quick profits. Its data suggests most are unsuccessful and lose money. For example, per ASIC, in the week of 16-22 March 2020, retail clients’ net losses from trading CFDs were $234 million.

Of course, this behaviour is against everything we believe at ProSolution and is more akin to gambling than it is investing. But speculators (gamblers) can have a substantial impact on markets in the short term – Bitcoin is an excellent example of this.

Everything is popular until it’s not. This will end in tears

Well-respected stock market analyst, Rob Arnott highlighted in this interview that Amazon is currently valued on a price-earnings (PE) ratio of 120 times. Even if you believe that Amazon could grow its sales by 20% p.a. over the next 10 years (which would mean that in 10 years it would be larger than the entire retail marketplace globally – you’d have to be sce

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> You may have read commentary that the share market isn’t reflecting reality at the moment. For example, the share market can rise by 3% on the same day that we receive bad news in respect to the spread of the virus. Spectators are left thinking how can market values rise when global economic expectations are so negative? That is a fair question.

Then there’s stocks like Tesla in the US and Afterpay in Australia.

Electronic car manufacture, Tesla's share price has risen by 50% over the past couple of weeks. Its market value is now equal to the total value of Australia’s big 4 banks plus BHP combined. The difference is that the banks and BHP make total profit of $12 billion p.a. whereas Tesla loses money (and has never made money)!

These exuberant valuations are happening here too. Towards the end of March, Australian listed FinTech company Afterpay was trading just above $8 per share. Today, it is trading at circa $70 per share and is worth over $20 billion. It also doesn’t make a profit.

So, how do you navigate a market that doesn’t make a lot of sense?

The Robinhood effect
One of the contributors to this irrational exuberance is the influx of amateur investors – often first-time investors. Back in May, Australian regulator ASIC noted there had been a 340% increase in the opening of new share trading accounts. The US has also reported a record number of new account openings this year.

The theory is that people are becoming bored being locked in their homes. Sports betting and casinos are closed. So, people have turned their attention to “gambling” on the share market.

FinTec companies, particularly in the US have jumped onto this trend. US provider, Robinhood is best known for gamifying share trading. It offers free stock to anyone that opens a new account – and additional free stock if you refer friends. The screen turns green if your trade is in profit (and red if its not), sends you confetti when you buy and gives you your money straight away after you sell, so you can trade again (it takes 3 days in Australia). Many brokerages in the US now don’t charge commissions or fees – instead they hide their margin in the quoted share prices. All of these things are aimed at encouraging people to gamble, not invest.

Similarly, ASIC has noted its concern with Australian retail investors trading in pursuit of quick profits. Its data suggests most are unsuccessful and lose money. For example, per ASIC, in the week of 16-22 March 2020, retail clients’ net losses from trading CFDs were $234 million.

Of course, this behaviour is against everything we believe at ProSolution and is more akin to gambling than it is investing. But speculators (gamblers) can have a substantial impact on markets in the short term – Bitcoin is an excellent example of this.

Everything is popular until it’s not. This will end in tears

Well-respected stock market analyst, Rob Arnott highlighted in this interview that Amazon is currently valued on a price-earnings (PE) ratio of 120 times. Even if you believe that Amazon could grow its sales by 20% p.a. over the next 10 years (which would mean that in 10 years it would be larger than the entire retail marketplace globally – you’d have to be sce

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 2566314f-2fbf-45b3-b687-fd2a3283dc75 Wed, 15 Jul 2020 09:31:00 +1000 1077 investopoly,wemyss,rules of the lending game,share market,index funds. covid-19, 1 121 false What impact will Melbourne's virus lockdown 2.0 have on property and economy? What impact will Melbourne's virus lockdown 2.0 have on property and economy? Melbourne’s Covid transmission outbreak has been widely publicised by the media. Melbourne’s daily positive test rate is relatively benign by world standards (i.e. 0.5-0.6% versus 7.5% in the USA). However, the reinstated 6-week lockdown of Melbourne is likely to have a negative impact on Australia’s economy. Melbourne is responsible for producing over 19% of Australia’s GDP.

Spending has bounced back strongly with Victoria lagging
Firstly, let’s start with the good news. The good news is that according to ANZ Economics, spending has bounced back relatively strongly (see charts below - click to enlarge).




Spending overall is up 5.5% year-on-year to 3 July 2020. Households are spending more on goods and groceries but substantially less on travel and entertainment.

Spending in Victoria is lagging compared to other States, due to the stricter lockdown rules.

Victoria’s lockdowns will give rise to higher unemployment and a prolonged recession
Up until a few weeks ago, I was firmly in the V-shape camp. That is, I expected the Australian economy would recover sharply after lockdown restrictions were lifted. I based this view on the assumption that there would be more targeted government stimulus post September. To date, economic data (similar to the spending data above) has been supportive of this view.

However, given Melbourne accounts for over 19% of Australia’s total GDP, Melbourne’s reinstated lockdown is likely to weigh heavily on the nation’s economic recovery.

It is my view that a second lockdown will substantially harm consumer and business confidence. A few weeks ago, restaurants and entertainment venues were contemplating reopening. Now they won’t be able to do that for at least another 6 weeks. There are not many (otherwise) viable businesses that could survive a 5-month closure. As a result, I fear that more businesses will not survive this period and as such, unemployment will rise and take much longer to recover.

Based on data from March & April, the following categories of expenditure will likely suffer the most: dining and takeaway, accommodation, entertainment and travel.

Impact of immigration, education and population growth
Border closures will have a negative impact on population growth due to reduced levels of overseas and interstate migration. And population growth drives economic activity and property values.

As discussed in my recent presentation (here), it is important to understand the migration statistics. Around 60% of Australia’s population growth is from net overseas migration. Anyone that lives in Australia for 12 out of the past 16 months is included in this statistic. Approximately 75% of immigrants are on temporary visas. Given temporary visas holders must sell any property within 3 months from leaving Australia, it is fair to assume that most of these people rent accommodation, rather than own it.

Net overseas migration (including both temporary and permanent) is typically represented by three main categories:
§ 33% from the higher education sector – students aged between 18 and 22;
§ 29% from skilled migration or working holiday makers. Typical age is between 22 and 37 and 85% go to the three Eastern States; and
§ 21% from non-working visitors (these are all temporary visas holders of course).

Therefore, whilst overseas migrants de

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Melbourne’s Covid transmission outbreak has been widely publicised by the media. Melbourne’s daily positive test rate is relatively benign by world standards (i.e. 0.5-0.6% versus 7.5% in the USA). However, the reinstated 6-week lockdown of Melbourne is likely to have a negative impact on Australia’s economy. Melbourne is responsible for producing over 19% of Australia’s GDP.

Spending has bounced back strongly with Victoria lagging
Firstly, let’s start with the good news. The good news is that according to ANZ Economics, spending has bounced back relatively strongly (see charts below - click to enlarge).




Spending overall is up 5.5% year-on-year to 3 July 2020. Households are spending more on goods and groceries but substantially less on travel and entertainment.

Spending in Victoria is lagging compared to other States, due to the stricter lockdown rules.

Victoria’s lockdowns will give rise to higher unemployment and a prolonged recession
Up until a few weeks ago, I was firmly in the V-shape camp. That is, I expected the Australian economy would recover sharply after lockdown restrictions were lifted. I based this view on the assumption that there would be more targeted government stimulus post September. To date, economic data (similar to the spending data above) has been supportive of this view.

However, given Melbourne accounts for over 19% of Australia’s total GDP, Melbourne’s reinstated lockdown is likely to weigh heavily on the nation’s economic recovery.

It is my view that a second lockdown will substantially harm consumer and business confidence. A few weeks ago, restaurants and entertainment venues were contemplating reopening. Now they won’t be able to do that for at least another 6 weeks. There are not many (otherwise) viable businesses that could survive a 5-month closure. As a result, I fear that more businesses will not survive this period and as such, unemployment will rise and take much longer to recover.

Based on data from March & April, the following categories of expenditure will likely suffer the most: dining and takeaway, accommodation, entertainment and travel.

Impact of immigration, education and population growth
Border closures will have a negative impact on population growth due to reduced levels of overseas and interstate migration. And population growth drives economic activity and property values.

As discussed in my recent presentation (here), it is important to understand the migration statistics. Around 60% of Australia’s population growth is from net overseas migration. Anyone that lives in Australia for 12 out of the past 16 months is included in this statistic. Approximately 75% of immigrants are on temporary visas. Given temporary visas holders must sell any property within 3 months from leaving Australia, it is fair to assume that most of these people rent accommodation, rather than own it.

Net overseas migration (including both temporary and permanent) is typically represented by three main categories:
§ 33% from the higher education sector – students aged between 18 and 22;
§ 29% from skilled migration or working holiday makers. Typical age is between 22 and 37 and 85% go to the three Eastern States; and
§ 21% from non-working visitors (these are all temporary visas holders of course).

Therefore, whilst overseas migrants de

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

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Email us at questions@investopoly.com.au

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss ce5b935d-e447-4db0-b8bf-4f6ae575ee9c Wed, 08 Jul 2020 12:00:00 +1000 1129 investopoly,rules of the lending game,covid,property investing,property prices,investing,financial planning,Melbourne property, 1 120 false Proof that 'what' you buy, not 'when' or 'how much you pay', matters the most Proof that 'what' you buy, not 'when' or 'how much you pay', matters the most The price you pay for an investment property will only matter if you purchase the wrong asset. An investment grade asset will, in the long run, mask any purchase price errors that you may have made. That is why focusing on the quality of the asset is easily the most important thing you must do when investing in property. Simple math proves timing the market or buying below fair value is relatively meaningless.

Purchasing above or below intrinsic value
Let’s face it. We all want to get the best deal we can, and no one wants to pay any more for a property than they have to. It is my guess that the desire to buy well is driven mainly by two things; ego and misinformation.

Most people feel stupid if they subsequently realise that they overpaid for an asset - and none of us like feeling stupid.

The misinformation problem is that most people think the price they pay for an asset will have an impact on its performance. But that is not true for investment grade assets.

Show me the numbers
Anyone that has followed my blogs for any length of time knows that I love to dive into the numbers. This topic is no different. My findings are summarised in the table below.




I compared the after-tax compounding returns resulting from investing in a $750,000 property, holding it for 20 years and then selling. I assumed that you borrowed the full cost of this acquisition (including stamp duty). The only cash you had to contribute to the investment is the holding costs i.e. the difference between the loan repayments and net rental income. I then calculated the internal rate of return - which essentially is your annual compounding investment return after tax.

I then varied two assumptions:
§ Whether the price you paid for the asset was above or below intrinsic value; and
§ The average capital growth rate over the 20-year holding period.

The reason the investment returns ranges (far right column) might seem high, particularly for higher growth scenarios, is because of the impact of gearing i.e. you achieve relatively large returns for minimal cash contributed towards the investment.

What did I find?
If you purchase a property that has very low growth prospects e.g. 3% p.a. over 20 years, the price you pay for that asset will have a big impact on your investment return. For example, if you purchase the asset for a price 10% below its intrinsic value (i.e. buy well), you improve your return by 75%. Whereas if you overpay by 10%, you reduce your return by 77%. But the important point is that the return range is relatively low i.e. between 1% and 7.5% p.a.

However, if you buy a high-quality asset that will deliver say 9% p.a. of capital growth on average over the next 20 years, it doesn’t really matter if you overpay. For example, if you pay 10% too much, your return reduces by 8% - but you still achieve a compound annual return of over 21% p.a., which isn’t anything to sneeze at.

This data shows that the best way to mitigate risk is to level up on quality.

Great property for a fair price
Adapting a quote attributed to Warren Buffett, I assert that “I would much prefer to buy a great property for a fair price than a fair property for a great price”. That’s because a high growth asset will mask any purchase price mistakes.

Buying well (or not) will only impact your investment returns for one year (it’s a one-off event). However, the quality of your asset will impact investment returns each and every year. As such, you will remember (or be reminded of) an asset's quality long after you have f

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> The price you pay for an investment property will only matter if you purchase the wrong asset. An investment grade asset will, in the long run, mask any purchase price errors that you may have made. That is why focusing on the quality of the asset is easily the most important thing you must do when investing in property. Simple math proves timing the market or buying below fair value is relatively meaningless.

Purchasing above or below intrinsic value
Let’s face it. We all want to get the best deal we can, and no one wants to pay any more for a property than they have to. It is my guess that the desire to buy well is driven mainly by two things; ego and misinformation.

Most people feel stupid if they subsequently realise that they overpaid for an asset - and none of us like feeling stupid.

The misinformation problem is that most people think the price they pay for an asset will have an impact on its performance. But that is not true for investment grade assets.

Show me the numbers
Anyone that has followed my blogs for any length of time knows that I love to dive into the numbers. This topic is no different. My findings are summarised in the table below.




I compared the after-tax compounding returns resulting from investing in a $750,000 property, holding it for 20 years and then selling. I assumed that you borrowed the full cost of this acquisition (including stamp duty). The only cash you had to contribute to the investment is the holding costs i.e. the difference between the loan repayments and net rental income. I then calculated the internal rate of return - which essentially is your annual compounding investment return after tax.

I then varied two assumptions:
§ Whether the price you paid for the asset was above or below intrinsic value; and
§ The average capital growth rate over the 20-year holding period.

The reason the investment returns ranges (far right column) might seem high, particularly for higher growth scenarios, is because of the impact of gearing i.e. you achieve relatively large returns for minimal cash contributed towards the investment.

What did I find?
If you purchase a property that has very low growth prospects e.g. 3% p.a. over 20 years, the price you pay for that asset will have a big impact on your investment return. For example, if you purchase the asset for a price 10% below its intrinsic value (i.e. buy well), you improve your return by 75%. Whereas if you overpay by 10%, you reduce your return by 77%. But the important point is that the return range is relatively low i.e. between 1% and 7.5% p.a.

However, if you buy a high-quality asset that will deliver say 9% p.a. of capital growth on average over the next 20 years, it doesn’t really matter if you overpay. For example, if you pay 10% too much, your return reduces by 8% - but you still achieve a compound annual return of over 21% p.a., which isn’t anything to sneeze at.

This data shows that the best way to mitigate risk is to level up on quality.

Great property for a fair price
Adapting a quote attributed to Warren Buffett, I assert that “I would much prefer to buy a great property for a fair price than a fair property for a great price”. That’s because a high growth asset will mask any purchase price mistakes.

Buying well (or not) will only impact your investment returns for one year (it’s a one-off event). However, the quality of your asset will impact investment returns each and every year. As such, you will remember (or be reminded of) an asset's quality long after you have f

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 6a64ab9e-b49d-4616-ab93-9da7e6fd1ec3 Wed, 01 Jul 2020 08:00:00 +1000 949 Investopoly,rules of the lending game,wemyss,prosolution,investing in property,property investing,independent financial advice 1 119 false Not all low-cost indexes exhibit the same risks and opportunities Not all low-cost indexes exhibit the same risks and opportunities Over the past decade, investors and large institutions have been deserting expensive active fund managers in return for using their cheaper index equivalents.

According to Morningstar, investors in the US withdrew $USD204 million from actively managed investments (net) in the 2019 calendar year. However, low cost index funds continued to grow in popularity receiving (net) $USD162 million of new money. The transition away from active management into low-cost index funds has been happening for over a decade.

Whilst it is true that traditional market cap indexing has outperformed many professional managers over long periods of time, it does have its shortcomings, particularly in markets other than bull markets.

It is my thesis that investors would be well advised to employ a selection of fundamentally sound indexing methodologies. Doing so can reduce a portfolios risk and potentially expose it to higher future returns.

What are the recent stats of index versus active?
Index funds are popular for good reasons. As I have written about previously, index funds typically produce better returns over the long run and charge much lower fees.

For example, only 16% of active fund managers have produced better returns than the index over the past 15 years in Australia (and only 11% in the US). However, it is important to note that the same fund managers have beaten the market each and every year. In fact, active fund managers may only outperform for one or two years. Statistics show that their outperformance almost never persists for longer periods of time.

According to data published by S&P Dow Jones, 81 Australian fund managers where in the top quartile in terms of performance for the 2015 year. Only 11 out of 81 remained in the top quartile a year later i.e. 2016 calendar year. And only 5 out of 81 were able to string three good years together (i.e. were in top quartile in terms of performance for 2015, 2016 and 2017). It is clear that ‘picking’ an active manager that will outperform is a very difficult thing to do, as it is likely you will need to chop and change fund managers every 1-2 years.

Three types of index methodologies
Indexing strategies typically fall into three categories:
1. Traditional market cap indexing – this is the type that you are probably most familiar with and has been popularised by Vanguard since the mid-1970’s. Market cap indexing spreads your investment across an index proportionately according to a company’s value (compared to the index’s aggregate value). For example, if you invest in the ASX200, 8.2% of your money will be invested in CSL, 7.6% in CBA and so forth.
2. Factor-based indexing – factor-based index methodologies uses measures other than a company’s market value (which is linked to its share price) as a means of diversifying your investment. These methodologies seek to break the link with price. The thesis is that price does not always accurately reflect a company’s risk and future returns. Examples of these mythologies include fundamental indexing and Dimensional.
3. Equal weight indexing – This is probably the most unsophisticated indexing approach. It invests an equal amount of your money in all companies that are included in an index. For example, if you invest in the ASX 200 index, then one

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Over the past decade, investors and large institutions have been deserting expensive active fund managers in return for using their cheaper index equivalents.

According to Morningstar, investors in the US withdrew $USD204 million from actively managed investments (net) in the 2019 calendar year. However, low cost index funds continued to grow in popularity receiving (net) $USD162 million of new money. The transition away from active management into low-cost index funds has been happening for over a decade.

Whilst it is true that traditional market cap indexing has outperformed many professional managers over long periods of time, it does have its shortcomings, particularly in markets other than bull markets.

It is my thesis that investors would be well advised to employ a selection of fundamentally sound indexing methodologies. Doing so can reduce a portfolios risk and potentially expose it to higher future returns.

What are the recent stats of index versus active?
Index funds are popular for good reasons. As I have written about previously, index funds typically produce better returns over the long run and charge much lower fees.

For example, only 16% of active fund managers have produced better returns than the index over the past 15 years in Australia (and only 11% in the US). However, it is important to note that the same fund managers have beaten the market each and every year. In fact, active fund managers may only outperform for one or two years. Statistics show that their outperformance almost never persists for longer periods of time.

According to data published by S&P Dow Jones, 81 Australian fund managers where in the top quartile in terms of performance for the 2015 year. Only 11 out of 81 remained in the top quartile a year later i.e. 2016 calendar year. And only 5 out of 81 were able to string three good years together (i.e. were in top quartile in terms of performance for 2015, 2016 and 2017). It is clear that ‘picking’ an active manager that will outperform is a very difficult thing to do, as it is likely you will need to chop and change fund managers every 1-2 years.

Three types of index methodologies
Indexing strategies typically fall into three categories:
1. Traditional market cap indexing – this is the type that you are probably most familiar with and has been popularised by Vanguard since the mid-1970’s. Market cap indexing spreads your investment across an index proportionately according to a company’s value (compared to the index’s aggregate value). For example, if you invest in the ASX200, 8.2% of your money will be invested in CSL, 7.6% in CBA and so forth.
2. Factor-based indexing – factor-based index methodologies uses measures other than a company’s market value (which is linked to its share price) as a means of diversifying your investment. These methodologies seek to break the link with price. The thesis is that price does not always accurately reflect a company’s risk and future returns. Examples of these mythologies include fundamental indexing and Dimensional.
3. Equal weight indexing – This is probably the most unsophisticated indexing approach. It invests an equal amount of your money in all companies that are included in an index. For example, if you invest in the ASX 200 index, then one

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 8cb58610-7830-4a8d-8b81-25e16cec130f Wed, 24 Jun 2020 11:44:00 +1000 1447 investopoly,wemyss,rules of the lending game,index,passive fund,equal weight,fundamental indexing 1 118 false How low interest rates can help build your super How low interest rates can help build your super If you have a couple of thousand dollars surplus cash each month, what is the most effective way to invest it?

You could invest in the share market, repay your mortgage(s) or invest in property.

But there’s another strategy that might be particularly more attractive, especially since mortgage interest rates are ridiculously low at the moment.

You may not want to repay debt or invest in shares or property
It certainly doesn’t cost a lot of cash flow to borrow to invest in a residential property at the moment. However, it is difficult to buy an investment-grade property for less than $600,000, which means you need to borrow a relatively large amount of money. If you already own some direct property, you may not feel comfortable borrowing this amount of money.

Repaying debt at the moment might only save you 3% p.a. in interest costs, which isn’t terrible, but it’s hardly a big return on your investment.

And of course, you could invest your cash flow in shares in your personal name or family trust. But if you are relatively close to retirement (within 10-15 years), investing inside super could be a lot more tax effective.

So, what about borrowing to fund additional contribute into super?

First, let me clarify how you can contribute money into super.

What is a non-concessional contribution?
There are two types of super contributions being ‘concessional’ and ‘non-concessional’.

Concessional contributions are more commonly utilised because these contributions are made pre-tax i.e. you receive an income tax deduction for them. You can make concessional contributions via salary sacrifice or by making a personal contribution into your super account. These contributions are taxed inside super at a flat rate of 15%.

Non-concessional contributions are after-tax contributions i.e. they do not affect your income tax position (no tax deduction). As such, they do not attract any superannuation taxes either (no contribution tax).

If your super balance is less than $1.4 million at the beginning of the financial year, you can make non-concessional contributions of up to $100,000 per year. Alternatively, you can bring forward 3 years of contributions into one i.e. contribute $300,000 in one year and nil for the following 2 years.

This page on the ATO’s website provides more information.

Borrowing to make non-concessional contributions isn’t normally a good idea
If you borrow to make a non-concessional contribution into super, the interest in respect to the loan is not tax deductible. This makes it an expensive strategy when interest rates are higher than they are today, and therefore rarely worthwhile.

However, with interest rates so low today, I thought I would consider whether borrowing to make non-concessional contributions is an attractive strategy.

My financial analysis
Assuming an investor has a surplus cash flow of $2,000 per month, they could borrow $200,000 today and contribute the full amount into super (i.e. make a non-concessional contribution). They could then direct their monthly surplus cash flow of $2,000 towards repaying this loan. The loan would be fully repaid within 10 years.

As noted above, interest charged in respect to this loan will not be tax deductible.

I have assumed the investor fixes their interest rate for 5 years at 3% p.a. After the 5-

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> If you have a couple of thousand dollars surplus cash each month, what is the most effective way to invest it?

You could invest in the share market, repay your mortgage(s) or invest in property.

But there’s another strategy that might be particularly more attractive, especially since mortgage interest rates are ridiculously low at the moment.

You may not want to repay debt or invest in shares or property
It certainly doesn’t cost a lot of cash flow to borrow to invest in a residential property at the moment. However, it is difficult to buy an investment-grade property for less than $600,000, which means you need to borrow a relatively large amount of money. If you already own some direct property, you may not feel comfortable borrowing this amount of money.

Repaying debt at the moment might only save you 3% p.a. in interest costs, which isn’t terrible, but it’s hardly a big return on your investment.

And of course, you could invest your cash flow in shares in your personal name or family trust. But if you are relatively close to retirement (within 10-15 years), investing inside super could be a lot more tax effective.

So, what about borrowing to fund additional contribute into super?

First, let me clarify how you can contribute money into super.

What is a non-concessional contribution?
There are two types of super contributions being ‘concessional’ and ‘non-concessional’.

Concessional contributions are more commonly utilised because these contributions are made pre-tax i.e. you receive an income tax deduction for them. You can make concessional contributions via salary sacrifice or by making a personal contribution into your super account. These contributions are taxed inside super at a flat rate of 15%.

Non-concessional contributions are after-tax contributions i.e. they do not affect your income tax position (no tax deduction). As such, they do not attract any superannuation taxes either (no contribution tax).

If your super balance is less than $1.4 million at the beginning of the financial year, you can make non-concessional contributions of up to $100,000 per year. Alternatively, you can bring forward 3 years of contributions into one i.e. contribute $300,000 in one year and nil for the following 2 years.

This page on the ATO’s website provides more information.

Borrowing to make non-concessional contributions isn’t normally a good idea
If you borrow to make a non-concessional contribution into super, the interest in respect to the loan is not tax deductible. This makes it an expensive strategy when interest rates are higher than they are today, and therefore rarely worthwhile.

However, with interest rates so low today, I thought I would consider whether borrowing to make non-concessional contributions is an attractive strategy.

My financial analysis
Assuming an investor has a surplus cash flow of $2,000 per month, they could borrow $200,000 today and contribute the full amount into super (i.e. make a non-concessional contribution). They could then direct their monthly surplus cash flow of $2,000 towards repaying this loan. The loan would be fully repaid within 10 years.

As noted above, interest charged in respect to this loan will not be tax deductible.

I have assumed the investor fixes their interest rate for 5 years at 3% p.a. After the 5-

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 5595ce60-c3fd-442e-af95-284491536874 Wed, 17 Jun 2020 09:00:00 +1000 1080 investopoly,rules of the lending game,super contributions,independent advice,non-concessional contributions,super,superannuation,wemyss,build wealth 1 117 false Tax planning ideas for 2020 Tax planning ideas for 2020 With the financial year coming to a close, I thought it was timely to share some of the common strategies we consider when helping clients minimise their taxation liabilities.

Of course, none of the information below should be considered personal taxation advice. I don’t know your circumstances and everyone’s situation is different. Therefore, please don’t act solely on the information contained in this blog. It is best to check with an experienced and appropriately licensed professional.

New work from home deductions
To accommodate the fact that the majority of people have been working from home during the Covid shutdown period, the ATO has provided a shortcut method for these related deductions. In simple terms, employees are able to claim a tax deduction equal to 80 cents for each hour they have worked from home between 1 March and 30 June 2020.

If more than one person has been working from home in your family, each person is entitled to the shortcut deduction.

If you use the shortcut method, you are not able to claim any additional work from home expenses.

If you do not use this shortcut method, please refer to this blog which it sets out an alternate method for calculating deductions.

When to make additional personal super contributions
Anyone that is 65 years or younger is able to contribute up to $25,000 into super and claim a personal income tax deduction. Included in this concessional contribution cap is any contributions made by your employer on your behalf. This is referred to as Superannuation Guarantee Charge or SGC i.e. the mandatory 9.5% p.a.

If you earn less than $250,000 per year, all contributions are taxed at a flat rate of 15%. This means you pay less tax overall. If you are on the top marginal tax rate, contributing into super saves 35% (47% versus 15%).

However, if you earn over $250,000 per year, contributions are taxed at a flat 30%. This is called Division 293 tax. In this situation, you are still able to reduce your tax by making super contributions, just to a lesser extent.

Finally, if your taxable income is expected to materially exceed $90,000 this financial year and you have sufficient savings, then making an additional contribution into super may be tax effective. The marginal tax rate on income between $90,001 and $180,000 is 39% so contributing into super saves you 24%.

If you expect that your taxable income is unusually high this year
If you anticipate that your taxable income this financial year is likely to be higher than next financial year (e.g. due to receiving a bonus or crystallising a capital gain), then you might consider whether you are able to use the carry-forward rule.

The carry-forward rule allows you to access any unutilised concessional caps in previous financial years. This rule commenced on 1 July 2018. Therefore, if you did not fully utilise the $25,000 concessional cap last financial year (i.e. 2018/19), and your super balance was less than $500,000 as at 1 July 2019, then you can access the unused portion of the cap this financial year.

If you have a Self Managed Super Fund, you may also be able to contribute an additional year’s worth of contributions this year too. This is called ‘contribution reservi

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> With the financial year coming to a close, I thought it was timely to share some of the common strategies we consider when helping clients minimise their taxation liabilities.

Of course, none of the information below should be considered personal taxation advice. I don’t know your circumstances and everyone’s situation is different. Therefore, please don’t act solely on the information contained in this blog. It is best to check with an experienced and appropriately licensed professional.

New work from home deductions
To accommodate the fact that the majority of people have been working from home during the Covid shutdown period, the ATO has provided a shortcut method for these related deductions. In simple terms, employees are able to claim a tax deduction equal to 80 cents for each hour they have worked from home between 1 March and 30 June 2020.

If more than one person has been working from home in your family, each person is entitled to the shortcut deduction.

If you use the shortcut method, you are not able to claim any additional work from home expenses.

If you do not use this shortcut method, please refer to this blog which it sets out an alternate method for calculating deductions.

When to make additional personal super contributions
Anyone that is 65 years or younger is able to contribute up to $25,000 into super and claim a personal income tax deduction. Included in this concessional contribution cap is any contributions made by your employer on your behalf. This is referred to as Superannuation Guarantee Charge or SGC i.e. the mandatory 9.5% p.a.

If you earn less than $250,000 per year, all contributions are taxed at a flat rate of 15%. This means you pay less tax overall. If you are on the top marginal tax rate, contributing into super saves 35% (47% versus 15%).

However, if you earn over $250,000 per year, contributions are taxed at a flat 30%. This is called Division 293 tax. In this situation, you are still able to reduce your tax by making super contributions, just to a lesser extent.

Finally, if your taxable income is expected to materially exceed $90,000 this financial year and you have sufficient savings, then making an additional contribution into super may be tax effective. The marginal tax rate on income between $90,001 and $180,000 is 39% so contributing into super saves you 24%.

If you expect that your taxable income is unusually high this year
If you anticipate that your taxable income this financial year is likely to be higher than next financial year (e.g. due to receiving a bonus or crystallising a capital gain), then you might consider whether you are able to use the carry-forward rule.

The carry-forward rule allows you to access any unutilised concessional caps in previous financial years. This rule commenced on 1 July 2018. Therefore, if you did not fully utilise the $25,000 concessional cap last financial year (i.e. 2018/19), and your super balance was less than $500,000 as at 1 July 2019, then you can access the unused portion of the cap this financial year.

If you have a Self Managed Super Fund, you may also be able to contribute an additional year’s worth of contributions this year too. This is called ‘contribution reservi

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

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Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss b1a6682f-c276-4f60-89c6-bab5ec228379 Wed, 10 Jun 2020 14:29:00 +1000 893 rules of the lending game,investopoly,save tax,wemyss,prosolution,tax,superannuation,super contributions,CGT 1 116 false What is quantitative easing, and should we be concerned? What is quantitative easing, and should we be concerned? Global ratings agency, Fitch estimates that the value of Quantitative Easing (QE) implemented this year could reach $9 trillion! To put that in context, that is equal to more than half the cumulative total global QE that occurred between 2009 and 2018! The Federal Reserve in the US has alone pumped $4 trillion into the market over the past 11 weeks. This is absolutely unprecedented.

Should investors be worried about the long-term impact of all this money printing (QE)? What are the risks that we need to be aware of?

The role of central banks
Central banks around the world are in charge of monetary policy. The aim of monetary policy is to ensure a healthy economy and an inflation rate that is within the stated goal.

When the economic activity increases and the economy approaches fully capacity, inflation can begin to increase. In this situation, the central bank would normally increase interest rates (to reduce corporate profits and consumer spending) to cool economic demand. If the economy slows down, the central bank can cut rates to stimulate demand again.

Interest rates is a central bank’s primary tool.

But what can a central bank do when rates are at or close to zero? Of course, they can contemplate negative interest rates (e.g. in Germany, banks are paying borrowers to take out loans), but that is largely ineffective.

What is QE?

When interest rates stop being an effective monetary policy tool, central banks start to consider more unconventional mechanisms such as QE. QE is the process of a central bank buying assets such as bonds. They do that by issuing new currency i.e. increasing money supply (often referred to as money printing). The aim is to stimulate the economy as a whole through injecting more money into the economy.

The US Federal Reserve started buying Mortgage Backed Securities (MBS) in 2009 to help the US recover from the impact of the GFC. The idea is that lenders could sell MBS to the Fed Reserve to raise funds. In doing so, banks would then have more funds to lend to property investors and homeowners. In turn this should stimulate demand for housing and aid in the property market’s recovery. To a large degree, it worked.

QE is not limited to MBS, however. Central banks can buy other assets including corporate bonds and even equities, which Bank of Japan has done. Central banks can target certain sectors of the economy if they so choose.

What has happened this year?
Most central banks around the globe have participated in QE, including Australia’s RBA, the US Fed Reserve, Bank of England, European Central Bank and Bank of Japan. For the most part, the QE programs have been much wider than what they were during the GFC. Central banks have been buying corporate bonds (the aim is to increase lending to the SME sector) and Exchange Traded Funds (some of which invest in non-investment-grade corporate bonds, which is seen as aggressive).

As noted in my opening paragraph, Fitch estimates that the total value of global QE in 2020 to be circa $9 trillion (AUD)!

The RBA has been providing money to Australian banks at a fixed rate of 0.25% for 3 years to promote lending to home owners and businesses. That is why fixed rates have been so attractive lately.

What impact will QE have on our investments?
A study conducted by Wharton Business

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Global ratings agency, Fitch estimates that the value of Quantitative Easing (QE) implemented this year could reach $9 trillion! To put that in context, that is equal to more than half the cumulative total global QE that occurred between 2009 and 2018! The Federal Reserve in the US has alone pumped $4 trillion into the market over the past 11 weeks. This is absolutely unprecedented.

Should investors be worried about the long-term impact of all this money printing (QE)? What are the risks that we need to be aware of?

The role of central banks
Central banks around the world are in charge of monetary policy. The aim of monetary policy is to ensure a healthy economy and an inflation rate that is within the stated goal.

When the economic activity increases and the economy approaches fully capacity, inflation can begin to increase. In this situation, the central bank would normally increase interest rates (to reduce corporate profits and consumer spending) to cool economic demand. If the economy slows down, the central bank can cut rates to stimulate demand again.

Interest rates is a central bank’s primary tool.

But what can a central bank do when rates are at or close to zero? Of course, they can contemplate negative interest rates (e.g. in Germany, banks are paying borrowers to take out loans), but that is largely ineffective.

What is QE?

When interest rates stop being an effective monetary policy tool, central banks start to consider more unconventional mechanisms such as QE. QE is the process of a central bank buying assets such as bonds. They do that by issuing new currency i.e. increasing money supply (often referred to as money printing). The aim is to stimulate the economy as a whole through injecting more money into the economy.

The US Federal Reserve started buying Mortgage Backed Securities (MBS) in 2009 to help the US recover from the impact of the GFC. The idea is that lenders could sell MBS to the Fed Reserve to raise funds. In doing so, banks would then have more funds to lend to property investors and homeowners. In turn this should stimulate demand for housing and aid in the property market’s recovery. To a large degree, it worked.

QE is not limited to MBS, however. Central banks can buy other assets including corporate bonds and even equities, which Bank of Japan has done. Central banks can target certain sectors of the economy if they so choose.

What has happened this year?
Most central banks around the globe have participated in QE, including Australia’s RBA, the US Fed Reserve, Bank of England, European Central Bank and Bank of Japan. For the most part, the QE programs have been much wider than what they were during the GFC. Central banks have been buying corporate bonds (the aim is to increase lending to the SME sector) and Exchange Traded Funds (some of which invest in non-investment-grade corporate bonds, which is seen as aggressive).

As noted in my opening paragraph, Fitch estimates that the total value of global QE in 2020 to be circa $9 trillion (AUD)!

The RBA has been providing money to Australian banks at a fixed rate of 0.25% for 3 years to promote lending to home owners and businesses. That is why fixed rates have been so attractive lately.

What impact will QE have on our investments?
A study conducted by Wharton Business

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 9910eb77-640f-433c-8d4f-4722cb056de1 Wed, 03 Jun 2020 09:57:00 +1000 1132 investopoly,rules of the lending game,wemyss,prosolution private clients,quantitative easing,Fed Reserve,RBA,interest rates,monetary policy,independent financial advice 1 115 false Why I think the property market and economy will be okay Why I think the property market and economy will be okay There have been a number of economists and commentators who have predicted that property values will fall anywhere between 10% and 32% this year. It seems like it’s almost become a competition for who can be the most bearish.

However, my view is a lot less bearish. I believe property values won’t fall by more than 10% and it’s quite possible that they might not fall at all.

You could be excused for thinking that I’m an unrealistic property optimist, but I promise that is not the case. Of course, all assets can fall in value and I have written about the four key drivers to watch out before here.

What is needed for property prices to fall by more than 10%
The predictions of property value declines are usually premised on the assumption that there will be more sellers than buyers. And perhaps some of those sellers are financially distressed, need to sell quickly and as such will drop their price to secure the sale. The occurrence of forced selling tends to weigh on property sentiment and the negative spiral begins.

However, the fact is that people will fight hard to avoid having to sell their home. It is their ‘castle’ and it’s that last thing they want to do. At the moment, banks are allowing borrowers to pause their repayments for up to six months. This avoids the need to sell a property of you are in financial strife. However, these repayment pauses will expire around September. This is also when JobKeeper payments are expected to cease and many people are worried about the impact.

What happens after September?
Firstly, we have to remind ourselves that most people haven’t been materially adversely impacted by the Covid shutdown. Our research (survey size of 451 people from various employment arrangements and ages) suggests that two thirds of people have experienced an income reduction of less than 15% - many haven’t been impacted at all.

W
Of the people that have been impacted by Covid-19, almost two thirds of them expect to recover their income back to pre-Covid levels within the next 12 months.

h
Some people will need more support
Notably, 8% of respondents said that they were not confident that they could successfully service their loan repayments after September 2020. It is this group of people that may need additional support from the government and banking sector.

y

If a borrower is unable to resume making normal loan repayments the bank will have to assess how long it may take the borrower to recover their income. If the bank believes it will take less than say a year, then I expect it would be very willing to agree to alternative repayment terms, which may include a second (full or partial) repayment pause period. In fact, the banks might formulate policies targeting specifically industries e.g. additional support for people that work in hospitality and tourism.

Westpac recently announced last week that it will allow borrowers impacted by Covid to switch from principal and interest repayments to interest only repayments for up to 12 months – avoiding the normal credit approval processes. I expect other banks will follow suit.

Banks will only force a borrower to sell their property if they believe it’s the only way it can get its money back. Foreclosing is usually a banks last resort, particularly in a post Royal Commission environment.

And it is very likely that there will be more targeted stimulus
The gover

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> There have been a number of economists and commentators who have predicted that property values will fall anywhere between 10% and 32% this year. It seems like it’s almost become a competition for who can be the most bearish.

However, my view is a lot less bearish. I believe property values won’t fall by more than 10% and it’s quite possible that they might not fall at all.

You could be excused for thinking that I’m an unrealistic property optimist, but I promise that is not the case. Of course, all assets can fall in value and I have written about the four key drivers to watch out before here.

What is needed for property prices to fall by more than 10%
The predictions of property value declines are usually premised on the assumption that there will be more sellers than buyers. And perhaps some of those sellers are financially distressed, need to sell quickly and as such will drop their price to secure the sale. The occurrence of forced selling tends to weigh on property sentiment and the negative spiral begins.

However, the fact is that people will fight hard to avoid having to sell their home. It is their ‘castle’ and it’s that last thing they want to do. At the moment, banks are allowing borrowers to pause their repayments for up to six months. This avoids the need to sell a property of you are in financial strife. However, these repayment pauses will expire around September. This is also when JobKeeper payments are expected to cease and many people are worried about the impact.

What happens after September?
Firstly, we have to remind ourselves that most people haven’t been materially adversely impacted by the Covid shutdown. Our research (survey size of 451 people from various employment arrangements and ages) suggests that two thirds of people have experienced an income reduction of less than 15% - many haven’t been impacted at all.

W
Of the people that have been impacted by Covid-19, almost two thirds of them expect to recover their income back to pre-Covid levels within the next 12 months.

h
Some people will need more support
Notably, 8% of respondents said that they were not confident that they could successfully service their loan repayments after September 2020. It is this group of people that may need additional support from the government and banking sector.

y

If a borrower is unable to resume making normal loan repayments the bank will have to assess how long it may take the borrower to recover their income. If the bank believes it will take less than say a year, then I expect it would be very willing to agree to alternative repayment terms, which may include a second (full or partial) repayment pause period. In fact, the banks might formulate policies targeting specifically industries e.g. additional support for people that work in hospitality and tourism.

Westpac recently announced last week that it will allow borrowers impacted by Covid to switch from principal and interest repayments to interest only repayments for up to 12 months – avoiding the normal credit approval processes. I expect other banks will follow suit.

Banks will only force a borrower to sell their property if they believe it’s the only way it can get its money back. Foreclosing is usually a banks last resort, particularly in a post Royal Commission environment.

And it is very likely that there will be more targeted stimulus
The gover

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss c36e4f16-8c20-46dc-8ed4-5dc4c03d7008 Tue, 26 May 2020 09:00:00 +1000 1250 rules of the lending game,investopoly,wemyss,property investing,property,investment propertyt,financial advice,covid-19 1 114 false Will 'working from home' change how we invest in property? Will 'working from home' change how we invest in property? If many employees continue to work from home, then perhaps demand for property in close proximity to capital city CBD’s will fall. And conversely, perhaps demand for property in regional centres that are well serviced by pubic transport (trains) will increase. This encourages us to consider whether the work-from-home movement will change the way we invest in property.

Covid forced us to work from home
Most employees have been required to work from home over the past few months due to the COVID shutdown. Of course, for most businesses, mobilising their entire workforce at short notice created a number of teething issues. But most businesses have adjusted to the ‘new normal’. They have resolved most operational issues and staff, in the main, are enjoying the flexibility that working from home provides.

Of course, this is not true for all businesses and employees. Working from home suits some roles, employees and industries better than others.

Some of the benefits of working from home include improved productivity due to fewer distractions. The elimination of travel time means employees can spend more time with family and/or complete more work. Therefore, it seems to provide benefits for both the employer and the employee.

In fact, Twitter is the first global businesses to confirm it will now allow employees to work from home permanently. Senior public service leaders in Canberra and many states and territories around Australia are also contemplating more permanent work-from-home policies too.

But it has its downsides
Of course, it’s not all positive. There are some downsides to working from home. These include not having a suitable workspace and limited face-to-face contact with clients and co-workers.

Research conducted by Dutch social psychologist, Geert Hofstede highlighted that human connection and relationships in the workplace are big contributors to job satisfaction. We have all come across people that dislike their job/employer but stay because they enjoy the people they work with. The reverse is also true i.e. people have left a role because they disliked the people, they worked with even though they make have loved the job.

Impact on demand resulting from working from home
Of course, if more employees work from home permanently – either on a full-time or part-time basis, demand for office space will fall, which will likely have negative consequences for commercial real estate. But what about the residential property market?

If people choose to work from home, then they no longer have to commute to their workplace. This gives them more options in terms of where to buy a home. For example, a greater share of the population may be more attracted to regional cities and towns, particularly as housing is more affordable in these locations. If that is the case, demand for housing in capital cities might fall, creating downward pressure on prices.

There are many important factors that determine where we want to live
It is important to remind ourselves that our choice of where to live is influenced by many factors, and proximity to one’s workplace is only one of those factors.

Perhaps the most compelling consideration for families with children is education. Living in a regional town might otherwise be attractive but if that means kids have a 1.5 hour each-way commute to school, it’s probably not going to work.

Proximity to family is also a persuasive factor when determining your home’s location. This is particularly the case if you need to look after your unwell parent

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> If many employees continue to work from home, then perhaps demand for property in close proximity to capital city CBD’s will fall. And conversely, perhaps demand for property in regional centres that are well serviced by pubic transport (trains) will increase. This encourages us to consider whether the work-from-home movement will change the way we invest in property.

Covid forced us to work from home
Most employees have been required to work from home over the past few months due to the COVID shutdown. Of course, for most businesses, mobilising their entire workforce at short notice created a number of teething issues. But most businesses have adjusted to the ‘new normal’. They have resolved most operational issues and staff, in the main, are enjoying the flexibility that working from home provides.

Of course, this is not true for all businesses and employees. Working from home suits some roles, employees and industries better than others.

Some of the benefits of working from home include improved productivity due to fewer distractions. The elimination of travel time means employees can spend more time with family and/or complete more work. Therefore, it seems to provide benefits for both the employer and the employee.

In fact, Twitter is the first global businesses to confirm it will now allow employees to work from home permanently. Senior public service leaders in Canberra and many states and territories around Australia are also contemplating more permanent work-from-home policies too.

But it has its downsides
Of course, it’s not all positive. There are some downsides to working from home. These include not having a suitable workspace and limited face-to-face contact with clients and co-workers.

Research conducted by Dutch social psychologist, Geert Hofstede highlighted that human connection and relationships in the workplace are big contributors to job satisfaction. We have all come across people that dislike their job/employer but stay because they enjoy the people they work with. The reverse is also true i.e. people have left a role because they disliked the people, they worked with even though they make have loved the job.

Impact on demand resulting from working from home
Of course, if more employees work from home permanently – either on a full-time or part-time basis, demand for office space will fall, which will likely have negative consequences for commercial real estate. But what about the residential property market?

If people choose to work from home, then they no longer have to commute to their workplace. This gives them more options in terms of where to buy a home. For example, a greater share of the population may be more attracted to regional cities and towns, particularly as housing is more affordable in these locations. If that is the case, demand for housing in capital cities might fall, creating downward pressure on prices.

There are many important factors that determine where we want to live
It is important to remind ourselves that our choice of where to live is influenced by many factors, and proximity to one’s workplace is only one of those factors.

Perhaps the most compelling consideration for families with children is education. Living in a regional town might otherwise be attractive but if that means kids have a 1.5 hour each-way commute to school, it’s probably not going to work.

Proximity to family is also a persuasive factor when determining your home’s location. This is particularly the case if you need to look after your unwell parent

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 08864061-6a35-485f-a496-0d81db925d6e Wed, 20 May 2020 09:54:00 +1000 925 investopoly,wemyss,rules of the lending game,property investing,working from home,WFH,work from home,investing,independent financial advice,financial advice, 1 113 false What happens (to rents and prices) when it's cheaper to own your home than rent it? What happens (to rents and prices) when it's cheaper to own your home than rent it? With interest rates at all-time lows, in some situations, it is now a lot cheaper to be an owner-occupier than a renter. And with the prospect of interest rates not rising anytime soon, it could stay that way for a few years, unless the market changes.

I thought it would be interesting to analyse the potential impact of this phenomenon. Obviously, there are some practical implications for people contemplating renting versus buying. But also, there will no doubt be broader consequences for the property market as a whole.

How much cheaper and for who?
Our analysis is summarised in the table below. Essentially, we compared the current value and rental cost of five property types and locations. The five scenarios were as follows:
1. Luxury, high-end, boutique apartment for $2.2 million;
2. Entry level 2-bedroom apartment that is considered investment-grade for $580,000;
3. Investment-grade, 2-bedroom house in a blue-chip suburb for $1.2 million;
4. A 3-bedroom family home in a desirable suburb for $2.5 million; and
5. A 3-bedroom home in an outer suburb for $660,000.


The interest cost was based on an interest rate of 2.2% p.a., which is the current 3 -year fixed rate for owner-occupier mortgages. It assumes that the owner has borrowed 100% of the purchase price plus stamp duty, which isn’t practical unless they have additional security to offer the bank. But we had to make this assumption to ensure it was a fair comparison, even though consequently it becomes more of an academic comparison than a practical one.

I’m sure you agree that it defies logic that it is less expensive to own your home than rent it. If this continued to be true, renting becomes far less attractive. As such, it is reasonable to assume that market forces will eventually conspire to reverse this i.e. make it more expensive to own. More on this later.

Comparing interest and rental is not the full picture
The above table compared the mortgage interest cost with the rental cost. However, as a homeowner, there might be additional cash flow implications associated with owning your home.

Firstly, there’s the cost of maintenance to consider. This will depend on the type and age of the of property. It’s important to distinguish between maintenance and improvements. It is often very tempting to make improvements to your home, but these tend to be discretionary in nature, and probably should be excluded from this analysis.

Secondly, there are also running costs that are exclusive to owners including owners’ corporation fees if you live in an apartment, council rates, water rates, insurance and so on.

Finally, if your loan repayments are structured as ‘principal and interest’, the dollar value of your monthly loan repayments will be higher than that interest costs included in the table above. This is not a sunk cost however, as it reduces your liability and helps you accumulate equity in your home. So, it should be excluded from a financial comparison, but taken into account from a cash flow affordability perspective.

Including owners’ costs
The table below includes an estimate of the above owning costs including maintenance, owners’ corporation fees, council rates, water rates, insurance and so on.


Tax free capital growth
Of course, one of the benefits of being a homeowner is

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> With interest rates at all-time lows, in some situations, it is now a lot cheaper to be an owner-occupier than a renter. And with the prospect of interest rates not rising anytime soon, it could stay that way for a few years, unless the market changes.

I thought it would be interesting to analyse the potential impact of this phenomenon. Obviously, there are some practical implications for people contemplating renting versus buying. But also, there will no doubt be broader consequences for the property market as a whole.

How much cheaper and for who?
Our analysis is summarised in the table below. Essentially, we compared the current value and rental cost of five property types and locations. The five scenarios were as follows:
1. Luxury, high-end, boutique apartment for $2.2 million;
2. Entry level 2-bedroom apartment that is considered investment-grade for $580,000;
3. Investment-grade, 2-bedroom house in a blue-chip suburb for $1.2 million;
4. A 3-bedroom family home in a desirable suburb for $2.5 million; and
5. A 3-bedroom home in an outer suburb for $660,000.


The interest cost was based on an interest rate of 2.2% p.a., which is the current 3 -year fixed rate for owner-occupier mortgages. It assumes that the owner has borrowed 100% of the purchase price plus stamp duty, which isn’t practical unless they have additional security to offer the bank. But we had to make this assumption to ensure it was a fair comparison, even though consequently it becomes more of an academic comparison than a practical one.

I’m sure you agree that it defies logic that it is less expensive to own your home than rent it. If this continued to be true, renting becomes far less attractive. As such, it is reasonable to assume that market forces will eventually conspire to reverse this i.e. make it more expensive to own. More on this later.

Comparing interest and rental is not the full picture
The above table compared the mortgage interest cost with the rental cost. However, as a homeowner, there might be additional cash flow implications associated with owning your home.

Firstly, there’s the cost of maintenance to consider. This will depend on the type and age of the of property. It’s important to distinguish between maintenance and improvements. It is often very tempting to make improvements to your home, but these tend to be discretionary in nature, and probably should be excluded from this analysis.

Secondly, there are also running costs that are exclusive to owners including owners’ corporation fees if you live in an apartment, council rates, water rates, insurance and so on.

Finally, if your loan repayments are structured as ‘principal and interest’, the dollar value of your monthly loan repayments will be higher than that interest costs included in the table above. This is not a sunk cost however, as it reduces your liability and helps you accumulate equity in your home. So, it should be excluded from a financial comparison, but taken into account from a cash flow affordability perspective.

Including owners’ costs
The table below includes an estimate of the above owning costs including maintenance, owners’ corporation fees, council rates, water rates, insurance and so on.


Tax free capital growth
Of course, one of the benefits of being a homeowner is

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

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Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 38cb8bab-db5a-441e-b168-4a9dc9eb218c Wed, 13 May 2020 10:50:00 +1000 993 investopoly,wemyss,rules of the lending game,property investing,property market,property growth,buy versus rent, 1 112 false Mastering cash flow management during the pandemic Mastering cash flow management during the pandemic Due to the impact of coronavirus, many people are having to navigate unexpected changes in income and expenses for the first time in their life. This is something I have been talking about over the past few weeks with clients, during presentations and podcast interviews.

Cash flow management is the cornerstone of successful wealth accumulation. It doesn’t matter how much you earn, if you don’t manage cash flow effectively, it’s unlikely that you will be successful with building wealth. I have seen clients with 7-figure incomes that have little wealth to show for it. Conversely, other people with relatively modest incomes but very good cash flow management practices, have successfully accumulated a lot of wealth.

Managing cash flow does not have to be painful
The topic of cash flow management feels painful to many people. It tends to create connotations of curtailing expenditure on all the fun things in life. However, in the main, that is not the case.

The main aim of best-practice cash flow management is to eliminate unconscious expenditure.

Conscious versus unconscious expenditure
Most people do not consciously make bad financial decisions. Therefore, the insidious consequence of not tracking cash flow means that money ‘disappears’ on items that add very little enjoyment to your life. As such, eliminating this unconscious expenditure not only saves you money, but is likely to have very little impact on your standard of living.

You cannot manage what you do not measure
The best way to eliminate unconscious expenditure is to measure how much you spend in total on all discretionary items. You do not need to track every single expense, just a monthly or fortnightly total.

I typically like to allocate expenses into seven categories.

Non-discretionary expenses
1. financial commitments, such as rent, mortgages, car leases and child support.
2. utilities, including costs for gas, electricity, rates, phone, water, internet and contents insurance.
3. health and education, such as school fees, health insurance, medical expenses and child care.

Discretionary expenses
4. shopping and transport, like food, clothing, beauty, petrol, car maintenance and public transport expenses.
5. entertainment, including spending on annual holidays, gifts, eating out, movies and coffees.
6. cash, which is all withdrawals from ATMs – if this figure is high, stop using cash and start using EFTPOS or credit cards more often, as this makes tracking your spending much easier. Remember, you can’t manage what you can’t measure.
7. other, which is anything that doesn’t fit in the preceding categories.

Use two separate bank accounts
Your salary income should be directed into one account, typically the (offset) account that is linked to your home loan. We will call this a ‘savings’ account. Pay all non-discretionary expenses from this account (categories 1 to 3 above).

Then transfer a set amount each week, fortnight or month into the ‘spending’ account and pay all expenses in categories 4 to 7 (above) from the ‘spending’ account. This is depicted in the diagram below (taken from my new book, Rule of the Lending Game).



The mere existence will save you money
In our experience, merely setting up this banking structure will almost certainly result in a fall in expenditure, probably without any negative lifestyle consequences. But most importantly, it will allow you to track your

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Due to the impact of coronavirus, many people are having to navigate unexpected changes in income and expenses for the first time in their life. This is something I have been talking about over the past few weeks with clients, during presentations and podcast interviews.

Cash flow management is the cornerstone of successful wealth accumulation. It doesn’t matter how much you earn, if you don’t manage cash flow effectively, it’s unlikely that you will be successful with building wealth. I have seen clients with 7-figure incomes that have little wealth to show for it. Conversely, other people with relatively modest incomes but very good cash flow management practices, have successfully accumulated a lot of wealth.

Managing cash flow does not have to be painful
The topic of cash flow management feels painful to many people. It tends to create connotations of curtailing expenditure on all the fun things in life. However, in the main, that is not the case.

The main aim of best-practice cash flow management is to eliminate unconscious expenditure.

Conscious versus unconscious expenditure
Most people do not consciously make bad financial decisions. Therefore, the insidious consequence of not tracking cash flow means that money ‘disappears’ on items that add very little enjoyment to your life. As such, eliminating this unconscious expenditure not only saves you money, but is likely to have very little impact on your standard of living.

You cannot manage what you do not measure
The best way to eliminate unconscious expenditure is to measure how much you spend in total on all discretionary items. You do not need to track every single expense, just a monthly or fortnightly total.

I typically like to allocate expenses into seven categories.

Non-discretionary expenses
1. financial commitments, such as rent, mortgages, car leases and child support.
2. utilities, including costs for gas, electricity, rates, phone, water, internet and contents insurance.
3. health and education, such as school fees, health insurance, medical expenses and child care.

Discretionary expenses
4. shopping and transport, like food, clothing, beauty, petrol, car maintenance and public transport expenses.
5. entertainment, including spending on annual holidays, gifts, eating out, movies and coffees.
6. cash, which is all withdrawals from ATMs – if this figure is high, stop using cash and start using EFTPOS or credit cards more often, as this makes tracking your spending much easier. Remember, you can’t manage what you can’t measure.
7. other, which is anything that doesn’t fit in the preceding categories.

Use two separate bank accounts
Your salary income should be directed into one account, typically the (offset) account that is linked to your home loan. We will call this a ‘savings’ account. Pay all non-discretionary expenses from this account (categories 1 to 3 above).

Then transfer a set amount each week, fortnight or month into the ‘spending’ account and pay all expenses in categories 4 to 7 (above) from the ‘spending’ account. This is depicted in the diagram below (taken from my new book, Rule of the Lending Game).



The mere existence will save you money
In our experience, merely setting up this banking structure will almost certainly result in a fall in expenditure, probably without any negative lifestyle consequences. But most importantly, it will allow you to track your

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 83d6731c-0fc3-4dd6-a795-ab15a12524b0 Wed, 06 May 2020 09:06:00 +1000 922 investopoly,rule of the lending game,wemyss,cash flow,wealth,financial planning,independent advice,cash flow management,budgeting 1 111 false Which strategy? Upgrade your home or borrow to invest? Which strategy? Upgrade your home or borrow to invest? A few months ago, a reader of this blog asked me to analyse two options. Option one is to borrow more money to fund an upgrade of your family home and consequently enjoy tax-free capital gains. The second option is to invest in property. The reader wanted to know which is the best option, net of all taxes such as capital gains and land tax?

Widen the scope of the question
I’d like to widen the scope of this question and add one more option – investing in shares. I have concerns with investing large amounts of borrowed funds in the share market, which I will discuss below. However, as an independent financial advisory firm, it is important that we always provide a balanced view – even if some of the options we are comparing are more of an academic comparison, than a practical one.

Interest rate assumption
One of the key assumptions in my financial modelling is interest rates. Normally, I like to adopt a conservative long-term interest rate assumption of 6.5% p.a. However, I realise that this might be less appropriate when interest rates around the world are making their way to zero (or are already there) and central banks are pursuing quantitively easing. It is very likely that interest rates will remain persistently low for an extended period of time. That said, it’s also not impossible that interest rates will rise sometime in the future too.

As such, in this analysis I have assumed that the variable interest rate is 3.7% for investment loans and 2.9% p.a. for home loans and will remain at this level for the next 3 years. I have then assumed rates will rise by 3% p.a. over the following decade (on a straight-line basis) and remain at that level.

What is most important is that I have used the exact same assumptions when comparing all options.

The quantitative analysis
I financially modelled three scenarios:
Option 1: Borrowing $1 million to fund a home upgrade from $1 million to $2 million. This allows you to move to a superior location thereby enjoying a superior capital growth rate.

Option 2: Borrow $1 million to invest in a property that generates gross income of 2% (rental yield before expenses) and capital growth of 7% p.a.

Option 3: Borrow $1 million and invest in shares which generate 4.0% p.a. in dividends (40% franked) and 5.0% p.a. in growth rate (so that the overall return is the same as the property option i.e. 9% p.a. – to ensure the comparison is fair).

As you will see from the chart below, option one is superior as it results in a higher net worth in today’s dollars. Options 2 and 3 are broadly similar.

A

It is interesting to observe that the higher expenses associated with property (e.g. maintenance, land tax, etc.) do not have a material impact. One might expect that the higher expenses associated with property investing compared to the higher income from share investing (particularly franking credits) would result in the shares option being superior. But the higher (compounding) capital growth from property more than offsets its lower income and higher expenses. The key here is investing in the right property i.e. investment-grade.

Home loan debt is less of a problem whilst rates are low
One of the problems with a strategy that gives rise to high amount of non-tax-deductible debt (i.e. home loan) is that it can be very experience. That’s because the interest is not tax deductible – so repayments are made from after tax dollars. In a high interest rate environment, this can absorb all cash flow thereby retarding your ability to make material loan

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> A few months ago, a reader of this blog asked me to analyse two options. Option one is to borrow more money to fund an upgrade of your family home and consequently enjoy tax-free capital gains. The second option is to invest in property. The reader wanted to know which is the best option, net of all taxes such as capital gains and land tax?

Widen the scope of the question
I’d like to widen the scope of this question and add one more option – investing in shares. I have concerns with investing large amounts of borrowed funds in the share market, which I will discuss below. However, as an independent financial advisory firm, it is important that we always provide a balanced view – even if some of the options we are comparing are more of an academic comparison, than a practical one.

Interest rate assumption
One of the key assumptions in my financial modelling is interest rates. Normally, I like to adopt a conservative long-term interest rate assumption of 6.5% p.a. However, I realise that this might be less appropriate when interest rates around the world are making their way to zero (or are already there) and central banks are pursuing quantitively easing. It is very likely that interest rates will remain persistently low for an extended period of time. That said, it’s also not impossible that interest rates will rise sometime in the future too.

As such, in this analysis I have assumed that the variable interest rate is 3.7% for investment loans and 2.9% p.a. for home loans and will remain at this level for the next 3 years. I have then assumed rates will rise by 3% p.a. over the following decade (on a straight-line basis) and remain at that level.

What is most important is that I have used the exact same assumptions when comparing all options.

The quantitative analysis
I financially modelled three scenarios:
Option 1: Borrowing $1 million to fund a home upgrade from $1 million to $2 million. This allows you to move to a superior location thereby enjoying a superior capital growth rate.

Option 2: Borrow $1 million to invest in a property that generates gross income of 2% (rental yield before expenses) and capital growth of 7% p.a.

Option 3: Borrow $1 million and invest in shares which generate 4.0% p.a. in dividends (40% franked) and 5.0% p.a. in growth rate (so that the overall return is the same as the property option i.e. 9% p.a. – to ensure the comparison is fair).

As you will see from the chart below, option one is superior as it results in a higher net worth in today’s dollars. Options 2 and 3 are broadly similar.

A

It is interesting to observe that the higher expenses associated with property (e.g. maintenance, land tax, etc.) do not have a material impact. One might expect that the higher expenses associated with property investing compared to the higher income from share investing (particularly franking credits) would result in the shares option being superior. But the higher (compounding) capital growth from property more than offsets its lower income and higher expenses. The key here is investing in the right property i.e. investment-grade.

Home loan debt is less of a problem whilst rates are low
One of the problems with a strategy that gives rise to high amount of non-tax-deductible debt (i.e. home loan) is that it can be very experience. That’s because the interest is not tax deductible – so repayments are made from after tax dollars. In a high interest rate environment, this can absorb all cash flow thereby retarding your ability to make material loan

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 0fcfadcc-5bc3-4015-abf6-c81e2092a2b1 Thu, 30 Apr 2020 09:00:00 +1000 1128 investopoly,wemyss,property investing,rules of the lending game,financial advice,investment property,home upgrade 1 110 false Will property prices fall by 10% because of higher unemployment thanks to COVID-19 Will property prices fall by 10% because of higher unemployment thanks to COVID-19 CBA Economics stated last week that property price declines are “inevitable”. It has forecast that prices will fall by circa 10% in Melbourne and Sydney over the next 6 months. It cited many reasons for this forecast including higher unemployment, lower economic activity, lower mortgage volumes, falling rents and fewer overseas buyers.

I wanted to take some time to look at this forecast and provide my commentary. This exercise serves as reminder that all forecasts are inherently uncertain and tend to have limited application for investment decisions.

Relationship with unemployment and property growth
Simple logic would suggest that if less people are employed, fewer people will be able to purchase a property and some may need to sell their properties. As such, if demand for property falls, prices may follow. That’s the basic laws of supply and demand.

However, the chart below doesn’t support this hypothesise. We should see the green line (average house price growth for subsequent 3-year period) increase when the blue line (unemployment) falls. That is not always the case. In fact, the data suggests there’s a very weak relationship between property growth and unemployment.

C

What happened during the last recession?
Let’s look at Australia’s last recession as an example (i.e. the “recession we had to have”). Between 1990 and 1992, unemployment rose from 5.85% to 11.2%. During this period, the subsequent rolling 3-year annual property growth ranged between 1.1% p.a. and 3.4% p.a. Inflation was circa 1.5% p.a. during this period, so in real terms, property prices were flat.

What happened was there was very strong price growth between 1985 and 1988 (i.e. over 20% p.a.) and property prices started falling from early 1989. Unemployment started to rise in early 1990. Therefore, property price falls actually proceeded a rise in unemployment, not the other way around.

Why might there be a weak link between unemployment and price growth?
I can’t offer a definitive answer, of course. But I think a large part of the answer lies in two factors being (1) the fact we all need somewhere to live and (2) the housing market is close to equilibrium in terms of demand and supply i.e. most Australian’s have somewhere to live.

For there to be large falls in prices, there needs to be more sellers than buyers i.e. mass selling. That can happen in the share market (and other asset classes) with limited practical consequences. However, that is more difficult to do with property, because we all need somewhere to live. Of course, investors and holiday homeowners have the discretion to sell, but in the main, these people tend to have a stronger financial position than the average Australian.

And the average unemployment period will likely be short
The important distinction that makes this situation unique is this current recession was caused by a contraction in supply, not a fall in demand. Normally, an economic slowdown is caused by a fall in consumer spending (demand for goods and services) and that can take longer to recover. Today, most consumers are happy to spend (a visit to Bunnings will prove that). It’s just we are not allowed to venture outside our homes to do so (and otherwise viable businesses have been forced to cease trading). Once restrictions have been lifted, demand will likely return at a faster rate compared to a demand-driven recession.

Westpac projects that unemployment will peak at 9% this year but reduce to 5.6% by the end of 2021 (i.e. only slightly above what it was at the beginning o

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> CBA Economics stated last week that property price declines are “inevitable”. It has forecast that prices will fall by circa 10% in Melbourne and Sydney over the next 6 months. It cited many reasons for this forecast including higher unemployment, lower economic activity, lower mortgage volumes, falling rents and fewer overseas buyers.

I wanted to take some time to look at this forecast and provide my commentary. This exercise serves as reminder that all forecasts are inherently uncertain and tend to have limited application for investment decisions.

Relationship with unemployment and property growth
Simple logic would suggest that if less people are employed, fewer people will be able to purchase a property and some may need to sell their properties. As such, if demand for property falls, prices may follow. That’s the basic laws of supply and demand.

However, the chart below doesn’t support this hypothesise. We should see the green line (average house price growth for subsequent 3-year period) increase when the blue line (unemployment) falls. That is not always the case. In fact, the data suggests there’s a very weak relationship between property growth and unemployment.

C

What happened during the last recession?
Let’s look at Australia’s last recession as an example (i.e. the “recession we had to have”). Between 1990 and 1992, unemployment rose from 5.85% to 11.2%. During this period, the subsequent rolling 3-year annual property growth ranged between 1.1% p.a. and 3.4% p.a. Inflation was circa 1.5% p.a. during this period, so in real terms, property prices were flat.

What happened was there was very strong price growth between 1985 and 1988 (i.e. over 20% p.a.) and property prices started falling from early 1989. Unemployment started to rise in early 1990. Therefore, property price falls actually proceeded a rise in unemployment, not the other way around.

Why might there be a weak link between unemployment and price growth?
I can’t offer a definitive answer, of course. But I think a large part of the answer lies in two factors being (1) the fact we all need somewhere to live and (2) the housing market is close to equilibrium in terms of demand and supply i.e. most Australian’s have somewhere to live.

For there to be large falls in prices, there needs to be more sellers than buyers i.e. mass selling. That can happen in the share market (and other asset classes) with limited practical consequences. However, that is more difficult to do with property, because we all need somewhere to live. Of course, investors and holiday homeowners have the discretion to sell, but in the main, these people tend to have a stronger financial position than the average Australian.

And the average unemployment period will likely be short
The important distinction that makes this situation unique is this current recession was caused by a contraction in supply, not a fall in demand. Normally, an economic slowdown is caused by a fall in consumer spending (demand for goods and services) and that can take longer to recover. Today, most consumers are happy to spend (a visit to Bunnings will prove that). It’s just we are not allowed to venture outside our homes to do so (and otherwise viable businesses have been forced to cease trading). Once restrictions have been lifted, demand will likely return at a faster rate compared to a demand-driven recession.

Westpac projects that unemployment will peak at 9% this year but reduce to 5.6% by the end of 2021 (i.e. only slightly above what it was at the beginning o

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss eabfb487-9ba4-475a-bfdd-899432d8e262 Thu, 23 Apr 2020 08:00:00 +1000 1216 investopoly,rules of the lending game,covid-19,property growth,investment property,unemployment,investment strategy 1 109 false How to make financial decisions in times of high uncertainty How to make financial decisions in times of high uncertainty If there is one certainty in life, it’s that there’s always going to be some uncertainty.

Of course, there are times in our lives where there’s higher levels of uncertainty, which can be very stressful. But, to a degree, we all have to become comfortable with some level of ‘uncertainty’ and learn how to dance with it.

This is especially true with financial decisions. Markets never exhibit zero risk (i.e. no uncertainty). This blog considers how to financially navigate uncertain times, much like we are experiencing today.

Uncertainty can exist in three ways being (1) personal circumstances, (2) domestic uncertainty and (3) global uncertainty. Each is different and requires a different approach.

Personal uncertainty
Personal uncertainly relates to your personal financial position. This can include things such as the risk of a change in your income, losing your job, unexpected bills, relationships and so on.

How to deal with personal uncertainty
When it comes to personal uncertainty, the best thing is to put all material financial decision making on hold. Typically, the uncertainty resolves itself within a few months or possibly a year. That is, your fears are either realised, or the risk evaporates. Either way, it is likely that sometime in the near future you will be able to resume normal decision making (management).

Remember, investing and building wealth is a marathon, not a sprint. There’s no need to put yourself under any undue time pressure. Instead, you must make deliberate and well thought out decisions – there’s no need to rush. However, of course, at the same time, you must consciously avoid unnecessarily procrastinating too.

It is possible (although rare), that the passage of time does not in fact eliminate the uncertainty. An example of this is when one of my clients was facing the prospect of his employer cancelling his project (i.e. redundancy) for many years. In this situation, we just had to accept this higher risk and proceed with implementing his financial plan. We held larger than usual cash buffers to mitigate some of these risks. In the end, the redundancy did eventuate, but not for many years.

Domestic uncertainty
Domestic uncertainty relates to matters that are unique to Australia. These can include things such as changes to taxation rules or economic health. A recent example of domestic uncertainty arose during last year’s Federal election campaign where the Labor government proposed making changes to negative gearing and capital gain tax. Remember that? That was less than a year ago!

How to deal with domestic uncertainty
Tax and superannuation rules are everchanging. Economies move in cycles (although it has been almost 29 years since Australia’s last recession – although we have almost certainly broken that streak already). Most of these risks (or uncertainties) are cyclical and will continue to be present for the foreseeable future.

The best way to deal with domestic uncertainties is through your investment strategy formulation. For example, you must have sufficient diversification in regard to items such as investable asset classes and ownership structures so that you are not ‘single point sensitive’ to a change in tax law. You must ensure your property investments are of a sufficiently high quality, so they are able to absorb the impact of a tax hike and still remain viable.

Put differently, your investment strategy shouldn’t fail just because of a change in law or the end of an economic cycle. For long term investors, these events should not be unexcepted.

Another approach is to price the risk into the transaction you are contemplating

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> If there is one certainty in life, it’s that there’s always going to be some uncertainty.

Of course, there are times in our lives where there’s higher levels of uncertainty, which can be very stressful. But, to a degree, we all have to become comfortable with some level of ‘uncertainty’ and learn how to dance with it.

This is especially true with financial decisions. Markets never exhibit zero risk (i.e. no uncertainty). This blog considers how to financially navigate uncertain times, much like we are experiencing today.

Uncertainty can exist in three ways being (1) personal circumstances, (2) domestic uncertainty and (3) global uncertainty. Each is different and requires a different approach.

Personal uncertainty
Personal uncertainly relates to your personal financial position. This can include things such as the risk of a change in your income, losing your job, unexpected bills, relationships and so on.

How to deal with personal uncertainty
When it comes to personal uncertainty, the best thing is to put all material financial decision making on hold. Typically, the uncertainty resolves itself within a few months or possibly a year. That is, your fears are either realised, or the risk evaporates. Either way, it is likely that sometime in the near future you will be able to resume normal decision making (management).

Remember, investing and building wealth is a marathon, not a sprint. There’s no need to put yourself under any undue time pressure. Instead, you must make deliberate and well thought out decisions – there’s no need to rush. However, of course, at the same time, you must consciously avoid unnecessarily procrastinating too.

It is possible (although rare), that the passage of time does not in fact eliminate the uncertainty. An example of this is when one of my clients was facing the prospect of his employer cancelling his project (i.e. redundancy) for many years. In this situation, we just had to accept this higher risk and proceed with implementing his financial plan. We held larger than usual cash buffers to mitigate some of these risks. In the end, the redundancy did eventuate, but not for many years.

Domestic uncertainty
Domestic uncertainty relates to matters that are unique to Australia. These can include things such as changes to taxation rules or economic health. A recent example of domestic uncertainty arose during last year’s Federal election campaign where the Labor government proposed making changes to negative gearing and capital gain tax. Remember that? That was less than a year ago!

How to deal with domestic uncertainty
Tax and superannuation rules are everchanging. Economies move in cycles (although it has been almost 29 years since Australia’s last recession – although we have almost certainly broken that streak already). Most of these risks (or uncertainties) are cyclical and will continue to be present for the foreseeable future.

The best way to deal with domestic uncertainties is through your investment strategy formulation. For example, you must have sufficient diversification in regard to items such as investable asset classes and ownership structures so that you are not ‘single point sensitive’ to a change in tax law. You must ensure your property investments are of a sufficiently high quality, so they are able to absorb the impact of a tax hike and still remain viable.

Put differently, your investment strategy shouldn’t fail just because of a change in law or the end of an economic cycle. For long term investors, these events should not be unexcepted.

Another approach is to price the risk into the transaction you are contemplating

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 602c435e-0e5f-48a0-a0b7-fabb3342d45d Thu, 16 Apr 2020 08:00:00 +1000 1021 investopoly,rules of lending game,wemyss,uncertainty,financial advice 1 108 false Property and loan related FAQ Property and loan related FAQ We provide answers to a number of frequently asked questions below. We will continue to add new questions and update our answers as events and government announcements unfold.

Questions about pausing loan repayments

How does the loan repayment pause work?
Banks are offering customers the ability to pause residential loan repayments for up to 6 months if they have been impacted financially by coronavirus. I provided links to each lender’s relevant webpage at the bottom of this blog post.

It is important to note that banks are not offering an interest-free period. Interest in respect to your loan will continue to accrue and be added onto your loan balance.

For example, if your interest only loan is $100,000 and your interest rate is 3% p.a. then your monthly interest bill is $250. If you request the bank to pause repayments for 6 months then at the end of this period, your loan balance will be $101,500 (being the original balance plus 6 monthly payments of $250).

Most lenders have confirmed that they will not charge interest on the unpaid interest amount (e.g. the $250 per month) during the loan repayment pause period.

Should I pause my loan repayments?
If you are unable to continue to make your loan repayments on time due to financial hardship, then pausing your loan repayments is a good solution.

However, if you do have alternative means of making repayments e.g. from cash savings, redraw, etc. then my advice would be to utilise those other mechanisms first, before you pause your loan repayments.

Should I pause my repayments if I’m concerned about losing your job in the future?
No. If your income has not yet been impacted by the coronavirus then our advice would be to continue making normal loan repayments. If your financial situation is adversely impacted in the future, then you may consider pausing repayments at that time. We anticipate that lenders will allow borrowers to do this at any time over the next six months.

Will pausing repayments affect my credit rating?
No. The Australian Banking Association has confirmed that borrowers that take advantage of the repayment pause option will have any impact on their credit rating – see here.

Should I pause repayments on all loans?
If you have suffered financial hardship, our advice is typically to put investment loan repayments on pause first and attempt to continue to make normal repayments towards your (non-tax-deductible) home loan, if possible. However, if you are not in a position to continue making home loan repayments, then pausing all loans might be your only option.

Will the accumulated unpaid interest still be tax deductible?
If you put an investment loan’s repayments on pause, the interest will be added to the loan’s balance at the end of the pause period. Therefore, when normal repayments recommence, the bank will charge interest on this higher loan balance (so more interest will be payable). This should not have any adverse impact on your tax deductions. That is, all interest charged in respect to this investment loan will continue to be fully tax deductible.

Also, you will be able to claim a tax deduction for the interest incurred (and subsequently added to the loan’s balance) during the loan repayment pause period.

Can I reduce principal and interest (P&I) repayments to interest only?
Normally, changing repayments from P&I to in

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> We provide answers to a number of frequently asked questions below. We will continue to add new questions and update our answers as events and government announcements unfold.

Questions about pausing loan repayments

How does the loan repayment pause work?
Banks are offering customers the ability to pause residential loan repayments for up to 6 months if they have been impacted financially by coronavirus. I provided links to each lender’s relevant webpage at the bottom of this blog post.

It is important to note that banks are not offering an interest-free period. Interest in respect to your loan will continue to accrue and be added onto your loan balance.

For example, if your interest only loan is $100,000 and your interest rate is 3% p.a. then your monthly interest bill is $250. If you request the bank to pause repayments for 6 months then at the end of this period, your loan balance will be $101,500 (being the original balance plus 6 monthly payments of $250).

Most lenders have confirmed that they will not charge interest on the unpaid interest amount (e.g. the $250 per month) during the loan repayment pause period.

Should I pause my loan repayments?
If you are unable to continue to make your loan repayments on time due to financial hardship, then pausing your loan repayments is a good solution.

However, if you do have alternative means of making repayments e.g. from cash savings, redraw, etc. then my advice would be to utilise those other mechanisms first, before you pause your loan repayments.

Should I pause my repayments if I’m concerned about losing your job in the future?
No. If your income has not yet been impacted by the coronavirus then our advice would be to continue making normal loan repayments. If your financial situation is adversely impacted in the future, then you may consider pausing repayments at that time. We anticipate that lenders will allow borrowers to do this at any time over the next six months.

Will pausing repayments affect my credit rating?
No. The Australian Banking Association has confirmed that borrowers that take advantage of the repayment pause option will have any impact on their credit rating – see here.

Should I pause repayments on all loans?
If you have suffered financial hardship, our advice is typically to put investment loan repayments on pause first and attempt to continue to make normal repayments towards your (non-tax-deductible) home loan, if possible. However, if you are not in a position to continue making home loan repayments, then pausing all loans might be your only option.

Will the accumulated unpaid interest still be tax deductible?
If you put an investment loan’s repayments on pause, the interest will be added to the loan’s balance at the end of the pause period. Therefore, when normal repayments recommence, the bank will charge interest on this higher loan balance (so more interest will be payable). This should not have any adverse impact on your tax deductions. That is, all interest charged in respect to this investment loan will continue to be fully tax deductible.

Also, you will be able to claim a tax deduction for the interest incurred (and subsequently added to the loan’s balance) during the loan repayment pause period.

Can I reduce principal and interest (P&I) repayments to interest only?
Normally, changing repayments from P&I to in

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 28b5dbe2-93d2-43a3-9a40-ccf87003a3ff Thu, 09 Apr 2020 09:00:00 +1000 1091 investopoly,rules of the lending game,investment property,coronavirus,loan pause,mortgages, 1 107 false Working from home (home office) tax deductions Working from home (home office) tax deductions With most people being required by their employer to work from home, I thought it would be timely to update you on what deductions you can claim and what evidence you need as substantiation.

Start keeping record now
Remember, the onus of proof is on the taxpayer to substantiate any deductions they claim. If you use a tax agent, you probably won’t have to lodge this year’s income tax return until March 2021. How likely is it that you will remember everything you did and all the purchases you made in March 2020, one year from now? Unlikely right. Therefore, its best to start keeping records now.

Expenses you may be entitled to claim
Here’s a list of expenses you can typically claim.

Running costs
These expenses include heating, cooling, lighting, cleaning, and so on. There are two methods you can use to calculate this deduction:
1. Fixed rate - You can claim a deduction of 52 cents for each hour you work from home instead of recording all of your actual expenses for heating, cooling, lighting, cleaning and the decline in value of furniture. You can either keep a record of the number of hours you have worked from home during the coronavirus period. Or, if you regularly work from home, you can keep a diary for a representative 4 weeks; or
2. Actual costs – You can use this method if you have a dedicated workspace and you can accurately apportion costs such as power, heating, cleaning and depreciation. You still need to keep a 4-week diary or actual record of hours worked to support your calculations.

Obviously, for most people, the fixed rate option is the simplest. More information is available on the ATO’s website here.

Consumables
Items such as software subscriptions, stationery, paper for your printer and printer ink can be tax deductible. You must retain receipts as evidence.

Mobile phone & internet expenses
There are two methods available to use to determine your tax deduction for mobile phone usage:
1. A total deduction of $50 with limited documentation required. This method is appropriate when your device usage is incidental; or
2. Claim a proportion of actual expenses. To work out the actual work-related proportion, you need to consider the amount of usage solely for work compared to the overall usage. Usage could include functions such as voice calls, text messages, data and app usage. You need to keep a diary for a representative four-week period to support your claim.

Computer and office equipment
If the cost of the equipment is less than $300, then you can claim a full deduction in the financial year the purchase was made. If the equipment costs more than $300, you must depreciate the item over its useful life. Note, if any equipment purchased is partially used for private use purposes, you will need to apportion the depreciation for its work use percentage.

Expenses you may not be entitled to claim
Here is a list of expenses that you are not able to claim.

Rental expense or mortgage interest (occupancy expenses)
Generally, you cannot claim a deduction for interest cost or rent paid in respect to a home office. However, if dedicated portion of your home is your principal workplace, then you can claim a portion of occupancy expenses. Generally, you would apportion the work-related and non-work-related expenses by floor area.

Travel between home and work
Generally, you are not entitled to claim a deduction for the cost of travel between work and your home office e.g. if you n

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> With most people being required by their employer to work from home, I thought it would be timely to update you on what deductions you can claim and what evidence you need as substantiation.

Start keeping record now
Remember, the onus of proof is on the taxpayer to substantiate any deductions they claim. If you use a tax agent, you probably won’t have to lodge this year’s income tax return until March 2021. How likely is it that you will remember everything you did and all the purchases you made in March 2020, one year from now? Unlikely right. Therefore, its best to start keeping records now.

Expenses you may be entitled to claim
Here’s a list of expenses you can typically claim.

Running costs
These expenses include heating, cooling, lighting, cleaning, and so on. There are two methods you can use to calculate this deduction:
1. Fixed rate - You can claim a deduction of 52 cents for each hour you work from home instead of recording all of your actual expenses for heating, cooling, lighting, cleaning and the decline in value of furniture. You can either keep a record of the number of hours you have worked from home during the coronavirus period. Or, if you regularly work from home, you can keep a diary for a representative 4 weeks; or
2. Actual costs – You can use this method if you have a dedicated workspace and you can accurately apportion costs such as power, heating, cleaning and depreciation. You still need to keep a 4-week diary or actual record of hours worked to support your calculations.

Obviously, for most people, the fixed rate option is the simplest. More information is available on the ATO’s website here.

Consumables
Items such as software subscriptions, stationery, paper for your printer and printer ink can be tax deductible. You must retain receipts as evidence.

Mobile phone & internet expenses
There are two methods available to use to determine your tax deduction for mobile phone usage:
1. A total deduction of $50 with limited documentation required. This method is appropriate when your device usage is incidental; or
2. Claim a proportion of actual expenses. To work out the actual work-related proportion, you need to consider the amount of usage solely for work compared to the overall usage. Usage could include functions such as voice calls, text messages, data and app usage. You need to keep a diary for a representative four-week period to support your claim.

Computer and office equipment
If the cost of the equipment is less than $300, then you can claim a full deduction in the financial year the purchase was made. If the equipment costs more than $300, you must depreciate the item over its useful life. Note, if any equipment purchased is partially used for private use purposes, you will need to apportion the depreciation for its work use percentage.

Expenses you may not be entitled to claim
Here is a list of expenses that you are not able to claim.

Rental expense or mortgage interest (occupancy expenses)
Generally, you cannot claim a deduction for interest cost or rent paid in respect to a home office. However, if dedicated portion of your home is your principal workplace, then you can claim a portion of occupancy expenses. Generally, you would apportion the work-related and non-work-related expenses by floor area.

Travel between home and work
Generally, you are not entitled to claim a deduction for the cost of travel between work and your home office e.g. if you n

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 327b7599-fb26-4d18-8685-55b34517c225 Wed, 01 Apr 2020 12:01:00 +1100 894 investopoly,rules of the game,home ofice,tax deductions,save tax 1 106 false Investing is more a game of lending than it is investing Investing is more a game of lending than it is investing Author and property investor, Michal Yardney says “real estate investing is a game of finance with some houses thrown in the middle”.

People think that the scarce resource is investment-grade property. But the scarce resource is actually borrowing capacity – as everyone has a limit to how much they can and should borrow.

In a normal market, investors that seek professional advice from a buyers’ agent will eventually be able to identify and acquire a quality asset. And if you had an unlimited borrowing capacity, theoretically, you could keep buying property. However, the reality is that everyone has a limit to what they can borrow. Safely maximising that limit allows you to invest more and build personal wealth. That’s why investing is a game of lending, not investing.

My recent experience is case in point
My wife and I recently refinanced some loans from Westpac to ANZ. Most of these loans were established at Westpac in the past 3 to 5 years. One loan was established as a result of an unexpected, but advantageous, property acquisition in late 2016. To get the loan approved, we had to agree to making accelerated (additional) loan repayments to reduce debt.

However, over the past 3 years, our loan to value ratio has reduce significantly and our overall financial position has materially strengthened. Plus, we have been making substantial loan repayments thereby reducing our debt.

As such, I approached Westpac to (1) restructure our loans and (2) access some equity. In short, they said no! Whilst this was frustrating (and frankly nonsensical), it reminded me how important it is to know the rules of the lending game. You need to know when to push and when to walk. And most importantly, whether a ‘no’ is really a ‘no’ – maybe you are either talking to the wrong person at your existing bank or need to go to a different bank.

The short story is that we refinanced to ANZ, obtained a lower interest rate, almost all debt on interest only repayments (only one loan on P&I because we requested it, not the bank) and we obtained access to a large amount of equity.

To win at the game of investing, you need to first win the game of lending
I have always counselled my clients to do two things. Firstly, always borrow more money than you think you need (large buffer). Secondly, the best time to borrow is when you don’t need it.

When I started talking to Westpac back in September 2019 (yes, nearly 6 months ago!) in regard to restructuring our lending and accessing equity, I had no immediate plans for the further borrowings. However, as it has turned out, as a result of this refinance, I now have access to additional monies I can invest in the property and/or share markets if I want to i.e. there are much better buying opportunities now, compared to 6 months ago.

My point is that your ability to successfully invest to build wealth will be severely hindered if you are not able to proactively and efficiently maximise your borrowable equity.

The banks and government set the rules
In order to win the boardgame Monopoly, you firstly need to learn the rules of the game and secondly work out how to play them to your advantage. Winning the game of lending is no different.

It is important to understand that there are two types of rules.

The first category of rules is prudential lending standards – let’s call these ‘normal rules’. An example of this rule is that most lenders allow you to borrow up to 80% of a property’s value (without charging mortgage insurance). This is a hard and fast rule that cannot be b

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Author and property investor, Michal Yardney says “real estate investing is a game of finance with some houses thrown in the middle”.

People think that the scarce resource is investment-grade property. But the scarce resource is actually borrowing capacity – as everyone has a limit to how much they can and should borrow.

In a normal market, investors that seek professional advice from a buyers’ agent will eventually be able to identify and acquire a quality asset. And if you had an unlimited borrowing capacity, theoretically, you could keep buying property. However, the reality is that everyone has a limit to what they can borrow. Safely maximising that limit allows you to invest more and build personal wealth. That’s why investing is a game of lending, not investing.

My recent experience is case in point
My wife and I recently refinanced some loans from Westpac to ANZ. Most of these loans were established at Westpac in the past 3 to 5 years. One loan was established as a result of an unexpected, but advantageous, property acquisition in late 2016. To get the loan approved, we had to agree to making accelerated (additional) loan repayments to reduce debt.

However, over the past 3 years, our loan to value ratio has reduce significantly and our overall financial position has materially strengthened. Plus, we have been making substantial loan repayments thereby reducing our debt.

As such, I approached Westpac to (1) restructure our loans and (2) access some equity. In short, they said no! Whilst this was frustrating (and frankly nonsensical), it reminded me how important it is to know the rules of the lending game. You need to know when to push and when to walk. And most importantly, whether a ‘no’ is really a ‘no’ – maybe you are either talking to the wrong person at your existing bank or need to go to a different bank.

The short story is that we refinanced to ANZ, obtained a lower interest rate, almost all debt on interest only repayments (only one loan on P&I because we requested it, not the bank) and we obtained access to a large amount of equity.

To win at the game of investing, you need to first win the game of lending
I have always counselled my clients to do two things. Firstly, always borrow more money than you think you need (large buffer). Secondly, the best time to borrow is when you don’t need it.

When I started talking to Westpac back in September 2019 (yes, nearly 6 months ago!) in regard to restructuring our lending and accessing equity, I had no immediate plans for the further borrowings. However, as it has turned out, as a result of this refinance, I now have access to additional monies I can invest in the property and/or share markets if I want to i.e. there are much better buying opportunities now, compared to 6 months ago.

My point is that your ability to successfully invest to build wealth will be severely hindered if you are not able to proactively and efficiently maximise your borrowable equity.

The banks and government set the rules
In order to win the boardgame Monopoly, you firstly need to learn the rules of the game and secondly work out how to play them to your advantage. Winning the game of lending is no different.

It is important to understand that there are two types of rules.

The first category of rules is prudential lending standards – let’s call these ‘normal rules’. An example of this rule is that most lenders allow you to borrow up to 80% of a property’s value (without charging mortgage insurance). This is a hard and fast rule that cannot be b

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 8851a817-1e8a-4470-bc3b-103dd4b752a1 Wed, 25 Mar 2020 11:05:00 +1100 1085 rules of the lending game,investopoly,wemyss,borrowing,gearing,property investment,property investing 1 105 false What financial actions should you take in response to coronavirus? What financial actions should you take in response to coronavirus? Given many people are worried about the unknown consequences of the Coronavirus, I thought it was timely for me to share my thoughts and advice. Like in all ‘crises’, it is important to not let emotion or fear drive your responses. ‘A steady hand on the tiller’ is the best approach when navigating any storm.

I acknowledge that the Coronavirus may have caused significant emotional and heath distress to people around the world. I fully empathise and understand this situation and do not seek to downplay its impact. But it is important for me to stipulate that my comments below are only about the financial impacts and considerations, not any health concerns.

We’ve heard it all before! Don’t get sucked in.
Financial markets are closed.
All banks are going bust.
The way we conduct global business has changed forever and will never be the same again.
Property markets will take decades to recover.
I heard all of the above statements during 2008 and 2009 when I was glued to the TV late at night throughout the GFC. They are all alarmist predictions and have all been proven to be wrong.

The human race (and economy) is incredibly resilient and innovative. We have faced many challenges and prevailed. This will be no different. In respect to the financial impact on the vast majority of people in the long run, just like with the GFC, I suspect it won’t be that significant.

Once the coronavirus risk passes, I’m sure Australian’s will start spending again to get the economy back to its normal level. I anticipate that our spending decisions will be directed towards the most effected industries such as hospitality and tourism, with the same community mindedness that was evident during the recent bushfires.

Our lives are filled with predictions and usually most extreme ones get the most airtime. Try not to get sucked in. The best approach is to carefully avoid the mainstream media. Worrying has never made any problem better.

Short term thinking creates anxiety
When it comes to money and investing, short term thinking has always created anxiety. This is even more true when markets are volatile. Short term thinking does not serve you well. It promotes you to either be too greedy (when markets are high) or too fearful (when markets are low).

Instead, a far superior and more comfortable approach is to play the long game. Consider what actions you can take today so that you will be better off in 5, 10 and 15 years. That puts things in perspective and helps you avoid many of the common financial mistakes that people make. And realise that sometimes the most intelligent thing to do is nothing.

The impact of coronavirus on the economy and share markets is temporary, not permanent. Whether it takes 6 months, 1 year or up to 2 years to recover, only time will tell. However, history tells us that its impact will not impact on investment returns over the long run. Your decisions and actions will.

Supermarkets are a perfect reflection of share market
A walk down the aisle of your local supermarket is a sobering indication of the level of hysteria impacting the Australian and international share markets. As I write this blog, the Australian market has fallen 27% since 21 February 2020 and international and US markets have fallen by circa 20%.

But that doesn’t really tell the full story because it’s the level of volatility that has been causing the most newspaper headlines. The Australian volatility index (A-VIX) has ranged between 10% and 20% over the past decade. This week it has peaked at 55%, which is similar levels to the GF

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Given many people are worried about the unknown consequences of the Coronavirus, I thought it was timely for me to share my thoughts and advice. Like in all ‘crises’, it is important to not let emotion or fear drive your responses. ‘A steady hand on the tiller’ is the best approach when navigating any storm.

I acknowledge that the Coronavirus may have caused significant emotional and heath distress to people around the world. I fully empathise and understand this situation and do not seek to downplay its impact. But it is important for me to stipulate that my comments below are only about the financial impacts and considerations, not any health concerns.

We’ve heard it all before! Don’t get sucked in.
Financial markets are closed.
All banks are going bust.
The way we conduct global business has changed forever and will never be the same again.
Property markets will take decades to recover.
I heard all of the above statements during 2008 and 2009 when I was glued to the TV late at night throughout the GFC. They are all alarmist predictions and have all been proven to be wrong.

The human race (and economy) is incredibly resilient and innovative. We have faced many challenges and prevailed. This will be no different. In respect to the financial impact on the vast majority of people in the long run, just like with the GFC, I suspect it won’t be that significant.

Once the coronavirus risk passes, I’m sure Australian’s will start spending again to get the economy back to its normal level. I anticipate that our spending decisions will be directed towards the most effected industries such as hospitality and tourism, with the same community mindedness that was evident during the recent bushfires.

Our lives are filled with predictions and usually most extreme ones get the most airtime. Try not to get sucked in. The best approach is to carefully avoid the mainstream media. Worrying has never made any problem better.

Short term thinking creates anxiety
When it comes to money and investing, short term thinking has always created anxiety. This is even more true when markets are volatile. Short term thinking does not serve you well. It promotes you to either be too greedy (when markets are high) or too fearful (when markets are low).

Instead, a far superior and more comfortable approach is to play the long game. Consider what actions you can take today so that you will be better off in 5, 10 and 15 years. That puts things in perspective and helps you avoid many of the common financial mistakes that people make. And realise that sometimes the most intelligent thing to do is nothing.

The impact of coronavirus on the economy and share markets is temporary, not permanent. Whether it takes 6 months, 1 year or up to 2 years to recover, only time will tell. However, history tells us that its impact will not impact on investment returns over the long run. Your decisions and actions will.

Supermarkets are a perfect reflection of share market
A walk down the aisle of your local supermarket is a sobering indication of the level of hysteria impacting the Australian and international share markets. As I write this blog, the Australian market has fallen 27% since 21 February 2020 and international and US markets have fallen by circa 20%.

But that doesn’t really tell the full story because it’s the level of volatility that has been causing the most newspaper headlines. The Australian volatility index (A-VIX) has ranged between 10% and 20% over the past decade. This week it has peaked at 55%, which is similar levels to the GF

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss dbe820fc-8bf7-4778-a358-bdbbf5a139d7 Wed, 18 Mar 2020 13:27:00 +1100 1459 wemyss,investopoly,rules of lending game,coronavirus,investing,share market,property investment,long term investing 1 104 false My insights on the power of a gearing strategy My insights on the power of a gearing strategy Borrowing to invest, particularly in property, has been a very popular investment strategy in Australia. A mortgage is a wonderful servant but a terrible master. If you use mortgages properly, in a risk adverse way, it can be a very powerful wealth accumulation tool. However, if used poorly, it has the power to destroy more wealth than it creates. After almost 18 years since establishing this firm, I thought it was timely to share some insights and observations about borrowing to invest.

Inflation will eventually eat away at the value of debt over time.
Interest rates reflect inflationary expectations. That is, when inflation expectations are high, so are interest rates. As such, borrowers are paying for the inflationary cost of debt each year. This is evidenced by the fact that a loan’s amount does not change from year to year. If you borrow $200,000 today and don’t make any principal repayments, in 20 years’ time you will still owe $200,000.

But we know that over time, due to the impact of inflation, our purchasing power reduces. A $200,000 loan in the mid-1980’s was a big deal. Today, it is considered a small loan. Whereas a loan for $1 million today is regarded as a big loan. However, in 20 years, a $1 million loan will be equivalent to $670,000 in today’s dollars (assuming an inflation rate of 2% p.a.). And only $550,000 in 30 years.

Because interest rates include the cost of inflation, and investors pay for that each year, in real terms, the value of their debt reduces over time.

It magnifies your return on equity
Using some borrowings to fund the acquisition of an investment means you can contribute less of your own cash. For example, assuming interest rates are 5% p.a., if you contribute 60% of a property’s price in cash (and borrow the remaining 40%), I estimate the investment will be break-even from a cash flow perspective. That is, the rental income should be enough to pay for the property’s expenses and interest costs.

If you retain this $750,000 property for 20 years and it appreciates in value by an average of say 7% p.a., it will be worth circa $2.9 million. I estimate that the investor would crystallise approximately $2.05 million of cash after selling the property (net of costs, repaying the loan and CGT) after 20 years. So, the initial cash contribution of $450k (60% of the purchase price) has grown to $2.05 million after 20 years. That equates to a compounding annual growth rate of 7.9%. Without any gearing, the net return would have been only 5.9% p.a. So, the existence of a modest gearing rate (40%) has increased the investors return on equity by 2% p.a. This is the power of gearing.

Return on cash is even more impressive
What if you don’t contribute any of your own cash savings when you purchase the property? That is, you borrow the total cost. In this situation, your only cash contribution will be to fund the holding costs. That’s because if you borrow 100% of the acquisition costs, the property’s income will probably not be enough to pay for its expenses and loan interest. As such, you will have to contribute some of your salary income towards meeting these expenses.

I estimate the cash flow holding cost of a $750,000 property to be conservatively circa $175,000 after-tax over 20 years. If you sell the property after 20 years, you will walk away with $1.58 million in cash after repaying the loan, selling costs and CGT. Therefore, your cash contribution of $175,000 over 20 years has generated net cash gain of $1.58 million. That equates to an annual compounding rate of return of 11.6%. That is referred to your return on cash, since you didn’t contribute any equity (cash) at the beginning.

Gearing allows you to invest your future income today
What

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Borrowing to invest, particularly in property, has been a very popular investment strategy in Australia. A mortgage is a wonderful servant but a terrible master. If you use mortgages properly, in a risk adverse way, it can be a very powerful wealth accumulation tool. However, if used poorly, it has the power to destroy more wealth than it creates. After almost 18 years since establishing this firm, I thought it was timely to share some insights and observations about borrowing to invest.

Inflation will eventually eat away at the value of debt over time.
Interest rates reflect inflationary expectations. That is, when inflation expectations are high, so are interest rates. As such, borrowers are paying for the inflationary cost of debt each year. This is evidenced by the fact that a loan’s amount does not change from year to year. If you borrow $200,000 today and don’t make any principal repayments, in 20 years’ time you will still owe $200,000.

But we know that over time, due to the impact of inflation, our purchasing power reduces. A $200,000 loan in the mid-1980’s was a big deal. Today, it is considered a small loan. Whereas a loan for $1 million today is regarded as a big loan. However, in 20 years, a $1 million loan will be equivalent to $670,000 in today’s dollars (assuming an inflation rate of 2% p.a.). And only $550,000 in 30 years.

Because interest rates include the cost of inflation, and investors pay for that each year, in real terms, the value of their debt reduces over time.

It magnifies your return on equity
Using some borrowings to fund the acquisition of an investment means you can contribute less of your own cash. For example, assuming interest rates are 5% p.a., if you contribute 60% of a property’s price in cash (and borrow the remaining 40%), I estimate the investment will be break-even from a cash flow perspective. That is, the rental income should be enough to pay for the property’s expenses and interest costs.

If you retain this $750,000 property for 20 years and it appreciates in value by an average of say 7% p.a., it will be worth circa $2.9 million. I estimate that the investor would crystallise approximately $2.05 million of cash after selling the property (net of costs, repaying the loan and CGT) after 20 years. So, the initial cash contribution of $450k (60% of the purchase price) has grown to $2.05 million after 20 years. That equates to a compounding annual growth rate of 7.9%. Without any gearing, the net return would have been only 5.9% p.a. So, the existence of a modest gearing rate (40%) has increased the investors return on equity by 2% p.a. This is the power of gearing.

Return on cash is even more impressive
What if you don’t contribute any of your own cash savings when you purchase the property? That is, you borrow the total cost. In this situation, your only cash contribution will be to fund the holding costs. That’s because if you borrow 100% of the acquisition costs, the property’s income will probably not be enough to pay for its expenses and loan interest. As such, you will have to contribute some of your salary income towards meeting these expenses.

I estimate the cash flow holding cost of a $750,000 property to be conservatively circa $175,000 after-tax over 20 years. If you sell the property after 20 years, you will walk away with $1.58 million in cash after repaying the loan, selling costs and CGT. Therefore, your cash contribution of $175,000 over 20 years has generated net cash gain of $1.58 million. That equates to an annual compounding rate of return of 11.6%. That is referred to your return on cash, since you didn’t contribute any equity (cash) at the beginning.

Gearing allows you to invest your future income today
What

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss ba033a97-25f7-4f73-baa6-ac81bd491d5b Wed, 11 Mar 2020 12:05:00 +1100 1281 investopoly,rules of the lending game,wemyss,borrowing to invest,investment property,gearing strategy,investing,investment 1 103 false What impact will coronavirus have on your investments? What impact will coronavirus have on your investments? Coronavirus’ impact on share markets is a hot topic at the moment. We’ve seen global markets fall by over 10% between 21 February and 2 March 2020. It seems that the market’s sentiment shifted literally overnight from a state of being arguably ‘over-optimistic’ to being ‘very fearful’. Some of my clients have voiced their concerns about the impact that coronavirus might have on their investments. I wanted to share my thoughts on this and what actions, if any, you might take.

The share market can be a wild ride, you just need close your eyes and hang on
When the market is running hot, most investors overestimate their tolerance for risk (volatility). Often people say, “I understand that share markets can be volatile, and I’m prepared for it, let’s invest”. However, when the volatility does eventually occur, that is when you really learn about one’s appetite for risk.

We must realise that volatility is often short lived. Share markets have a volatility rate of circa 20% p.a. This means, annual returns can vary from the mean (average) return by +/- 20% from year to year. However, in the long run, there’s a strong trend of mean revision – which means investment returns in the long run are more predictable. The chart below provided by global fund manager, Dimensional demonstrates this. Market returns 5 years after a major event (e.g. crashes, terrorist attack, CGF) are positive.




And realise that you have to be in it to win it
In the face of uncertainty (i.e. higher volatility), some investors consider selling. The problems with selling is that you will likely miss the recovery. The chart below (again courtesy of Dimensional) demonstrates that your investment return between 2001 and 2018 (more than 4,300 trading days) would reduce from 7.66% p.a. to 1.76% p.a. if you missed the best 25 days over that period. In this case, you would have been better off investing in bonds, not equities.



This proves that you need to remain invested throughout good times and bad. The first rule of investing in my book
Investopoly, is to ‘play the long game’. If you applied this approach when you first invested in the share market (i.e. a diversified portfolio of low-cost, rules-based investments contructed to maximise long term returns), then you must have faith that it will work. And it will, if you’ve done it correctly.

The practical impact of the coronavirus
It would appear that the coronavirus is essentially a highly contagious form of influenza. Therefore, as long as you are in good health, its unlikely to be life threatening and mortality rates will remain contained. As such, I think the biggest impact that the virus will have is that it will adversely impact the mobility of people. For example, people will reduce or eliminate discretionary travel, they may curtail shopping and social activities and, in some circumstances (e.g. in China), businesses may cease trading because workers cannot (or are unwilling) travel to work.

This will most likely have a negative impact on economic growth in at least the first half of 2020, although growth is likely to still be positive. China has a much bigger economic footprint than it did in 2003 during the SARS outbreak, as depicted in the chart below (provided by Fidelity). Australia exports a large amount of natural resources to China. Demand for these might reduce temporarily. However, the good news is that stockpiles (inventories) are relatively low and the Chinese government may have to deploy fiscal stimulus (increase government spending) which should underpin the demand for Australian resources in the medium term.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Coronavirus’ impact on share markets is a hot topic at the moment. We’ve seen global markets fall by over 10% between 21 February and 2 March 2020. It seems that the market’s sentiment shifted literally overnight from a state of being arguably ‘over-optimistic’ to being ‘very fearful’. Some of my clients have voiced their concerns about the impact that coronavirus might have on their investments. I wanted to share my thoughts on this and what actions, if any, you might take.

The share market can be a wild ride, you just need close your eyes and hang on
When the market is running hot, most investors overestimate their tolerance for risk (volatility). Often people say, “I understand that share markets can be volatile, and I’m prepared for it, let’s invest”. However, when the volatility does eventually occur, that is when you really learn about one’s appetite for risk.

We must realise that volatility is often short lived. Share markets have a volatility rate of circa 20% p.a. This means, annual returns can vary from the mean (average) return by +/- 20% from year to year. However, in the long run, there’s a strong trend of mean revision – which means investment returns in the long run are more predictable. The chart below provided by global fund manager, Dimensional demonstrates this. Market returns 5 years after a major event (e.g. crashes, terrorist attack, CGF) are positive.




And realise that you have to be in it to win it
In the face of uncertainty (i.e. higher volatility), some investors consider selling. The problems with selling is that you will likely miss the recovery. The chart below (again courtesy of Dimensional) demonstrates that your investment return between 2001 and 2018 (more than 4,300 trading days) would reduce from 7.66% p.a. to 1.76% p.a. if you missed the best 25 days over that period. In this case, you would have been better off investing in bonds, not equities.



This proves that you need to remain invested throughout good times and bad. The first rule of investing in my book
Investopoly, is to ‘play the long game’. If you applied this approach when you first invested in the share market (i.e. a diversified portfolio of low-cost, rules-based investments contructed to maximise long term returns), then you must have faith that it will work. And it will, if you’ve done it correctly.

The practical impact of the coronavirus
It would appear that the coronavirus is essentially a highly contagious form of influenza. Therefore, as long as you are in good health, its unlikely to be life threatening and mortality rates will remain contained. As such, I think the biggest impact that the virus will have is that it will adversely impact the mobility of people. For example, people will reduce or eliminate discretionary travel, they may curtail shopping and social activities and, in some circumstances (e.g. in China), businesses may cease trading because workers cannot (or are unwilling) travel to work.

This will most likely have a negative impact on economic growth in at least the first half of 2020, although growth is likely to still be positive. China has a much bigger economic footprint than it did in 2003 during the SARS outbreak, as depicted in the chart below (provided by Fidelity). Australia exports a large amount of natural resources to China. Demand for these might reduce temporarily. However, the good news is that stockpiles (inventories) are relatively low and the Chinese government may have to deploy fiscal stimulus (increase government spending) which should underpin the demand for Australian resources in the medium term.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 7531ffdd-6e25-43c1-bdb7-7165717ea21b Tue, 03 Mar 2020 14:17:00 +1100 1239 investopoly,wemyss,coronavirus,share market 1 102 false The cost to hold an investment property hits an all-time low The cost to hold an investment property hits an all-time low Over the last few weeks, lenders have aggressively cut fixed rates, particularly for investors that borrow on an interest only basis. Three and five year fixed rates now range between 3.18% and 3.40% p.a. This means the cost to hold an investment property is as low as it’s ever been.

This doesn’t mean we all should run out and buy an investment property.

The cost to hold a median property
The graph below charts the annual after-tax holding cost of a median value house (average of Melbourne & Sydney) expressed in today’s dollars. As you can see, a property’s after-tax holding costs have typically ranged between $10,000 and $30,000 per annum over the past 40 years.


The red line is the estimated annual after-tax holding costs based on current fixed rates.

A $800k apartment will cost $500 per month to hold
Let’s look at the cost to hold an $800,000 investment property (apartment) using actual data as an example.

Therefore, this property, for example will cost you circa $505 per month (after-tax) to hold.

Low rates will likely inflate property values
It is a commonly accepted economic principal that lower interest rates typically lead to an increase in asset values (i.e. the value of equities and property rise). The reason being is that the lower cost of debt means higher profits to owners which means assets are worth more.

The graph below charts three variables:
§ The rolling average capital growth rate over 20 years for median houses in Melbourne and Sydney; and
§ The cost to hold an investment property (as charted above). This is calculated as the annual after-tax holding cost of a median house based on prevailing interest rates at that time, expressed in today’s dollars; and
§ The average rolling 20 year growth rate between 2000 and end of 2019.


This chart demonstrates that periods of higher capital growth have tended to follow periods of time where holding costs were below average.
It may cost you less cash flow to generate similar capital growth rates
As you can see from the chart above, the rolling 20 year capital growth rates have ranged between 4% p.a. and 9% p.a. It’s a big range because of the particular periods of time. For example, the low growth in 2009 measures how property values changed just prior to the early 1990’s recession and during the midst of the GFC – two unfortunate points in history. Similarly, the peak in 2003 measures growth from the early 1980’s when property boomed.

Perhaps the best long-term indicator is the average rate of 7% p.a. The average inflation rate since year 2000 is circa 2.5% p.a., so the real growth rate (i.e. excluding inflation) has been 4.5% p.a. In today’s terms, that equates to a growth rate of circa 6% p.a., assuming inflation will continue to hover at around 1.5% p.a.

Investing in an asset that generates a growth rate of 6% p.a. that only costs $500 per month to hold could produce tremendous financial outcomes.
§ Cost flow cost in today’s dollars over 20

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Over the last few weeks, lenders have aggressively cut fixed rates, particularly for investors that borrow on an interest only basis. Three and five year fixed rates now range between 3.18% and 3.40% p.a. This means the cost to hold an investment property is as low as it’s ever been.

This doesn’t mean we all should run out and buy an investment property.

The cost to hold a median property
The graph below charts the annual after-tax holding cost of a median value house (average of Melbourne & Sydney) expressed in today’s dollars. As you can see, a property’s after-tax holding costs have typically ranged between $10,000 and $30,000 per annum over the past 40 years.


The red line is the estimated annual after-tax holding costs based on current fixed rates.

A $800k apartment will cost $500 per month to hold
Let’s look at the cost to hold an $800,000 investment property (apartment) using actual data as an example.

Therefore, this property, for example will cost you circa $505 per month (after-tax) to hold.

Low rates will likely inflate property values
It is a commonly accepted economic principal that lower interest rates typically lead to an increase in asset values (i.e. the value of equities and property rise). The reason being is that the lower cost of debt means higher profits to owners which means assets are worth more.

The graph below charts three variables:
§ The rolling average capital growth rate over 20 years for median houses in Melbourne and Sydney; and
§ The cost to hold an investment property (as charted above). This is calculated as the annual after-tax holding cost of a median house based on prevailing interest rates at that time, expressed in today’s dollars; and
§ The average rolling 20 year growth rate between 2000 and end of 2019.


This chart demonstrates that periods of higher capital growth have tended to follow periods of time where holding costs were below average.
It may cost you less cash flow to generate similar capital growth rates
As you can see from the chart above, the rolling 20 year capital growth rates have ranged between 4% p.a. and 9% p.a. It’s a big range because of the particular periods of time. For example, the low growth in 2009 measures how property values changed just prior to the early 1990’s recession and during the midst of the GFC – two unfortunate points in history. Similarly, the peak in 2003 measures growth from the early 1980’s when property boomed.

Perhaps the best long-term indicator is the average rate of 7% p.a. The average inflation rate since year 2000 is circa 2.5% p.a., so the real growth rate (i.e. excluding inflation) has been 4.5% p.a. In today’s terms, that equates to a growth rate of circa 6% p.a., assuming inflation will continue to hover at around 1.5% p.a.

Investing in an asset that generates a growth rate of 6% p.a. that only costs $500 per month to hold could produce tremendous financial outcomes.
§ Cost flow cost in today’s dollars over 20

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 0576c6f0-a1e7-4462-93c9-393bf93096b7 Wed, 26 Feb 2020 11:00:00 +1100 814 investopoly,rules of the lending game,wemyss,investment property,investment loans,property investment,build wealth 1 101 false Major and important changes to income protection insurance Major and important changes to income protection insurance I wrote a blog in December last year about how difficult personal risk insurance (e.g. income protection, Life and TPD) is becoming to obtain. Also, in December, the government directed Australian insurers to make some very significant changes to their products. I have been waiting to measure the insurers response to these directives. These changes will have a significant impact on your future insurance options.

What is currently offered
Before I discuss the changes that the government has asked for, it’s important to appreciate the status quo. Most income protection policies have four main variables:

1. Benefit amount
This is the amount of income you are insured for. Most insurers allow you to insure up to 75% of your current gross income (not 100%, otherwise there’s little financial incentive to return to work). Benefit amounts are typically expressed as a monthly amount. This monthly benefit is taxed at your marginal tax rates – so a $10,000 benefit will result in an income of circa $7,140 per month after tax.

2. Waiting period
This is the period of time you must be incapacitated for before you are able to claim a benefit from the insurer. Typically, the options include 30 days, 60 days, 90 days, 6 months or 2 years. Often, the most economical wait period is 90 days. Benefits are paid one month in arrears. So, a 90 day wait period means you won’t receive any income for 4 months.

3. Agreed or indemnity
If a policy is agreed value, it means that if you become fully incapacitated, you will receive the benefit irrespective of the level of your income prior to you becoming incapacitated. Therefore, someone could have an agreed value policy for $10,000, subsequently become unemployed and then have an accident and they will be paid the full benefit.

Alternatively, an indemnity policy requires the insurer to measure your level of income in the period prior to you becoming incapacitated and pay the lesser of up to 75% of that amount or your insured benefit. This means, if your income was nil, you would not receive a benefit, despite paying the premiums for insurance cover (I elaborate on this further below).

4. Benefit period
The benefit period is how long you will receive a benefit for whilst you are still fully or partially incapacitated. Given we want protection against long term incapacity, we typically advise clients to obtain a benefit period to age 65. This means if you become incapacitated, the insurer will keep paying you until you attain age 65.

This blog discusses income protection insurance in more detail.

Why has the government stepped in?
According to the Australian Prudential Regulatory Authority (APRA), over the past 5 years, Australian insurance companies have lost $3.4 billion in respect to income protection policies. In the 9 months to September 2019, they lost $1 billion alone. This means that insurers paid out a lot more money in benefits (to insured persons) than they received in premiums (and investment returns).

APRA is worried that insurers may start withdrawing from the Australian market. If they did, income protection insurance would no longer be available, which would be to the detriment of Australians. However, none of the insurance companies have been brave enough to be the first one to make changes to their products or pricing (to make them more sustainable) – for fear of

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> I wrote a blog in December last year about how difficult personal risk insurance (e.g. income protection, Life and TPD) is becoming to obtain. Also, in December, the government directed Australian insurers to make some very significant changes to their products. I have been waiting to measure the insurers response to these directives. These changes will have a significant impact on your future insurance options.

What is currently offered
Before I discuss the changes that the government has asked for, it’s important to appreciate the status quo. Most income protection policies have four main variables:

1. Benefit amount
This is the amount of income you are insured for. Most insurers allow you to insure up to 75% of your current gross income (not 100%, otherwise there’s little financial incentive to return to work). Benefit amounts are typically expressed as a monthly amount. This monthly benefit is taxed at your marginal tax rates – so a $10,000 benefit will result in an income of circa $7,140 per month after tax.

2. Waiting period
This is the period of time you must be incapacitated for before you are able to claim a benefit from the insurer. Typically, the options include 30 days, 60 days, 90 days, 6 months or 2 years. Often, the most economical wait period is 90 days. Benefits are paid one month in arrears. So, a 90 day wait period means you won’t receive any income for 4 months.

3. Agreed or indemnity
If a policy is agreed value, it means that if you become fully incapacitated, you will receive the benefit irrespective of the level of your income prior to you becoming incapacitated. Therefore, someone could have an agreed value policy for $10,000, subsequently become unemployed and then have an accident and they will be paid the full benefit.

Alternatively, an indemnity policy requires the insurer to measure your level of income in the period prior to you becoming incapacitated and pay the lesser of up to 75% of that amount or your insured benefit. This means, if your income was nil, you would not receive a benefit, despite paying the premiums for insurance cover (I elaborate on this further below).

4. Benefit period
The benefit period is how long you will receive a benefit for whilst you are still fully or partially incapacitated. Given we want protection against long term incapacity, we typically advise clients to obtain a benefit period to age 65. This means if you become incapacitated, the insurer will keep paying you until you attain age 65.

This blog discusses income protection insurance in more detail.

Why has the government stepped in?
According to the Australian Prudential Regulatory Authority (APRA), over the past 5 years, Australian insurance companies have lost $3.4 billion in respect to income protection policies. In the 9 months to September 2019, they lost $1 billion alone. This means that insurers paid out a lot more money in benefits (to insured persons) than they received in premiums (and investment returns).

APRA is worried that insurers may start withdrawing from the Australian market. If they did, income protection insurance would no longer be available, which would be to the detriment of Australians. However, none of the insurance companies have been brave enough to be the first one to make changes to their products or pricing (to make them more sustainable) – for fear of

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss f6ebdbe0-e36d-4f1a-bec1-67ada878e009 Wed, 19 Feb 2020 13:57:00 +1100 988 Investopoly,wemyss,income portection,financial advice,insurance,income protection insurance, 1 100 false It's a perfect time to sell dud investments It's a perfect time to sell dud investments With share markets at an all-time high and sentiment in the property market recovering, it is a great opportunity to divest of any underperforming (dud) investments.

Not all investments perform as expected. Therefore, it’s important you regularly review them. This review should be completed without any influence of emotion – it’s all about the numbers.

Let’s first discuss why now might be a good time to do this.

The US share market is high, very high
Over the past 11 years, the US share market has increased by an annual compounding rate of over 14.5% and is now trading at an all-time high. To put that in context, $50,000 invested in 2009 (in the S&P 500 index) would be worth over $220,000 today!

The chart below which has been produced by Advisor Perspective records four commonly used valuation metrics for the US share market since 1900. This chart doesn’t need any commentary from me – it is obvious valuations are high! Probably, too high! In fact, the last time they were this high was in the early 2000’s during the dot-com bubble. Most of us know how that turned out – the market fell by around 40% between 2001 and 2003.




The Australian market is high too
The Australian market hasn’t risen anywhere near as much as the US market. It has increased by a compounding average of 6.9% p.a. since 2009 (compared to 14.5% p.a. for the US market). Looking at the CAPE Ratio valuation measure, the Australian market looks slightly overvalued (CAPE is currently 19.3 compared to presumed fair value of 17.6), but certainly to a much less extent than the US market.



In a rising tide, all ships rise
The rising domestic and international share markets tend to drag all stocks with them, good and bad ones alike. Irrationally exuberant markets tend to ignore investment fundamentals.

US electronic car manufacture, Tesla is a case in point. Its share price has risen from $450 per share to over $1,150 per share in the past year. Its market capitalisation is now nearly $200 billion yet it has never recorded a profit. In fact, it burns through more than $1 billion of cash per year! But, despite that, the
market suggests Tesla is worth 1.6 times more than Ford and General Motors combined! Ford and GM sell approximately 13 million cars per year. Tesla sells circa 370,000. Where is the common sense?

Property market sentiment is strengthening
We have certainly noticed an improvement in sentiment towards investing in property over the past year. This has also been reflected in auction clearance rates – which are now in the mid-70’s – which is a signal that there are more buyers than there are sellers. According to CBA Economics, lending to owner-occupiers has lifted by 26% from its low point in May 2019 and by 15.5% for investors.

That said, there isn’t a lot of stock around, as the market doesn’t really return to ‘normal’ until late February.

Probably a good time to dispose of a dud property
If you have an investment property that is less-than-perfect, then competition is not your friend. That is, it is best to sell an impaired asset when stock levels are lower, and buyers have fewer options. If we agree that demand for property is increasing, and stock levels are definitely well below normal, then now might be a perfect time to sell.

Considerations before you dispose
There are a few important matters to consider before you dispose of any underperforming

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> With share markets at an all-time high and sentiment in the property market recovering, it is a great opportunity to divest of any underperforming (dud) investments.

Not all investments perform as expected. Therefore, it’s important you regularly review them. This review should be completed without any influence of emotion – it’s all about the numbers.

Let’s first discuss why now might be a good time to do this.

The US share market is high, very high
Over the past 11 years, the US share market has increased by an annual compounding rate of over 14.5% and is now trading at an all-time high. To put that in context, $50,000 invested in 2009 (in the S&P 500 index) would be worth over $220,000 today!

The chart below which has been produced by Advisor Perspective records four commonly used valuation metrics for the US share market since 1900. This chart doesn’t need any commentary from me – it is obvious valuations are high! Probably, too high! In fact, the last time they were this high was in the early 2000’s during the dot-com bubble. Most of us know how that turned out – the market fell by around 40% between 2001 and 2003.




The Australian market is high too
The Australian market hasn’t risen anywhere near as much as the US market. It has increased by a compounding average of 6.9% p.a. since 2009 (compared to 14.5% p.a. for the US market). Looking at the CAPE Ratio valuation measure, the Australian market looks slightly overvalued (CAPE is currently 19.3 compared to presumed fair value of 17.6), but certainly to a much less extent than the US market.



In a rising tide, all ships rise
The rising domestic and international share markets tend to drag all stocks with them, good and bad ones alike. Irrationally exuberant markets tend to ignore investment fundamentals.

US electronic car manufacture, Tesla is a case in point. Its share price has risen from $450 per share to over $1,150 per share in the past year. Its market capitalisation is now nearly $200 billion yet it has never recorded a profit. In fact, it burns through more than $1 billion of cash per year! But, despite that, the
market suggests Tesla is worth 1.6 times more than Ford and General Motors combined! Ford and GM sell approximately 13 million cars per year. Tesla sells circa 370,000. Where is the common sense?

Property market sentiment is strengthening
We have certainly noticed an improvement in sentiment towards investing in property over the past year. This has also been reflected in auction clearance rates – which are now in the mid-70’s – which is a signal that there are more buyers than there are sellers. According to CBA Economics, lending to owner-occupiers has lifted by 26% from its low point in May 2019 and by 15.5% for investors.

That said, there isn’t a lot of stock around, as the market doesn’t really return to ‘normal’ until late February.

Probably a good time to dispose of a dud property
If you have an investment property that is less-than-perfect, then competition is not your friend. That is, it is best to sell an impaired asset when stock levels are lower, and buyers have fewer options. If we agree that demand for property is increasing, and stock levels are definitely well below normal, then now might be a perfect time to sell.

Considerations before you dispose
There are a few important matters to consider before you dispose of any underperforming

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss d13b67e4-fd91-4bf8-9f16-f922adf5627e Wed, 12 Feb 2020 11:21:00 +1100 1077 wemyss,investopoly,rules of the lending game,investments,time to sell,investment advice,property market,share market,S&P500,ASX200, 1 99 false Are investment-grade apartments primed for growth in Melbourne and Sydney? Are investment-grade apartments primed for growth in Melbourne and Sydney? Over the past few years I have observed a strong trend of investment-grade house prices growing stronger than apartments. It is true that all markets move in cycles and all cycles come to an end, eventually. It’s my thesis that several factors (such as the fall in the volume of new apartments, contraction of borrowing capacity and high population growth) are conspiring to create a growth cycle for older-style, investment-grade apartments.

Supply of new build apartments drying up, fast
Development approvals for new apartments has been falling dramatically over the past few years. In Sydney, the volume of new apartments approved for construction has more than halved since its peak in 2016. In Melbourne, approvals have fallen nearly 40% in the last 18 months. The Brisbane apartment market is almost non-existing with less than a quarter of the volume compared to the peak in 2016.




Major residential developments typically have a lead time of at least 18 to 24 months (i.e. planning through to construction). Therefore, if this trend continues, there will be a massive supply-shortage of apartments within the next few years. There is still some pipeline stock to come onto the market, however, once those properties are completed, supply is expected to fall.

New-build apartments aren’t constructed with the secondary market in mind
Purchasing a new build apartment and an establish apartment are materially different things.

Typically, a brand-new apartment purchaser is influenced by things such as apartment finish and building amenities such as theatre rooms, pools and gyms. In the beginning, these buildings are all shiny and new and present very well. However, they tend to wear and tear quickly and these largely superficial attributes become far less persuasive (and costly to maintain).

Conversely, established apartment buyers rarely focus on these factors – mainly because older style apartments rarely offer such amenities. Instead, these buyers tend to focus on factors such as location, privacy, soundproofing, natural light, smaller blocks (fewer tenants) and so on.

Understandably, when you compare a brand-new apartment to an established apartment, the shiny new object gets all the attention. However, because a newer apartment is no longer shiny after 3 to 5 years of wear and tear, an older-style apartment starts to look comparatively more attractive.

Borrowing capacity is diminished
It has been very well documented that borrowing capacity has contracted significantly over the past few years. This means a property buyer’s purchasing power is less which forces them choose between two options. First, an apartment in a nice, blue-chip suburb close to everything. Or, second, a house in the outer suburbs. Many people will choose the first option. Consequently, I predict the reduction of borrowing capacity will force more property buyers into the apartment market.

Houses are too expensive for many people
Approximately ten years ago it was possible to purchase an investment-grade house in Melbourne for around $800,000. However, today, you need over $1 million. Therefore, if your budget is $800,000 you have two options. You can purchase an apartment, not a house. Or you can find a house in an adjoining, non-investment-grade suburb (i.e. compromise on the investment’s quality).

With house prices continuing to increase, an increasing number of property buyers will be forced into the apartment market.

Cladding and building quality issues make new apartments harder to sell
Building quality issues in a few Sydney apartment complexes (e.g.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Over the past few years I have observed a strong trend of investment-grade house prices growing stronger than apartments. It is true that all markets move in cycles and all cycles come to an end, eventually. It’s my thesis that several factors (such as the fall in the volume of new apartments, contraction of borrowing capacity and high population growth) are conspiring to create a growth cycle for older-style, investment-grade apartments.

Supply of new build apartments drying up, fast
Development approvals for new apartments has been falling dramatically over the past few years. In Sydney, the volume of new apartments approved for construction has more than halved since its peak in 2016. In Melbourne, approvals have fallen nearly 40% in the last 18 months. The Brisbane apartment market is almost non-existing with less than a quarter of the volume compared to the peak in 2016.




Major residential developments typically have a lead time of at least 18 to 24 months (i.e. planning through to construction). Therefore, if this trend continues, there will be a massive supply-shortage of apartments within the next few years. There is still some pipeline stock to come onto the market, however, once those properties are completed, supply is expected to fall.

New-build apartments aren’t constructed with the secondary market in mind
Purchasing a new build apartment and an establish apartment are materially different things.

Typically, a brand-new apartment purchaser is influenced by things such as apartment finish and building amenities such as theatre rooms, pools and gyms. In the beginning, these buildings are all shiny and new and present very well. However, they tend to wear and tear quickly and these largely superficial attributes become far less persuasive (and costly to maintain).

Conversely, established apartment buyers rarely focus on these factors – mainly because older style apartments rarely offer such amenities. Instead, these buyers tend to focus on factors such as location, privacy, soundproofing, natural light, smaller blocks (fewer tenants) and so on.

Understandably, when you compare a brand-new apartment to an established apartment, the shiny new object gets all the attention. However, because a newer apartment is no longer shiny after 3 to 5 years of wear and tear, an older-style apartment starts to look comparatively more attractive.

Borrowing capacity is diminished
It has been very well documented that borrowing capacity has contracted significantly over the past few years. This means a property buyer’s purchasing power is less which forces them choose between two options. First, an apartment in a nice, blue-chip suburb close to everything. Or, second, a house in the outer suburbs. Many people will choose the first option. Consequently, I predict the reduction of borrowing capacity will force more property buyers into the apartment market.

Houses are too expensive for many people
Approximately ten years ago it was possible to purchase an investment-grade house in Melbourne for around $800,000. However, today, you need over $1 million. Therefore, if your budget is $800,000 you have two options. You can purchase an apartment, not a house. Or you can find a house in an adjoining, non-investment-grade suburb (i.e. compromise on the investment’s quality).

With house prices continuing to increase, an increasing number of property buyers will be forced into the apartment market.

Cladding and building quality issues make new apartments harder to sell
Building quality issues in a few Sydney apartment complexes (e.g.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 5be03d43-3350-42b2-8b48-3aa50c6f6846 Wed, 05 Feb 2020 11:00:00 +1100 1083 Investopoly,rules of the lending game,wemyss,property investment,property,invest in property,build wealth,wealth,independent advice 1 98 false What are the best alternatives to term deposits? What are the best alternatives to term deposits? With term deposit rates currently ranging between 1% and 2% p.a., and the prospect of further rate cuts by the RBA, many investors are contemplating where to invest their cash. Most commentators and economists agree that it looks like the interest rate environment will be lower for longer. If that turns out to be true, term deposit returns won’t even keep up with inflation. Therefore, most people will need to consider alternative investments. However, there is one potentially costly mistake that people commonly make when doing this. That is the topic of this blog.

By the way, even if this doesn’t apply to you, it’s important to check that your parents aren’t making this potentially costly mistake. So, perhaps share this blog with them.

You cannot talk about returns without also talking about risk
Benjamin Graham, the father of value investing (and Warren Buffett’s teacher) said “The essence of investment management is the management of risks, not the management of returns.” This quote highlights the biggest mistake that investors make when considering alternative investments (to term deposits). They fail to consider risk.

Often, people may be tempted to invest in high-yielding Australian shares. As I highlighted in last week’s blog, Westpac (for example) currently offers a grossed up yield of nearly 10% p.a. That is hard to resist when you compare that to term deposit rates.

However, term deposits are almost risk free, especially if the amount is less than $250,000 and with a bank (ADI), as its guaranteed by the government. However, shares are one of the highest risk asset classes because they have a volatility rate in the range of 18% and 25%. This means that statistically, you should expect your investment returns to vary by this amount from year to year. For example, one year you might experience a 15% loss and the next year a 35% gain. Of course, it could be worse, and the market could crash. Share market and term deposits are at opposite ends of the risk spectrum.

Don’t put all your assets in a risky basket
The common mistake that people make is not considering their risk allocation. For example, Keith has been retired for 5 years and historically he had $350k invested in term deposits and $650k invested in shares. This asset allocation (35% in safe assets and 65% in risky assets) felt very comfortable to him. However, now his pool of “safe” monies isn’t generating enough income. So, if he invests this amount in high yielding shares, he’s making a big mistake (because typically, that asset allocation is too aggressive for a retiree.

At some point in our life (particularly in retirement), capital preservation becomes more important than investment returns. That is, avoiding losing money is justifiably more important than making money.

Telstra is a good example
Historically, investing in Telstra primarily for its high dividend yield was very popular trend. Over the past 10 years its grossed-up dividend yield has ranged between 5% and 10% p.a. However, spare a thought for the investors that chased high dividends in 2015 when Telstra shares were trading at $6 per share and the grossed-up yield was over 7% p.a. These investors have lost over 35% of the original value of their investment (which they may never recover)! Chasing yield, without any consideration of risk, is a recipe for disaster.




So, what are the alternatives?
There are a few alternatives to term deposits that warrant consideration (I list five below). Before I get into the list, I have a few

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> With term deposit rates currently ranging between 1% and 2% p.a., and the prospect of further rate cuts by the RBA, many investors are contemplating where to invest their cash. Most commentators and economists agree that it looks like the interest rate environment will be lower for longer. If that turns out to be true, term deposit returns won’t even keep up with inflation. Therefore, most people will need to consider alternative investments. However, there is one potentially costly mistake that people commonly make when doing this. That is the topic of this blog.

By the way, even if this doesn’t apply to you, it’s important to check that your parents aren’t making this potentially costly mistake. So, perhaps share this blog with them.

You cannot talk about returns without also talking about risk
Benjamin Graham, the father of value investing (and Warren Buffett’s teacher) said “The essence of investment management is the management of risks, not the management of returns.” This quote highlights the biggest mistake that investors make when considering alternative investments (to term deposits). They fail to consider risk.

Often, people may be tempted to invest in high-yielding Australian shares. As I highlighted in last week’s blog, Westpac (for example) currently offers a grossed up yield of nearly 10% p.a. That is hard to resist when you compare that to term deposit rates.

However, term deposits are almost risk free, especially if the amount is less than $250,000 and with a bank (ADI), as its guaranteed by the government. However, shares are one of the highest risk asset classes because they have a volatility rate in the range of 18% and 25%. This means that statistically, you should expect your investment returns to vary by this amount from year to year. For example, one year you might experience a 15% loss and the next year a 35% gain. Of course, it could be worse, and the market could crash. Share market and term deposits are at opposite ends of the risk spectrum.

Don’t put all your assets in a risky basket
The common mistake that people make is not considering their risk allocation. For example, Keith has been retired for 5 years and historically he had $350k invested in term deposits and $650k invested in shares. This asset allocation (35% in safe assets and 65% in risky assets) felt very comfortable to him. However, now his pool of “safe” monies isn’t generating enough income. So, if he invests this amount in high yielding shares, he’s making a big mistake (because typically, that asset allocation is too aggressive for a retiree.

At some point in our life (particularly in retirement), capital preservation becomes more important than investment returns. That is, avoiding losing money is justifiably more important than making money.

Telstra is a good example
Historically, investing in Telstra primarily for its high dividend yield was very popular trend. Over the past 10 years its grossed-up dividend yield has ranged between 5% and 10% p.a. However, spare a thought for the investors that chased high dividends in 2015 when Telstra shares were trading at $6 per share and the grossed-up yield was over 7% p.a. These investors have lost over 35% of the original value of their investment (which they may never recover)! Chasing yield, without any consideration of risk, is a recipe for disaster.




So, what are the alternatives?
There are a few alternatives to term deposits that warrant consideration (I list five below). Before I get into the list, I have a few

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss fef52aec-a77b-45e9-b485-4f4958f59c26 Wed, 29 Jan 2020 10:00:00 +1100 1156 investopoly,wemyss,term deposits,investing,income,retirement,share market,investment advice, 1 97 false Tax benefits associated with investing in shares Tax benefits associated with investing in shares Investing in shares can produce tax benefits. But it can also result in tax liabilities too. Terms such as “franking credits” and “imputation credits” (same thing) were frequently used during last year’s federal election (the Labor Party proposed to ban franking credit refunds). However, many people do not understand these concepts. So, this blog seeks to provide a simple overview of the possible taxation consequences resulting from investing in shares.

There are two types of taxes that could result from making an investment (including share market investments) being income tax and Capital Gains Tax (CGT).

Income tax and franking credits
Some shares pay investors an income which is called a dividend. This is typically paid twice per year (interim plus final dividend). The amount of the dividend can vary significantly (this is called the dividend yield – refer to this blog for a basic overview of investing in shares).

A company can declare and pay a dividend from profit after it has paid tax. The dividend imputation system was introduced in Australia in 1987 by the Hawke-Keating Labor Government. Essentially, it sought to avoid the double taxing of corporate profits. This is best explained as an example.

Assume listed company XYZ Ltd recorded a profit of $100. It would pay $30 in tax because the corporate tax rate is 30% for companies with turnover of greater than $50 million. So, its after tax profit is $70. If it paid the dividend to shareholders who are individuals on the highest margin income tax rate of 47%, they would pay $32.90 of tax (being 47% of $70). The amount of the dividend left after paying all taxes is only $37.10 meaning the effective tax rate is 62.9%! In this instance, company profits have been taxed twice – once in the hands of the company and then again in the hand of the shareholder. Hawke-Keating believed this double taxation was unfair.

So, how does dividend imputation work?
To avoid the double-taxing of dividends, shareholders obtain a credit for the amount of tax the company has previously paid. Using the example above, the company has already paid $30 in tax so the shareholders will obtain a credit for this amount.

The formula is: cash amount of dividend plus franking credit multiplied by the marginal tax rate minus the franking credits.

Therefore, using the example above, the cash dividend is $70 + $30 of franking credits X 47% - $30 franking credit = $17. So, the shareholder will pay an additional amount of tax of $17 when they lodge their tax return. This means the net dividend retained after all taxes is $53 ($100 - $30 - $17).

Imputation credit refunds
If the shareholder has an effective tax rate lower than the corporate tax rate, then they will receive a tax refund. A good example of this is superannuation funds. A super fund’s tax rate is 15%.

Therefore, a super fund will receive the dividend of $70 plus a refund of $15 (i.e. using the formula above; $70 + $30 X 15% - $30 = refund of $15). If the super fund is in pension phase, its tax rate is zero so it will receive a full refund of all imputation credits i.e. $70 + $30. This is what the Labor Party was arguing against last year i.e. that self-managed super funds shouldn’t be entitled to a refund.

International shares offer limited tax credits
Most foreign countries do not have an imputation system except for New Zealand. That said, you may be entitled to foreign tax credits resulting from receiving dividends. However, any credits will typically be relatively immaterial, and certainly not as g

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Investing in shares can produce tax benefits. But it can also result in tax liabilities too. Terms such as “franking credits” and “imputation credits” (same thing) were frequently used during last year’s federal election (the Labor Party proposed to ban franking credit refunds). However, many people do not understand these concepts. So, this blog seeks to provide a simple overview of the possible taxation consequences resulting from investing in shares.

There are two types of taxes that could result from making an investment (including share market investments) being income tax and Capital Gains Tax (CGT).

Income tax and franking credits
Some shares pay investors an income which is called a dividend. This is typically paid twice per year (interim plus final dividend). The amount of the dividend can vary significantly (this is called the dividend yield – refer to this blog for a basic overview of investing in shares).

A company can declare and pay a dividend from profit after it has paid tax. The dividend imputation system was introduced in Australia in 1987 by the Hawke-Keating Labor Government. Essentially, it sought to avoid the double taxing of corporate profits. This is best explained as an example.

Assume listed company XYZ Ltd recorded a profit of $100. It would pay $30 in tax because the corporate tax rate is 30% for companies with turnover of greater than $50 million. So, its after tax profit is $70. If it paid the dividend to shareholders who are individuals on the highest margin income tax rate of 47%, they would pay $32.90 of tax (being 47% of $70). The amount of the dividend left after paying all taxes is only $37.10 meaning the effective tax rate is 62.9%! In this instance, company profits have been taxed twice – once in the hands of the company and then again in the hand of the shareholder. Hawke-Keating believed this double taxation was unfair.

So, how does dividend imputation work?
To avoid the double-taxing of dividends, shareholders obtain a credit for the amount of tax the company has previously paid. Using the example above, the company has already paid $30 in tax so the shareholders will obtain a credit for this amount.

The formula is: cash amount of dividend plus franking credit multiplied by the marginal tax rate minus the franking credits.

Therefore, using the example above, the cash dividend is $70 + $30 of franking credits X 47% - $30 franking credit = $17. So, the shareholder will pay an additional amount of tax of $17 when they lodge their tax return. This means the net dividend retained after all taxes is $53 ($100 - $30 - $17).

Imputation credit refunds
If the shareholder has an effective tax rate lower than the corporate tax rate, then they will receive a tax refund. A good example of this is superannuation funds. A super fund’s tax rate is 15%.

Therefore, a super fund will receive the dividend of $70 plus a refund of $15 (i.e. using the formula above; $70 + $30 X 15% - $30 = refund of $15). If the super fund is in pension phase, its tax rate is zero so it will receive a full refund of all imputation credits i.e. $70 + $30. This is what the Labor Party was arguing against last year i.e. that self-managed super funds shouldn’t be entitled to a refund.

International shares offer limited tax credits
Most foreign countries do not have an imputation system except for New Zealand. That said, you may be entitled to foreign tax credits resulting from receiving dividends. However, any credits will typically be relatively immaterial, and certainly not as g

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 34b97ad7-40f1-4e57-a7ce-28d62afb4d61 Wed, 22 Jan 2020 11:00:00 +1100 1029 investopoly,wemyss,franking credits,shares,sharemarket,investing in shares,financial advice,investing,imputation credits,dividends 1 96 false What does (should) a financial planner do for you? What does (should) a financial planner do for you? An independent financial advisor does a lot more than just tell you how to invest your money. In fact, a lot of the work they do is ‘behind the scenes’ so I thought it was a good idea to share this information in a blog. This will give you a better idea of what a financial advisor does, and therefore whether you might benefit from having one.

Develop a long-term strategy for you
One of the predominant reasons people engage a financial advisor is to help them map out a long-term investment strategy to work out how they will achieve their financial and lifestyles goals. This includes what to invest in, how and how much, also when and similar considerations. I believe that adopting a holistic approach will reveal the most efficient and effective strategy because it considers all facets including super, property and shares, tax minimization and so on.

A long-term strategy must be robust enough to accommodate expected market and situational changes. However, it may be necessary to make small changes to the strategy as time elapses.

Engaging the services of a professional advisor to help you with this will yield numerous benefits including reassuring you that you are taking the right approach, ensuring you don’t waste time and money pursuing the wrong strategy, making sure that you have considered various strategies (e.g. an advisor might recommend an approach you have never thought of).

Research investment options and strategies
The financial services industry is very dynamic and always changing. Fund managers are busily working hard to find an edge, a strategy that will help them produces better returns. Also, academic and peer research is published at an increasing rate – again, trying to identify the factors and market forces that will drive future returns.

All advisors must keep on top of these new advances. More importantly, an advisor must work diligently to separate fundamentally sound strategies and products from “marketing”. A fund managers job is to develop products to attract investors’ funds. Sometimes, they pursue this goal at the cost of quality i.e. develop products that sound sexy but lack fundamentals and substance. Such products must be given a wide berth.

I guestimate that I probably only use 1 out of every 50 to 100 products or strategies that I investigate. There’s a lot of rubbish out there so ‘buyer beware’ is a good mantra to live by.

Keep up to date with all changes
It’s not news to anyone that tax, super and compliance laws are constantly changing. So, it is very important that an advisor keeps on top of all these changes. For example, every month I spend 2 hours in a classroom learning about all the recent tax changes (I must admit, it’s not the highlight of my month!). In addition, I attend numerous half and full-day events to keep on top of markets, products, strategies, credit policies, superannuation and so on. This is in addition to regular one-on-one meetings with fund managers and reading lots of blogs and listening to podcasts.

If you don’t use the services of an advisor, you must consider the opportunity cost of doing so, what are you missing out on?

Make sure you don’t make any mistakes
Often, investing is very simple, but it’s not always easy. The best evidence of this is that most Australians fail to accumulate enough wealth to enjoy a (self-funded) comfortable retirement.

It is easy to get distracted by shiny objects. Or react to fear (tons of negative newspaper articles or hysterical predictions). And it’s often tempting to try and take short cuts.

But none of these actions will produce wealth in the long run. In fact, the best case is that will wa

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> An independent financial advisor does a lot more than just tell you how to invest your money. In fact, a lot of the work they do is ‘behind the scenes’ so I thought it was a good idea to share this information in a blog. This will give you a better idea of what a financial advisor does, and therefore whether you might benefit from having one.

Develop a long-term strategy for you
One of the predominant reasons people engage a financial advisor is to help them map out a long-term investment strategy to work out how they will achieve their financial and lifestyles goals. This includes what to invest in, how and how much, also when and similar considerations. I believe that adopting a holistic approach will reveal the most efficient and effective strategy because it considers all facets including super, property and shares, tax minimization and so on.

A long-term strategy must be robust enough to accommodate expected market and situational changes. However, it may be necessary to make small changes to the strategy as time elapses.

Engaging the services of a professional advisor to help you with this will yield numerous benefits including reassuring you that you are taking the right approach, ensuring you don’t waste time and money pursuing the wrong strategy, making sure that you have considered various strategies (e.g. an advisor might recommend an approach you have never thought of).

Research investment options and strategies
The financial services industry is very dynamic and always changing. Fund managers are busily working hard to find an edge, a strategy that will help them produces better returns. Also, academic and peer research is published at an increasing rate – again, trying to identify the factors and market forces that will drive future returns.

All advisors must keep on top of these new advances. More importantly, an advisor must work diligently to separate fundamentally sound strategies and products from “marketing”. A fund managers job is to develop products to attract investors’ funds. Sometimes, they pursue this goal at the cost of quality i.e. develop products that sound sexy but lack fundamentals and substance. Such products must be given a wide berth.

I guestimate that I probably only use 1 out of every 50 to 100 products or strategies that I investigate. There’s a lot of rubbish out there so ‘buyer beware’ is a good mantra to live by.

Keep up to date with all changes
It’s not news to anyone that tax, super and compliance laws are constantly changing. So, it is very important that an advisor keeps on top of all these changes. For example, every month I spend 2 hours in a classroom learning about all the recent tax changes (I must admit, it’s not the highlight of my month!). In addition, I attend numerous half and full-day events to keep on top of markets, products, strategies, credit policies, superannuation and so on. This is in addition to regular one-on-one meetings with fund managers and reading lots of blogs and listening to podcasts.

If you don’t use the services of an advisor, you must consider the opportunity cost of doing so, what are you missing out on?

Make sure you don’t make any mistakes
Often, investing is very simple, but it’s not always easy. The best evidence of this is that most Australians fail to accumulate enough wealth to enjoy a (self-funded) comfortable retirement.

It is easy to get distracted by shiny objects. Or react to fear (tons of negative newspaper articles or hysterical predictions). And it’s often tempting to try and take short cuts.

But none of these actions will produce wealth in the long run. In fact, the best case is that will wa

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss f2f03fba-1266-4424-a1f4-db4c71ebf4e7 Wed, 15 Jan 2020 10:00:00 +1100 1187 Investopoly,wemyss,financial advisor,indepenent advice,investing, 1 95 false Warning: Personal insurance is becoming impossible to get! Warning: Personal insurance is becoming impossible to get! Personal insurances such as Income Protection, Life insurance and Total and Permanent Disability (TPD) are becoming impossible to get unless you are in perfect health. This change has occurred gradually over the past few years but has now reached the point that it’s become a real concern. This has a number of consequences which I discuss below.

Insurers have a bad name
We heard some shocking stories last year via the Banking Royal Commission about insurance companies including questionable and even unethical sales tactics, unreasonably denying paying claims and so on. I’m not sticking up for the insurance companies. Their tactics are boarding on criminal. However, also, a big contributor towards these problems is that people don’t understand what they are buying.

When it comes to insurance cover, the advantage of “no questions asked” might seem convenient, but it just isn’t in your favour. You want to ensure the insurer comprehensively underwrites your cover before they put the cover into force. This includes asking you questions, undertaking medical checks, reviewing medical history and so on. Doing so leaves them less room to use the excuse of a “pre-existing condition” to deny any future claim.

Also, it’s important to understand the quality of the policy. Quality refers to the terms and conditions and definitions within a policy document. These all impact how comprehensive the cover is. If you get these two things right (i.e. quality and underwriting), you are much less likely to experience problems or nasty surprises down the track.

What has changed?
It is the underwriting and assessment process that has changed over the past few years. Insurers are, in our opinion, being over-stringent.

Normally, if an insurer believes that you have a pre-existing health condition, they can take one of four actions:
1. Approve the cover anyway (this is very unlikely); or
2. Add an exclusion on the policy (meaning that you are not covered if that health concern causes you problems); or
3. Add a loading onto the premium (i.e. charge a higher premium); or
4. Decline the cover.

A policy exclusion or outright decline are the most common outcomes – even for minor, inconsequential, asymptomatic health conditions! Lately, it seems that unless you are in absolutely perfect health, it is difficult to obtain exclusion-free insurance cover.

Do health concerns have to be major?
In short, no. This is what is so frustrating i.e. getting a decline or exclusion for a minor past medical condition. Some examples include:
§ A back exclusion for a client that liked to get relaxation massages spasmodically.
§ An elbow exclusion because a client had a once-off tennis elbow injury caused by a lot of typing during an intense study period. The jury was not ongoing, and clients was symptom free.
§ Spine exclusion based on regular chiropractic visits for preventative reasons only (client plays a lot of sport) – no injury treatment.
§ An insurer limited the clients benefit period to 5 years (period usually expires at age 65) plus added a 75% premium loading because the client worked long hours and had a high cholesterol reading.

Mental health has become a ‘challenge’
In Australian, mental health conditions are the third most common cause of TPD claims, and the second most common cause of income protection claims. As such, insurers are becoming more conscious of these risks and mental health exclusions (and even declines) are becoming more common.

We have had situations whe

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Personal insurances such as Income Protection, Life insurance and Total and Permanent Disability (TPD) are becoming impossible to get unless you are in perfect health. This change has occurred gradually over the past few years but has now reached the point that it’s become a real concern. This has a number of consequences which I discuss below.

Insurers have a bad name
We heard some shocking stories last year via the Banking Royal Commission about insurance companies including questionable and even unethical sales tactics, unreasonably denying paying claims and so on. I’m not sticking up for the insurance companies. Their tactics are boarding on criminal. However, also, a big contributor towards these problems is that people don’t understand what they are buying.

When it comes to insurance cover, the advantage of “no questions asked” might seem convenient, but it just isn’t in your favour. You want to ensure the insurer comprehensively underwrites your cover before they put the cover into force. This includes asking you questions, undertaking medical checks, reviewing medical history and so on. Doing so leaves them less room to use the excuse of a “pre-existing condition” to deny any future claim.

Also, it’s important to understand the quality of the policy. Quality refers to the terms and conditions and definitions within a policy document. These all impact how comprehensive the cover is. If you get these two things right (i.e. quality and underwriting), you are much less likely to experience problems or nasty surprises down the track.

What has changed?
It is the underwriting and assessment process that has changed over the past few years. Insurers are, in our opinion, being over-stringent.

Normally, if an insurer believes that you have a pre-existing health condition, they can take one of four actions:
1. Approve the cover anyway (this is very unlikely); or
2. Add an exclusion on the policy (meaning that you are not covered if that health concern causes you problems); or
3. Add a loading onto the premium (i.e. charge a higher premium); or
4. Decline the cover.

A policy exclusion or outright decline are the most common outcomes – even for minor, inconsequential, asymptomatic health conditions! Lately, it seems that unless you are in absolutely perfect health, it is difficult to obtain exclusion-free insurance cover.

Do health concerns have to be major?
In short, no. This is what is so frustrating i.e. getting a decline or exclusion for a minor past medical condition. Some examples include:
§ A back exclusion for a client that liked to get relaxation massages spasmodically.
§ An elbow exclusion because a client had a once-off tennis elbow injury caused by a lot of typing during an intense study period. The jury was not ongoing, and clients was symptom free.
§ Spine exclusion based on regular chiropractic visits for preventative reasons only (client plays a lot of sport) – no injury treatment.
§ An insurer limited the clients benefit period to 5 years (period usually expires at age 65) plus added a 75% premium loading because the client worked long hours and had a high cholesterol reading.

Mental health has become a ‘challenge’
In Australian, mental health conditions are the third most common cause of TPD claims, and the second most common cause of income protection claims. As such, insurers are becoming more conscious of these risks and mental health exclusions (and even declines) are becoming more common.

We have had situations whe

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 212eccda-daa8-4afa-810a-ce1bd4ca2849 Thu, 12 Dec 2019 09:00:00 +1100 1096 investopoly,rules of the lending game,wemyss,insurance,income protection,TPD,Life insurance, 1 94 false How can you invest well and help the planet at the same time? How can you invest well and help the planet at the same time? The bushfires in NSW and Queensland recently reinvigorated the conversation about global warming and whether the Australian government is doing enough to combat it. I’ll refrain from sharing my thoughts on this topic (I’m sure no one cares what I think about this anyway), but I thought it was timely to write a blog about sustainable investing. If you are concerned for the environment, this is a way of ‘putting your money where your mouth is’.

Sustainable investing grew by 35% between 2016 and 2018. It now accounts for over $70 trillion of assets globally.

What is sustainable investing?
Substantiable investing means that you only invest in companies that are combating climate change, are socially responsible and have good governance practices. In simple terms, its investing in businesses that are doing the right thing. And, maybe more importantly, not investing in the businesses that are doing the wrong thing.

Sustainable investing is often referred to as ESG investing. ESG stands for Environmental, Social and Governance:
§ Environmental relates mainly to climate change (greenhouse gas emissions) but also includes, resource depletion, waste disposal, pollution and deforestation.
§ Social relates to matters such as human rights, modern slavery, child labour, working conditions, and employee relations. It includes avoiding investing in companies that are involved in tobacco, adult entertainment, weapons, gambling and so on.
§ Governance relates to matters such as bribery and corruption, executive pay, board diversity and structure, political lobbying and donations, tax strategy.

The organisation Principals for Responsible Investment (PRI) was established in 2006 under auspices of United Nations to help its signatories (investment managers) better understand and effectively implement sustainable investing principals.

What impact can this have?
An ESG fund can have a massive impact by avoiding companies with high carbon dioxide (CO2) emissions, for example. There are two types of omissions to consider: (1) actual omissions and (2) potential omissions. Potential omissions mainly relate to mining companies. It is the reserve of raw materials (minerals or whatever they are mining) that they have identified that still is yet to be mined.

By eliminating high CO2 omitting companies, your portfolio can reduce actual omissions by over 70% globally (and over 60% in Australia). That is, an ESG portfolio omits over 70% less CO2 than its comparable index does (i.e. the whole market). And better still, it reduces potential omissions by over 99% (both globally and in Australia)!

An ESG portfolio means that you are not investing in companies that are doing the most harm to the environment.

Does ESG investing reduce diversification or increase investment risks?
A common concern is that if we filter out the companies that do not meet the EGS screens, does that mean we lack diversification or are under/over exposed to various sectors? The answer is no.

The table below compares the portfolio sector weightings (top 6 sectors only) for standard global investment fund versus an ESG product. As you can see, there are small differences, but the allocation has not been materially skewed away from or towards any sectors.


The standard global fund invests in 6,058 companies, so it’s ver

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> The bushfires in NSW and Queensland recently reinvigorated the conversation about global warming and whether the Australian government is doing enough to combat it. I’ll refrain from sharing my thoughts on this topic (I’m sure no one cares what I think about this anyway), but I thought it was timely to write a blog about sustainable investing. If you are concerned for the environment, this is a way of ‘putting your money where your mouth is’.

Sustainable investing grew by 35% between 2016 and 2018. It now accounts for over $70 trillion of assets globally.

What is sustainable investing?
Substantiable investing means that you only invest in companies that are combating climate change, are socially responsible and have good governance practices. In simple terms, its investing in businesses that are doing the right thing. And, maybe more importantly, not investing in the businesses that are doing the wrong thing.

Sustainable investing is often referred to as ESG investing. ESG stands for Environmental, Social and Governance:
§ Environmental relates mainly to climate change (greenhouse gas emissions) but also includes, resource depletion, waste disposal, pollution and deforestation.
§ Social relates to matters such as human rights, modern slavery, child labour, working conditions, and employee relations. It includes avoiding investing in companies that are involved in tobacco, adult entertainment, weapons, gambling and so on.
§ Governance relates to matters such as bribery and corruption, executive pay, board diversity and structure, political lobbying and donations, tax strategy.

The organisation Principals for Responsible Investment (PRI) was established in 2006 under auspices of United Nations to help its signatories (investment managers) better understand and effectively implement sustainable investing principals.

What impact can this have?
An ESG fund can have a massive impact by avoiding companies with high carbon dioxide (CO2) emissions, for example. There are two types of omissions to consider: (1) actual omissions and (2) potential omissions. Potential omissions mainly relate to mining companies. It is the reserve of raw materials (minerals or whatever they are mining) that they have identified that still is yet to be mined.

By eliminating high CO2 omitting companies, your portfolio can reduce actual omissions by over 70% globally (and over 60% in Australia). That is, an ESG portfolio omits over 70% less CO2 than its comparable index does (i.e. the whole market). And better still, it reduces potential omissions by over 99% (both globally and in Australia)!

An ESG portfolio means that you are not investing in companies that are doing the most harm to the environment.

Does ESG investing reduce diversification or increase investment risks?
A common concern is that if we filter out the companies that do not meet the EGS screens, does that mean we lack diversification or are under/over exposed to various sectors? The answer is no.

The table below compares the portfolio sector weightings (top 6 sectors only) for standard global investment fund versus an ESG product. As you can see, there are small differences, but the allocation has not been materially skewed away from or towards any sectors.


The standard global fund invests in 6,058 companies, so it’s ver

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Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

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This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 3882118b-8945-404c-973e-ce17f852a437 Wed, 04 Dec 2019 09:18:00 +1100 852 investopoly,wemyss,sustainable investing,ESG investing,financial advice,share market,shares,equities,stock market 1 93 false 2020 Vision: What investment risks and opportunities will next year bring? 2020 Vision: What investment risks and opportunities will next year bring? With the 2019 calendar year quickly drawing to a close, I thought it would be good to have a look at what next year might bring in terms of investment risks and opportunities.

Over the years, I found that its best to form opinions on the economy by reading analysis/insights and attending economic briefings, whilst being careful to not overindulge. Too many opinions and viewpoints can confuse and sometimes send you down a rabbit hole. This should be complimented with real-world observation such as taking notice of retail traffic conditions, anecdotal discussions with businesspeople and so on. This approach has served me pretty well over the past few decades.

The economy and the risk of recession
There has been a bit of press lately about the risk of Australia and other developed economies (including the US) slipping into a recession.

Australia is now in its 28th year of uninterrupted economic expansion – which is a world record for a developed economy. But all records must end someday. That said, population growth and raw-material (iron ore) exports have been big contributors to our economy over recent decades. I don’t see that changing anytime soon. However, some sectors of the economy have been really struggling. For example, retail trade has been flat in the year to September 2019. Retail weakness has mainly manifested in household goods (probably impacted by the property market slowdown) and department store sales (thanks to online competition). Wage inflation has also been low with the Wage Price Index recently coming in at 2.2%. Prior to early 2013, the index used to always be above 3% (and peaked at 4% just prior to the GFC). But this phenomenon isn’t unique to Australia – all developed economies around the world are struggling to generate wage inflation.

In terms of globally, the US deserves the most attention because it’s the largest developed economy by far. The Fed Reserve has been cutting rates to keep the economy growing. President Trump has called for more rate cuts (even negative rates) and for them to recommence quantitative easing. Lower rates in the US are expected to depreciate the US dollar which should add some more fuel for the economy.

On the whole, I think a recession in Australia or in the US is unlikely in 2020. Of course, both economies are getting closer to an economic slowdown as each month passes. Barring any unforeseen circumstances, I think these economies will keep ticking along albeit at a slower rate.

Interest rates
Interestingly, in a speech on Tuesday night (26/11/19), the Reserve Bank Governor suggested that it would prefer to cut rates two more times before implementing quantitative easing, which I was personally pleased to hear.

I normally defer to Westpac’s chief economist Bill Evens for interest rate forecasts, as I have found he’s been consistently the most accurate over the years. Bill is forecasting only one more rate cut which is predicted to occur in the first quarter of 2020. But the big question is how much will the banks pass on? I suspect that they will continue with what they have done the last few times i.e. pass on circa 0.15% of the cut onto most borrowers but the full 0.25% for interest only investment loans.

After the interest rate cutting has finished, it will then be up to the government to loosen fiscal policy and increase its spending to further stimulate growth. Thankfully, Australia’s low debt levels relative to other devel

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

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Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

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This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> With the 2019 calendar year quickly drawing to a close, I thought it would be good to have a look at what next year might bring in terms of investment risks and opportunities.

Over the years, I found that its best to form opinions on the economy by reading analysis/insights and attending economic briefings, whilst being careful to not overindulge. Too many opinions and viewpoints can confuse and sometimes send you down a rabbit hole. This should be complimented with real-world observation such as taking notice of retail traffic conditions, anecdotal discussions with businesspeople and so on. This approach has served me pretty well over the past few decades.

The economy and the risk of recession
There has been a bit of press lately about the risk of Australia and other developed economies (including the US) slipping into a recession.

Australia is now in its 28th year of uninterrupted economic expansion – which is a world record for a developed economy. But all records must end someday. That said, population growth and raw-material (iron ore) exports have been big contributors to our economy over recent decades. I don’t see that changing anytime soon. However, some sectors of the economy have been really struggling. For example, retail trade has been flat in the year to September 2019. Retail weakness has mainly manifested in household goods (probably impacted by the property market slowdown) and department store sales (thanks to online competition). Wage inflation has also been low with the Wage Price Index recently coming in at 2.2%. Prior to early 2013, the index used to always be above 3% (and peaked at 4% just prior to the GFC). But this phenomenon isn’t unique to Australia – all developed economies around the world are struggling to generate wage inflation.

In terms of globally, the US deserves the most attention because it’s the largest developed economy by far. The Fed Reserve has been cutting rates to keep the economy growing. President Trump has called for more rate cuts (even negative rates) and for them to recommence quantitative easing. Lower rates in the US are expected to depreciate the US dollar which should add some more fuel for the economy.

On the whole, I think a recession in Australia or in the US is unlikely in 2020. Of course, both economies are getting closer to an economic slowdown as each month passes. Barring any unforeseen circumstances, I think these economies will keep ticking along albeit at a slower rate.

Interest rates
Interestingly, in a speech on Tuesday night (26/11/19), the Reserve Bank Governor suggested that it would prefer to cut rates two more times before implementing quantitative easing, which I was personally pleased to hear.

I normally defer to Westpac’s chief economist Bill Evens for interest rate forecasts, as I have found he’s been consistently the most accurate over the years. Bill is forecasting only one more rate cut which is predicted to occur in the first quarter of 2020. But the big question is how much will the banks pass on? I suspect that they will continue with what they have done the last few times i.e. pass on circa 0.15% of the cut onto most borrowers but the full 0.25% for interest only investment loans.

After the interest rate cutting has finished, it will then be up to the government to loosen fiscal policy and increase its spending to further stimulate growth. Thankfully, Australia’s low debt levels relative to other devel

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 66f93971-efeb-4d92-9d44-7a5f018ef267 Thu, 28 Nov 2019 09:46:00 +1100 1009 investopoly,wemyss,investing,share market,property market,interest rates,REITs,financial advice, 1 92 false How to invest in Emerging Markets such as China and India How to invest in Emerging Markets such as China and India According to global bank Standard Chartered, the Chinese and Indian economies are expected to more than triple between 2017 and 2030. In fact, China’s Gross Domestic Product (a measure of a country’s economic output) is predicted to be more than double the USA. This is because the International Monetary Fund predicts that emerging economy growth rates will be nearly three times higher than developed economies. However, investing in emerging markets is not for the fainthearted.

Developed versus emerging markets

Stock markets are typically classified as either developed or emerging markets. Developed markets have a robust and reliable financial system. The country must be open to foreign ownership, ease of capital movement, and efficiency of market institutions. As such, the governments disclosure and regulatory regime is aimed at providing investors with reliable and trustworthy information. The largest developed economies include USA (accounts for 62.8% of all developed markets), Japan (8.4%), UK (5.5%), France (3.8%) and 19 other smaller countries including Australia.

However, emerging markets are less developed. Their financial systems do not have the same level of transparency, accountability and regulatory oversight. The largest emerging markets include China (33%), Korea (13%), Taiwan (11.4%) and India (9%) plus 22 additional countries.

Indexing doesn’t work as well

If you have been a reader of this blog for some time, you would be well aware by now that I’m a strong believer in passive (index) investing. Passive investing is low-cost, very diversified way of investing in a particular market or asset class. It only employs rules-based methodologies - meaning that you don’t pay for expensive fund managers and we can back-test results (i.e. work out what the results would have been if you employed the same rules-based approach over the past 20 years for example). There’s overwhelming evidence that confirms passive investing produces higher returns in the long run. For example, based on data prepared by S&P Dow Jones Indices, only 16% of active fund managers have beaten the Australian index (ASX200) and less than 11% have beaten the US index (S&P500) over the past 15 years. But this data is a bit deceptive, because its not the same fund managers for the whole period. In fact, any out-performance rarely persists for more than a couple of years – which means you need a crystal ball to work out which active fund manager to switch to every few years. This is a flawed strategy in my opinion – which is why rules-based, passive investing is superior.

However, when it comes to investing in emerging markets, indexing doesn’t always perform as well as it does in developed markets.

When investing in developed markets, many studies show that the key is to diversify your portfolio as much as possible. Of course, you should employ various value-based indexing strategies, particularly in this market. Lack of diversification is the number one cause of poor returns. So, a blanket-based approach works best.

However, when investing in emerging markets, the key is to avoid the poor-quality companies and over-valu

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> According to global bank Standard Chartered, the Chinese and Indian economies are expected to more than triple between 2017 and 2030. In fact, China’s Gross Domestic Product (a measure of a country’s economic output) is predicted to be more than double the USA. This is because the International Monetary Fund predicts that emerging economy growth rates will be nearly three times higher than developed economies. However, investing in emerging markets is not for the fainthearted.

Developed versus emerging markets

Stock markets are typically classified as either developed or emerging markets. Developed markets have a robust and reliable financial system. The country must be open to foreign ownership, ease of capital movement, and efficiency of market institutions. As such, the governments disclosure and regulatory regime is aimed at providing investors with reliable and trustworthy information. The largest developed economies include USA (accounts for 62.8% of all developed markets), Japan (8.4%), UK (5.5%), France (3.8%) and 19 other smaller countries including Australia.

However, emerging markets are less developed. Their financial systems do not have the same level of transparency, accountability and regulatory oversight. The largest emerging markets include China (33%), Korea (13%), Taiwan (11.4%) and India (9%) plus 22 additional countries.

Indexing doesn’t work as well

If you have been a reader of this blog for some time, you would be well aware by now that I’m a strong believer in passive (index) investing. Passive investing is low-cost, very diversified way of investing in a particular market or asset class. It only employs rules-based methodologies - meaning that you don’t pay for expensive fund managers and we can back-test results (i.e. work out what the results would have been if you employed the same rules-based approach over the past 20 years for example). There’s overwhelming evidence that confirms passive investing produces higher returns in the long run. For example, based on data prepared by S&P Dow Jones Indices, only 16% of active fund managers have beaten the Australian index (ASX200) and less than 11% have beaten the US index (S&P500) over the past 15 years. But this data is a bit deceptive, because its not the same fund managers for the whole period. In fact, any out-performance rarely persists for more than a couple of years – which means you need a crystal ball to work out which active fund manager to switch to every few years. This is a flawed strategy in my opinion – which is why rules-based, passive investing is superior.

However, when it comes to investing in emerging markets, indexing doesn’t always perform as well as it does in developed markets.

When investing in developed markets, many studies show that the key is to diversify your portfolio as much as possible. Of course, you should employ various value-based indexing strategies, particularly in this market. Lack of diversification is the number one cause of poor returns. So, a blanket-based approach works best.

However, when investing in emerging markets, the key is to avoid the poor-quality companies and over-valu

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss e514dede-8fdb-4fcd-af74-7528636bb81a Wed, 20 Nov 2019 17:00:00 +1100 974 investopoly,wemyss,emerging markets,share investing,index funds,passive investing,independent advice 1 91 false Not all information is useful information Not all information is useful information Not more than 7 months ago, according to the media, investing in property was no longer a smart way to build wealth. Labor wanted to ban negative gearing, increase Capital Gains Tax (CGT), commentators were predicting that the market would crash by more than 20%, banks were tightening lending standards and so on. Since then, the world has returned back to ‘normal’ and most of these concerns have abated. According to the media, property is now a good investment again.

But what if Labor had won?
Of course, Labor losing the federal election in May 2019 did help the property market because it meant any changes to negative gearing and CGT were off the table. However, if it had won the election, I doubt Labor would have been able to get these proposed changes legislated. And even if they did get them legislated, I stand by my view that whilst these changes would have materially reduced after-tax returns, it would not have rendered property investment uneconomical. In the long run, investing in the right property still would have been a viable investment.

Construction of new housing, recession, interest rates…
I was reading an article by an investment manager that I respect greatly a few weeks ago. His thesis was that it was too early to call a recovery on the property market because of the fall in construction volume (of new dwellings). He went on to explain that a depressed construction market will create negative consequences for economic growth, unemployment and therefore property.

Whilst I don’t disagree with this author’s economic reasoning, I was left pondering what use this information had to an investor. That is, if I’m contemplating an investment in a blue-chip, investment-grade location, do I care about the fall in new construction (which inevitably occurs in locations far removed from investment-grade locations)?

So, what information is relevant then?
In reality, much of the content produced by the media is relatively useless for making property investment decisions. The media tend to only run stories that they consider newsworthy. Newsworthy often means that the information is time-sensitive e.g. what happened yesterday or what will happen tomorrow. This short-term information does not help if you intend to own a property for many decades.

Remember what drives property values
A good and bad property cost the same to hold. You will pay the same amount of interest in respect to the mortgages. And the income and expenses will be relatively similar. The biggest difference between a good and bad property is capital growth. That is, what will the property be worth in 10, 20 or 30 years? In this regard, when selecting a property, there are three things you must consider:

1. Land value
Land appreciates whereas buildings depreciate. Therefore, it stands to reason that you should invest in properties that are mostly land value which typically includes houses and older-style apartments. Whereas, if you invest in a newly built property, it is likely most of the purchase price will represent building value and only a small land value component. The appreciation in land value needs to more than offset the depreciation in building value for the property’s overall value to increase. But this is unlikely if say, 80% of the value is building (and depreciating) and only 20% land (and appreciating).

2. Scarcity
The property must be scarce both in terms of location and property type.

A scarce location is one where there is a finite amount of vacant land (often no vacant land) plus the location is highly desirable to a broad spectrum of demographics (e.g. young people, families, retirees, etc.).

A scarce

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Not more than 7 months ago, according to the media, investing in property was no longer a smart way to build wealth. Labor wanted to ban negative gearing, increase Capital Gains Tax (CGT), commentators were predicting that the market would crash by more than 20%, banks were tightening lending standards and so on. Since then, the world has returned back to ‘normal’ and most of these concerns have abated. According to the media, property is now a good investment again.

But what if Labor had won?
Of course, Labor losing the federal election in May 2019 did help the property market because it meant any changes to negative gearing and CGT were off the table. However, if it had won the election, I doubt Labor would have been able to get these proposed changes legislated. And even if they did get them legislated, I stand by my view that whilst these changes would have materially reduced after-tax returns, it would not have rendered property investment uneconomical. In the long run, investing in the right property still would have been a viable investment.

Construction of new housing, recession, interest rates…
I was reading an article by an investment manager that I respect greatly a few weeks ago. His thesis was that it was too early to call a recovery on the property market because of the fall in construction volume (of new dwellings). He went on to explain that a depressed construction market will create negative consequences for economic growth, unemployment and therefore property.

Whilst I don’t disagree with this author’s economic reasoning, I was left pondering what use this information had to an investor. That is, if I’m contemplating an investment in a blue-chip, investment-grade location, do I care about the fall in new construction (which inevitably occurs in locations far removed from investment-grade locations)?

So, what information is relevant then?
In reality, much of the content produced by the media is relatively useless for making property investment decisions. The media tend to only run stories that they consider newsworthy. Newsworthy often means that the information is time-sensitive e.g. what happened yesterday or what will happen tomorrow. This short-term information does not help if you intend to own a property for many decades.

Remember what drives property values
A good and bad property cost the same to hold. You will pay the same amount of interest in respect to the mortgages. And the income and expenses will be relatively similar. The biggest difference between a good and bad property is capital growth. That is, what will the property be worth in 10, 20 or 30 years? In this regard, when selecting a property, there are three things you must consider:

1. Land value
Land appreciates whereas buildings depreciate. Therefore, it stands to reason that you should invest in properties that are mostly land value which typically includes houses and older-style apartments. Whereas, if you invest in a newly built property, it is likely most of the purchase price will represent building value and only a small land value component. The appreciation in land value needs to more than offset the depreciation in building value for the property’s overall value to increase. But this is unlikely if say, 80% of the value is building (and depreciating) and only 20% land (and appreciating).

2. Scarcity
The property must be scarce both in terms of location and property type.

A scarce location is one where there is a finite amount of vacant land (often no vacant land) plus the location is highly desirable to a broad spectrum of demographics (e.g. young people, families, retirees, etc.).

A scarce

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 1c410c97-4a9e-430a-8570-7ad629f7c07c Thu, 14 Nov 2019 01:00:00 +1100 985 wemyss,investopoly,rules of the lending game,property investing,independent advice,holistic advise, 1 90 false What are your options if your interest only term is expiring? What are your options if your interest only term is expiring? Most investors and some homeowners have interest only loans. However, the option to repay interest only doesn’t last forever. Most mortgages have a term of 30 years. Typically, the first 5 years is interest only. After that term has expired, repayments automatically convert to principal plus interest.

If you have an interest only loan that is approaching the maturity of its term, what are your options?

The government forced banks to curb interest only loans
The volume of interest only mortgages peaked in early 2017 when they accounted for approximately 40% of all new mortgages. The government (APRA) then stepped in and introduced a new benchmark which stipulated that the proportion of new interest only loans provided by banks must be less than 30% of all new loans. Most banks achieved this target by mid-2018 and currently only 20% of all new loans are structured with interest only repayments. As such, APRA subsequently removed this benchmark in December 2018.

The banks dissuaded borrowers away from interest only loans by doing four things:
1. They increased variable interest rates. Until recently, variable interest rates for interest only loans were 0.42% higher than their principal and interest counterparts. That gap has only recently reduced to 0.34% because most of the banks passed the full 0.25% October RBA rate cut. I predict that this cap will continue to reduce over time.
2. Banks made it more difficult to roll-over to a new interest only term by requiring borrowers to go through a full application process.
3. Almost all banks reduced the maximum interest only term to 5 years. Previously banks would offer interest only terms of up to 10 years – and a few banks even offered 15 years.
4. Lenders tightened credit parameters e.g. they have become very reluctant to allow interest only repayments for owner-occupier loans.

The banks are starting to loosen up on interest only
Over the past few months, we have noticed that some lenders have marginally loosened credit policies in respect to interest only loans. Some lenders no longer require borrowers to go through a full application process if they request a second interest only term. Also, some banks will now offer interest only terms of up to 10 years to investors only.

Do interest only loans still make sense?
Interest only loans increase your flexibility. Whilst the minimum payment is limited to just the interest, it does not mean that you are not allowed to make principal repayments. In fact, you can make principal repayments at any time. Better still, attach an offset account to your mortgage and your cash savings will reduce the interest cost too.

Investors are particularly attracted to interest only loans for two primary reasons. Firstly, if they have a (non-tax-deductible) home loan, they can direct all their cash flow towards repaying it first, before they repay any investment debt. Secondly, it reduces the monthly cash flow cost of their investment. This means that have more cash to invest in other assets (or service higher levels of borrowings).

The additional benefit of an interest only loan is that your monthly repayment amount is directly linked to your net balance. Therefore, if you have repaid a portion of your loan principal or have monies in offset, your repayment will reduce accordingly. However, the dollar value of principal and interest loan repayments are fixed as they are calculated using the loan amount, not the actual balance. Most people prefer the flexibility that interest only loans provide.

So, are you suggesting that we never repay an investment loan?

No, not necessarily. Of course, you must consider debt repayment/management when formu

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Most investors and some homeowners have interest only loans. However, the option to repay interest only doesn’t last forever. Most mortgages have a term of 30 years. Typically, the first 5 years is interest only. After that term has expired, repayments automatically convert to principal plus interest.

If you have an interest only loan that is approaching the maturity of its term, what are your options?

The government forced banks to curb interest only loans
The volume of interest only mortgages peaked in early 2017 when they accounted for approximately 40% of all new mortgages. The government (APRA) then stepped in and introduced a new benchmark which stipulated that the proportion of new interest only loans provided by banks must be less than 30% of all new loans. Most banks achieved this target by mid-2018 and currently only 20% of all new loans are structured with interest only repayments. As such, APRA subsequently removed this benchmark in December 2018.

The banks dissuaded borrowers away from interest only loans by doing four things:
1. They increased variable interest rates. Until recently, variable interest rates for interest only loans were 0.42% higher than their principal and interest counterparts. That gap has only recently reduced to 0.34% because most of the banks passed the full 0.25% October RBA rate cut. I predict that this cap will continue to reduce over time.
2. Banks made it more difficult to roll-over to a new interest only term by requiring borrowers to go through a full application process.
3. Almost all banks reduced the maximum interest only term to 5 years. Previously banks would offer interest only terms of up to 10 years – and a few banks even offered 15 years.
4. Lenders tightened credit parameters e.g. they have become very reluctant to allow interest only repayments for owner-occupier loans.

The banks are starting to loosen up on interest only
Over the past few months, we have noticed that some lenders have marginally loosened credit policies in respect to interest only loans. Some lenders no longer require borrowers to go through a full application process if they request a second interest only term. Also, some banks will now offer interest only terms of up to 10 years to investors only.

Do interest only loans still make sense?
Interest only loans increase your flexibility. Whilst the minimum payment is limited to just the interest, it does not mean that you are not allowed to make principal repayments. In fact, you can make principal repayments at any time. Better still, attach an offset account to your mortgage and your cash savings will reduce the interest cost too.

Investors are particularly attracted to interest only loans for two primary reasons. Firstly, if they have a (non-tax-deductible) home loan, they can direct all their cash flow towards repaying it first, before they repay any investment debt. Secondly, it reduces the monthly cash flow cost of their investment. This means that have more cash to invest in other assets (or service higher levels of borrowings).

The additional benefit of an interest only loan is that your monthly repayment amount is directly linked to your net balance. Therefore, if you have repaid a portion of your loan principal or have monies in offset, your repayment will reduce accordingly. However, the dollar value of principal and interest loan repayments are fixed as they are calculated using the loan amount, not the actual balance. Most people prefer the flexibility that interest only loans provide.

So, are you suggesting that we never repay an investment loan?

No, not necessarily. Of course, you must consider debt repayment/management when formu

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

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Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 92a1b0b5-6e41-4f4e-bfb9-496300a8aac5 Wed, 23 Oct 2019 09:00:00 +1100 809 investopoly,wemyss,interest only,mortgages,property investing,property investment 1 89 false Global recession. US/China trade war. Brexit. Low interest rates... What to do? Global recession. US/China trade war. Brexit. Low interest rates... What to do? It feels like there is more global uncertainty at the moment. Things such as a global or domestic economic recession, US/China trade war tensions, Brexit, Trump’s rhetoric, the prospect of zero (or negative) interest rates, what property prices might do here, all seem to dominate the news. You may find these matters confusing and they can create inertia.

So, how do you navigate these seemingly turbulent times?

Consider issues in a long-term context
Last week, the Australian share market fell 3.7% between Tuesday and Thursday. These types of dramatic movements attract alarmist headlines. The reality is that despite this drop, the market is still up 10.1% over the past 12 months, which is much better than other developed markets.

The volatility (VIX) index is the most common measure for the level of volatility in the US market and is charted below for the past 20 years. The VIX index averaged only 13.2 throughout calendar years 2016 and 2017, which is well below the long-term mean of 18.3. Since the beginning of 2018, the VIX has averaged 16.6, which is 25% higher than 2016 and 2017, but still below the long-term mean.


Perhaps this puts recent share market volatility in context. Whilst the market is more volatile than it has been in recent times, in context of longer-term data, it is actually not all that volatile. For example, there was almost twice as much volatility between 2008 and 2011.

I share this with you to make the point that it is important to focus on the data and facts rather than how markets feel.

Most of these issues are short term
The best way to deal with these often-exaggerated topics (as listed in the headline) that the media, in particular, love to talk about is to ask yourself whether these are likely to have had an impact 20 years from now. Mostly, the answer is no. Many of these “issues” are short-term in nature and really won’t have any impact on long term investment returns.

Markets and economies move in cycles, so recessions aren’t a new phenomenon for long-term investors. Government trade terms and strategies change, but markets and business always adapt. Perhaps the only factor that might have an impact in the long run is interest rates, particularly if they are lower for longer. But that impact is likely to be positive for astute investors.

In short, what I am saying is; “play the long game”. Focus on long term outcomes. If you do that, you don’t need to worry about getting distracted by all the short-term noise and as such, it is less likely you will make a decision that you may regret in the future (or regret not making any decisions).

Short term thinking creates unnecessary and unhelpful anxiety. You end up focusing on whatever dominates the news – there is always something to worry about. To avoid this ask yourself, what can you do today that is likely to strengthen your financial position 20 years from now. Forget about what might happen over the next 20 days or 20 months.

Focus on quality, methodology and valuation
If you are investing in shares, you must focus on ensuring you adopt the correct methodology and skew your investments away from over-priced markets. If you are investing in property, focus all your energy on quality only. Doing this is the best way to ensure your investments are strong enough to weather any storms that might be coming our way. I explain these two factors below:
§ Quality and methodology – ensure you have a s

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> It feels like there is more global uncertainty at the moment. Things such as a global or domestic economic recession, US/China trade war tensions, Brexit, Trump’s rhetoric, the prospect of zero (or negative) interest rates, what property prices might do here, all seem to dominate the news. You may find these matters confusing and they can create inertia.

So, how do you navigate these seemingly turbulent times?

Consider issues in a long-term context
Last week, the Australian share market fell 3.7% between Tuesday and Thursday. These types of dramatic movements attract alarmist headlines. The reality is that despite this drop, the market is still up 10.1% over the past 12 months, which is much better than other developed markets.

The volatility (VIX) index is the most common measure for the level of volatility in the US market and is charted below for the past 20 years. The VIX index averaged only 13.2 throughout calendar years 2016 and 2017, which is well below the long-term mean of 18.3. Since the beginning of 2018, the VIX has averaged 16.6, which is 25% higher than 2016 and 2017, but still below the long-term mean.


Perhaps this puts recent share market volatility in context. Whilst the market is more volatile than it has been in recent times, in context of longer-term data, it is actually not all that volatile. For example, there was almost twice as much volatility between 2008 and 2011.

I share this with you to make the point that it is important to focus on the data and facts rather than how markets feel.

Most of these issues are short term
The best way to deal with these often-exaggerated topics (as listed in the headline) that the media, in particular, love to talk about is to ask yourself whether these are likely to have had an impact 20 years from now. Mostly, the answer is no. Many of these “issues” are short-term in nature and really won’t have any impact on long term investment returns.

Markets and economies move in cycles, so recessions aren’t a new phenomenon for long-term investors. Government trade terms and strategies change, but markets and business always adapt. Perhaps the only factor that might have an impact in the long run is interest rates, particularly if they are lower for longer. But that impact is likely to be positive for astute investors.

In short, what I am saying is; “play the long game”. Focus on long term outcomes. If you do that, you don’t need to worry about getting distracted by all the short-term noise and as such, it is less likely you will make a decision that you may regret in the future (or regret not making any decisions).

Short term thinking creates unnecessary and unhelpful anxiety. You end up focusing on whatever dominates the news – there is always something to worry about. To avoid this ask yourself, what can you do today that is likely to strengthen your financial position 20 years from now. Forget about what might happen over the next 20 days or 20 months.

Focus on quality, methodology and valuation
If you are investing in shares, you must focus on ensuring you adopt the correct methodology and skew your investments away from over-priced markets. If you are investing in property, focus all your energy on quality only. Doing this is the best way to ensure your investments are strong enough to weather any storms that might be coming our way. I explain these two factors below:
§ Quality and methodology – ensure you have a s

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 87d1cb81-504f-429c-8921-00765b9eb01a Wed, 09 Oct 2019 14:00:00 +1100 1088 Investopoly,wemyss,share investing,independent advice,brexit,trade war,Interest rates,recession, 1 88 false The best way to help kids get into the property market The best way to help kids get into the property market According to the Australian Bureau of Statistics, first homeowner activity has increased by 51% since March 2016. First home buyers now account for just short of 20% of all new home loans.

Whilst housing affordability has improved slightly recently, it is still tough for first home buyers to get onto the property ladder. However, the current low interest rate environment and the recent dip in prices is clearly encouraging more first home buyers.

So, what is the best way to help your kids get into the property market? And is there anything you need to do now?

Challenge has and will always be saving a sufficient deposit
There are two factors that will determine whether a person is ready to purchase their first property:

(1) Cash flow
Do they have a stable and reliable amount of surplus cash flow that they can contribute towards repaying a loan? There are usually two main considerations. Firstly, how stable and consistent their income is expected to be in the short to medium term? This normally requires permanent full-time employment or an established self-employed business. Secondly, do they have good cash flow management and consistently spend less than they earn i.e. are they good savers?

(2) Deposit
Do they have enough deposit to contribute towards the acquisition? Most banks will lend up to 95% of a property’s value. Therefore, first home buyers need to contribute:
(1) a 5% deposit;
(2) pay for the mortgage insurance premium. This is an expense that is charged by the bank if you borrow more than 80-85% of a property’s value. The cost of mortgage insurance is typically in the range of 3% and 4% of the loan amount (at a 95% LVR). A few lenders permit borrowers to add a portion (up to 2%) of the mortgage insurance premium onto the loan. The rest must be paid from cash savings; and
(3) any acquisition costs which could include stamp duty (which may be nil depending on the first home buyer incentive), buyers’ agent fees if you choose to use one and legal fees.

Therefore, typically, first time buyers need to accumulate a sizeable deposit, and this can unfortunately take many years to save (over which time property prices will probably continue to climb).

Having enough deposit is often the primary hurdle to overcome for first time property buyers.

Best way to help is to help yourself first
Often my clients request that their financial plan include the goal that they would like to help their kids buy a property. Sometimes clients think that buying one property per child (for example) now is a good idea. There are a few flaws with this approach, including:
§ The best way to help your children is to help yourself first. Build your own asset base. If you have a very strong asset base in the future, you will have the latitude to help your children in lots of ways. However, if you don’t have a strong asset base, you risk being in a situation where you are relying on your kids for help, not the other way around.
§ Buying assets now, ultimately for your children’s use, has many challenges. Firstly, if you eventually gift or sell the property to your child you will have to pay stamp duty and capital gains tax. Secondly, how do you know what property type and location will best suit your children in the future?
§ You may want to help your children in different ways and at different times. Some young adults can be very astute with money from a very young age. However, others can take many years to learn basic cash flow management. Forcing a person into property ownership before they are ready won’t produce positive outcomes.

Start with teaching good cash flow management
We all know t

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> According to the Australian Bureau of Statistics, first homeowner activity has increased by 51% since March 2016. First home buyers now account for just short of 20% of all new home loans.

Whilst housing affordability has improved slightly recently, it is still tough for first home buyers to get onto the property ladder. However, the current low interest rate environment and the recent dip in prices is clearly encouraging more first home buyers.

So, what is the best way to help your kids get into the property market? And is there anything you need to do now?

Challenge has and will always be saving a sufficient deposit
There are two factors that will determine whether a person is ready to purchase their first property:

(1) Cash flow
Do they have a stable and reliable amount of surplus cash flow that they can contribute towards repaying a loan? There are usually two main considerations. Firstly, how stable and consistent their income is expected to be in the short to medium term? This normally requires permanent full-time employment or an established self-employed business. Secondly, do they have good cash flow management and consistently spend less than they earn i.e. are they good savers?

(2) Deposit
Do they have enough deposit to contribute towards the acquisition? Most banks will lend up to 95% of a property’s value. Therefore, first home buyers need to contribute:
(1) a 5% deposit;
(2) pay for the mortgage insurance premium. This is an expense that is charged by the bank if you borrow more than 80-85% of a property’s value. The cost of mortgage insurance is typically in the range of 3% and 4% of the loan amount (at a 95% LVR). A few lenders permit borrowers to add a portion (up to 2%) of the mortgage insurance premium onto the loan. The rest must be paid from cash savings; and
(3) any acquisition costs which could include stamp duty (which may be nil depending on the first home buyer incentive), buyers’ agent fees if you choose to use one and legal fees.

Therefore, typically, first time buyers need to accumulate a sizeable deposit, and this can unfortunately take many years to save (over which time property prices will probably continue to climb).

Having enough deposit is often the primary hurdle to overcome for first time property buyers.

Best way to help is to help yourself first
Often my clients request that their financial plan include the goal that they would like to help their kids buy a property. Sometimes clients think that buying one property per child (for example) now is a good idea. There are a few flaws with this approach, including:
§ The best way to help your children is to help yourself first. Build your own asset base. If you have a very strong asset base in the future, you will have the latitude to help your children in lots of ways. However, if you don’t have a strong asset base, you risk being in a situation where you are relying on your kids for help, not the other way around.
§ Buying assets now, ultimately for your children’s use, has many challenges. Firstly, if you eventually gift or sell the property to your child you will have to pay stamp duty and capital gains tax. Secondly, how do you know what property type and location will best suit your children in the future?
§ You may want to help your children in different ways and at different times. Some young adults can be very astute with money from a very young age. However, others can take many years to learn basic cash flow management. Forcing a person into property ownership before they are ready won’t produce positive outcomes.

Start with teaching good cash flow management
We all know t

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 612ec1b1-2557-48c1-a975-8ae32929cc18 Wed, 02 Oct 2019 10:07:00 +1000 1238 investopoly,wemyss,rules of the lending game,family guarantee,property investing,property 1 87 false Does you partner understand your finances? Does you partner understand your finances? In my experience, it is common for one spouse to have a greater interest in the family’s finances. In fact, the spouse that is ‘most interested’ typically takes fully responsibility for making the family’s financial decisions. However, there are some fundamental and important flaws with this approach which I’d like to share with you.

What happens if one spouse unexpectantly passes away?
If the spouse that is the ‘financial decision-maker” passes away, particularly if it’s unexpected, it does cause the surviving spouse a lot of stress and worry. Not only do they (probably) have little knowledge of their financial affairs, but they also typically have a low level of confidence and experience with making financial decisions. This all compounds to create a lot of stress and worry, at the worst possible time.

To avoid this occurrence, each spouse must understand their financial position and strategy, even if its only at a basic level. They also must know who to seek advice from and who to trust, so they are able to share the burden of making ongoing financial decisions.

If the relationship breaks down beware of skeletons
There have been some horrible situations of spouses finding out about how dire their family’s financial situation is after their relationship has broken down. This includes massive tax debts, liabilities and so on. Of course, a strong relationship is founded on mutual trust and respect which includes discussing and disclosing all material financial decisions with your spouse before any transactions are made. Unfortunately, this does not always occur.

One spouse, often men, may feel a strong sense of responsibility to “provide” for their family. Sometimes, this responsibility can unfortunately drive them to make unsound and inappropriate financial decisions. And to compound this, they might avoid discussing these decisions with their spouse, so they don’t ‘burden’ them.

Of course, this is a foolish approach. That said, I believe it is the responsibility of each spouse to ask questions and seek to understand their own financial position. Nothing is too complex to explain in simple, easy-to-understand terms. It is something you can share together.

It’s your money, so it’s your responsibility
There is one thing you cannot delegate and that is the obligation to take responsibility for your money. It is your money and its your job to be responsible for it, not anyone else’s. That is not to say that you cannot trust anyone else or take their advice. But you must make sure that know what’s going on i.e. where its invested, what risk you are taking, how much you spend and so on.

If you don’t take responsibility and you end up losing money one day, you only have one person to blame.

Therefore, be engaged in the topic of money. Ask questions. You don’t need to have to understand the nitty-gritty or feign competency, but you must take responsibility. If you have a financial advisor, attend at least one meeting every couple of years. If you don’t have a financial advisor, ask your spouse to explain what’s going on and what your family’s financial plans involve.

You have to be on the same page
One of the important advantages of ensuring that both partners are engaged in understanding their finances is that you will be more likely to stick to the plan.

For example, if your financial plan requires you to contribute say $20,000 per year into a share portfolio, and both spouses understand why this is important to maintain, then it is likely that you will hold each-other accountable for achieving it. However, if one spouse doesn’t understand the strategy and therefore the importance of sticking to the $20,000 budget, then i

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> In my experience, it is common for one spouse to have a greater interest in the family’s finances. In fact, the spouse that is ‘most interested’ typically takes fully responsibility for making the family’s financial decisions. However, there are some fundamental and important flaws with this approach which I’d like to share with you.

What happens if one spouse unexpectantly passes away?
If the spouse that is the ‘financial decision-maker” passes away, particularly if it’s unexpected, it does cause the surviving spouse a lot of stress and worry. Not only do they (probably) have little knowledge of their financial affairs, but they also typically have a low level of confidence and experience with making financial decisions. This all compounds to create a lot of stress and worry, at the worst possible time.

To avoid this occurrence, each spouse must understand their financial position and strategy, even if its only at a basic level. They also must know who to seek advice from and who to trust, so they are able to share the burden of making ongoing financial decisions.

If the relationship breaks down beware of skeletons
There have been some horrible situations of spouses finding out about how dire their family’s financial situation is after their relationship has broken down. This includes massive tax debts, liabilities and so on. Of course, a strong relationship is founded on mutual trust and respect which includes discussing and disclosing all material financial decisions with your spouse before any transactions are made. Unfortunately, this does not always occur.

One spouse, often men, may feel a strong sense of responsibility to “provide” for their family. Sometimes, this responsibility can unfortunately drive them to make unsound and inappropriate financial decisions. And to compound this, they might avoid discussing these decisions with their spouse, so they don’t ‘burden’ them.

Of course, this is a foolish approach. That said, I believe it is the responsibility of each spouse to ask questions and seek to understand their own financial position. Nothing is too complex to explain in simple, easy-to-understand terms. It is something you can share together.

It’s your money, so it’s your responsibility
There is one thing you cannot delegate and that is the obligation to take responsibility for your money. It is your money and its your job to be responsible for it, not anyone else’s. That is not to say that you cannot trust anyone else or take their advice. But you must make sure that know what’s going on i.e. where its invested, what risk you are taking, how much you spend and so on.

If you don’t take responsibility and you end up losing money one day, you only have one person to blame.

Therefore, be engaged in the topic of money. Ask questions. You don’t need to have to understand the nitty-gritty or feign competency, but you must take responsibility. If you have a financial advisor, attend at least one meeting every couple of years. If you don’t have a financial advisor, ask your spouse to explain what’s going on and what your family’s financial plans involve.

You have to be on the same page
One of the important advantages of ensuring that both partners are engaged in understanding their finances is that you will be more likely to stick to the plan.

For example, if your financial plan requires you to contribute say $20,000 per year into a share portfolio, and both spouses understand why this is important to maintain, then it is likely that you will hold each-other accountable for achieving it. However, if one spouse doesn’t understand the strategy and therefore the importance of sticking to the $20,000 budget, then i

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 33ccae53-5821-4342-827c-b54a88ee3a59 Thu, 26 Sep 2019 08:00:00 +1000 774 investopoly,wemyss,financial planning,financial advice,investing,wills, 1 86 false Property Market Prediction: what will the market do from here? Property Market Prediction: what will the market do from here? The media loves to talk about the property market; will prices rise or fall over the next year? It’s really not that important. “Timing” the market is virtually valueless, as I concluded in this analysis last year. That said, I understand the psychology behind it. People want to buy at the bottom of the market, just before it takes off and only experience the upside.

There has been a lot of commentary recently about improvements in auction clearance rates, uptick in lending volume in July and so on. So, I thought I’d weigh into the commentary and share my views.

Looks like I called the bottom correctly
Let me begin this blog with some shameless self-promotion! In December 2018, I wrote a piece for The Australian in which I said “I believe that price growth next year will be neutral or positive”. At the time, I was only one of two people in Australia to make this public prediction (AMP Capital’s chief economist, Shane Oliver was the other).

As the chart provided by CoreLogic below illustrates, national auction clearance rates reached their lowest point in December 2018 at around 40%. Over the past nine months they recovered dramatically to be circa 70% (and mid-to high 70%’s in Melbourne and Sydney).


According to CoreLogic, national capital city house prices grew by 1% in the quarter ending August 2019, with Melbourne and Sydney leading the way at close to 2%. Therefore, it looks like the bottom of the market was in fact December 2018 when I wrote my article.

All happening with very low volumes
Property market sentiment began improving after 10pm on 18 May when the Coalition won the election. We definitely witnessed a temporary improvement in our business in terms of enquiry levels from both investors and homeowners.

This is also evident in the chart below which begins on 11 May, the week before the federal election. It sets out Melbourne’s auction clearance rate and the volume of property sold in dollar terms (data from Domain). I have selected Melbourne as auctions are more commonplace compared to other capital cities (so data is more representative).

Please take note of the very low volumes. Up until mid-July only $175 million of property was being sold each weekend, on average. It has increased to $350 million over the past two weeks. But this is still well below the peak of a booming spring market in which over $1 billion of property would sell over one weekend in Melbourne.


Property market activity (volume) is well down both in terms of the number of properties selling but even more so in dollar terms, which suggests the higher end of the market is very thin. Therefore, whilst an improvement in clearance rates is a positive signal, we need more vendors to put their properties on the market. Until that happens, it’s difficult to ascertain what is driving clearance rates higher. Is it very low volumes or an actual improvement in sentiment? I suspect both are relatively equal contributors at the m

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> The media loves to talk about the property market; will prices rise or fall over the next year? It’s really not that important. “Timing” the market is virtually valueless, as I concluded in this analysis last year. That said, I understand the psychology behind it. People want to buy at the bottom of the market, just before it takes off and only experience the upside.

There has been a lot of commentary recently about improvements in auction clearance rates, uptick in lending volume in July and so on. So, I thought I’d weigh into the commentary and share my views.

Looks like I called the bottom correctly
Let me begin this blog with some shameless self-promotion! In December 2018, I wrote a piece for The Australian in which I said “I believe that price growth next year will be neutral or positive”. At the time, I was only one of two people in Australia to make this public prediction (AMP Capital’s chief economist, Shane Oliver was the other).

As the chart provided by CoreLogic below illustrates, national auction clearance rates reached their lowest point in December 2018 at around 40%. Over the past nine months they recovered dramatically to be circa 70% (and mid-to high 70%’s in Melbourne and Sydney).


According to CoreLogic, national capital city house prices grew by 1% in the quarter ending August 2019, with Melbourne and Sydney leading the way at close to 2%. Therefore, it looks like the bottom of the market was in fact December 2018 when I wrote my article.

All happening with very low volumes
Property market sentiment began improving after 10pm on 18 May when the Coalition won the election. We definitely witnessed a temporary improvement in our business in terms of enquiry levels from both investors and homeowners.

This is also evident in the chart below which begins on 11 May, the week before the federal election. It sets out Melbourne’s auction clearance rate and the volume of property sold in dollar terms (data from Domain). I have selected Melbourne as auctions are more commonplace compared to other capital cities (so data is more representative).

Please take note of the very low volumes. Up until mid-July only $175 million of property was being sold each weekend, on average. It has increased to $350 million over the past two weeks. But this is still well below the peak of a booming spring market in which over $1 billion of property would sell over one weekend in Melbourne.


Property market activity (volume) is well down both in terms of the number of properties selling but even more so in dollar terms, which suggests the higher end of the market is very thin. Therefore, whilst an improvement in clearance rates is a positive signal, we need more vendors to put their properties on the market. Until that happens, it’s difficult to ascertain what is driving clearance rates higher. Is it very low volumes or an actual improvement in sentiment? I suspect both are relatively equal contributors at the m

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 0e0ff680-c2e3-4b1b-a1ef-8366e7d777f1 Thu, 19 Sep 2019 09:00:00 +1000 894 investopoly,Wemyss,property market,property values,property investing,financial advice,invest property,property, 1 85 false Investing in shares 101: A beginner's guide Investing in shares 101: A beginner's guide Many people feel investing in the share market is a complex and scary concept. This is often due to a lack of understanding.

I have written a number of blogs about the advantages of index investing. However, I thought it might be useful to take a step back and take a look at the basics of share market investing.

How does the stock market work?
The share market is merely a place where people come to buy and sell shares. Some people will be buyers, and some will be sellers. They will each bid what price they are willing to buy or sell a particular stock. A deal will be done when they meet in the middle and agree on price. This is all done electronically (although, in Australia, prior to 1990, it was done on chalk boards).

You can see an example of this in the screen-print below (for CBA). As you can see, there are 9 people that would like to buy 455 shares in CBA shares for a price of $79.77. There are also 16 people that are prepared to sell 519 shares for $79.79. Seconds after taking this screen shot, the shares traded or $79.78 (i.e. the mid-point). These transactions happen all the time and this is how shares are valued by the market.

By the way, this is called market depth. That is, the number of buyers and sellers (and number of units) interested in trading a particular stock. It is important to invest in a stock with good depth to ensure your investment is liquid and fairly priced. More on this soon.

What is a company worth?
Obviously, the ‘market’ determines the value of a stock. As stated above, the market is made up of many buyers and sellers (most of them professionals).

There is a concept in financial theory called the Efficient Market Hypothesis (EFH) which states that the price of a stock reflects all available information about that stock and therefore is an accurate indication of its intrinsic value. Whilst this theory has some merit, I believe that EFM is truer in the long run than it is in the short run. In the short run, popularity can drive stock prices, not fundamentals.

Fundamentally, the value of a company is simply the present value of its future cash flows (i.e. profit). That is, what is the total value of say the next 10 years of profit after applying a discount rate (which is like an interest rate) to account for the businesses risk.

So, the key factor that investors must focus on is cash flow (profitability). There are only two reason why someone might invest in a business that makes low to no profit. Firstly, they invest in the stock on the expectation that the company’s business model is so compelling that it will generate strong profits in the future. Or, secondly, they are speculating that the stock price will continue to rise (this approach is more like gambling).

What are some of the key terms and when to use them?
I have listed below some of the key financial measures and terminology that are important to be familiar with if you want to invest in shares. Of course, there are lots of measures to look at, and they might vary between industries, so this isn’t an exhaustive list.
Earnings per share (EPS)
This is the amount of profit after tax that a company makes divided by the number of shares on issue. It is good if a company’s EPS is consistent (low volatility) and exhibits a good historic growth rate.
PE ratio
PE ratio stands for price-earnings ratio. This is calculated by dividing a stock’s price by its EPS. This tells you whether the stock is valued conservatively or aggressively. The long-term average PE in the Australian market is circa 15. Most of the top 200 stocks have a P

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Many people feel investing in the share market is a complex and scary concept. This is often due to a lack of understanding.

I have written a number of blogs about the advantages of index investing. However, I thought it might be useful to take a step back and take a look at the basics of share market investing.

How does the stock market work?
The share market is merely a place where people come to buy and sell shares. Some people will be buyers, and some will be sellers. They will each bid what price they are willing to buy or sell a particular stock. A deal will be done when they meet in the middle and agree on price. This is all done electronically (although, in Australia, prior to 1990, it was done on chalk boards).

You can see an example of this in the screen-print below (for CBA). As you can see, there are 9 people that would like to buy 455 shares in CBA shares for a price of $79.77. There are also 16 people that are prepared to sell 519 shares for $79.79. Seconds after taking this screen shot, the shares traded or $79.78 (i.e. the mid-point). These transactions happen all the time and this is how shares are valued by the market.

By the way, this is called market depth. That is, the number of buyers and sellers (and number of units) interested in trading a particular stock. It is important to invest in a stock with good depth to ensure your investment is liquid and fairly priced. More on this soon.

What is a company worth?
Obviously, the ‘market’ determines the value of a stock. As stated above, the market is made up of many buyers and sellers (most of them professionals).

There is a concept in financial theory called the Efficient Market Hypothesis (EFH) which states that the price of a stock reflects all available information about that stock and therefore is an accurate indication of its intrinsic value. Whilst this theory has some merit, I believe that EFM is truer in the long run than it is in the short run. In the short run, popularity can drive stock prices, not fundamentals.

Fundamentally, the value of a company is simply the present value of its future cash flows (i.e. profit). That is, what is the total value of say the next 10 years of profit after applying a discount rate (which is like an interest rate) to account for the businesses risk.

So, the key factor that investors must focus on is cash flow (profitability). There are only two reason why someone might invest in a business that makes low to no profit. Firstly, they invest in the stock on the expectation that the company’s business model is so compelling that it will generate strong profits in the future. Or, secondly, they are speculating that the stock price will continue to rise (this approach is more like gambling).

What are some of the key terms and when to use them?
I have listed below some of the key financial measures and terminology that are important to be familiar with if you want to invest in shares. Of course, there are lots of measures to look at, and they might vary between industries, so this isn’t an exhaustive list.
Earnings per share (EPS)
This is the amount of profit after tax that a company makes divided by the number of shares on issue. It is good if a company’s EPS is consistent (low volatility) and exhibits a good historic growth rate.
PE ratio
PE ratio stands for price-earnings ratio. This is calculated by dividing a stock’s price by its EPS. This tells you whether the stock is valued conservatively or aggressively. The long-term average PE in the Australian market is circa 15. Most of the top 200 stocks have a P

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 71fd1d01-480c-4155-9a98-c638a69ee4ba Wed, 11 Sep 2019 10:58:00 +1000 1321 investopoly,wemyss,shares,share market,investing in shares,index funds,direct shares,ASX200 1 84 false How should your split your wealth between shares and property? How should your split your wealth between shares and property? Australian’s have a well-documented love affair with property. Many people pursue the “great Australian dream” of owning their own home and over 2.1 million taxpayers invest in property. Most Australian’s also invest in the share market too, via their superannuation.

However, one of the decisions that many people struggle with is whether to invest in property, shares or both. And if the answer is to invest in both, how much do you invest in each and is it wise to do one before the other?

Like with many things in life, moderation is the key
All things being equal, diversification is typically the wisest approach. Spreading your money across various asset classes helps you reduce your investment risks. Property and share investment returns are not correlated, so by investing both, hopefully the ‘good’ years in property will randomly offset the ‘bad’ years in shares (and vice-versa). That is less important in the long run, but in the short run, diversification smooths investment returns, which makes the road less bumpy and less stressful.

Don’t invest if you are uncomfortable
Whilst you should always aim to never let your emotions guide financial decisions (as discussed here), sometimes people are very uncomfortable with investing in either property or shares.

I believe that you should never invest in anything unless you are 100% comfortable. Therefore, if your risk tolerance drives you to invest in one asset class only (i.e. property or shares), then that is okay as long as you use the correct investment methodologies. At the end of the day, the quality of your investments is more important than your level of diversification, especially in the long run.

You probably don’t need to invest in more than two investment-grade properties
Some businesses and articles online promote the benefits of acquiring a large property portfolio. Whilst this might be realistic for some, it’s completely unnecessary for most people. Of all the financial plans that I formulate, I rarely recommend my clients invest in more than three properties. In fact, most plans involve investing in one or two.

There are two reason for this. Firstly, quality trumps quantity every day of the week! It is much better to put all your money in one high-quality property than spread your monies across several “average” quality properties.

Secondly, limiting the amount you invest in property leaves room for you to invest in other assets such as shares, thereby achieving better diversification. However, if you max-out your borrowings (through investing in property), you will probably find that you do not have any capacity to invest in other asset classes.

Beware of anyone that suggests you can and should invest in lots of properties. Your ego must not determine your investment strategy. That is often difficult to do without having to make significant and ultimately costly compromises on the quality of the properties you invest in (unless you have a significant income).

Most pros and cons balance themselves out at a portfolio level
The shares versus property debate has raged on for many years. People in each camp will highlight the pros and cons in each. For example, shares are more liquid, you can invest in shares in smaller amounts, you don’t have to worry about dodgy tenants and so forth. Whereas, for property, people are attracted to the tangible nature of the asset and you can borrow more (at lower rates) to invest in property. These are just some of the pros and cons that are often mentioned.

Most of the pros and cons regularly mentioned are t

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Australian’s have a well-documented love affair with property. Many people pursue the “great Australian dream” of owning their own home and over 2.1 million taxpayers invest in property. Most Australian’s also invest in the share market too, via their superannuation.

However, one of the decisions that many people struggle with is whether to invest in property, shares or both. And if the answer is to invest in both, how much do you invest in each and is it wise to do one before the other?

Like with many things in life, moderation is the key
All things being equal, diversification is typically the wisest approach. Spreading your money across various asset classes helps you reduce your investment risks. Property and share investment returns are not correlated, so by investing both, hopefully the ‘good’ years in property will randomly offset the ‘bad’ years in shares (and vice-versa). That is less important in the long run, but in the short run, diversification smooths investment returns, which makes the road less bumpy and less stressful.

Don’t invest if you are uncomfortable
Whilst you should always aim to never let your emotions guide financial decisions (as discussed here), sometimes people are very uncomfortable with investing in either property or shares.

I believe that you should never invest in anything unless you are 100% comfortable. Therefore, if your risk tolerance drives you to invest in one asset class only (i.e. property or shares), then that is okay as long as you use the correct investment methodologies. At the end of the day, the quality of your investments is more important than your level of diversification, especially in the long run.

You probably don’t need to invest in more than two investment-grade properties
Some businesses and articles online promote the benefits of acquiring a large property portfolio. Whilst this might be realistic for some, it’s completely unnecessary for most people. Of all the financial plans that I formulate, I rarely recommend my clients invest in more than three properties. In fact, most plans involve investing in one or two.

There are two reason for this. Firstly, quality trumps quantity every day of the week! It is much better to put all your money in one high-quality property than spread your monies across several “average” quality properties.

Secondly, limiting the amount you invest in property leaves room for you to invest in other assets such as shares, thereby achieving better diversification. However, if you max-out your borrowings (through investing in property), you will probably find that you do not have any capacity to invest in other asset classes.

Beware of anyone that suggests you can and should invest in lots of properties. Your ego must not determine your investment strategy. That is often difficult to do without having to make significant and ultimately costly compromises on the quality of the properties you invest in (unless you have a significant income).

Most pros and cons balance themselves out at a portfolio level
The shares versus property debate has raged on for many years. People in each camp will highlight the pros and cons in each. For example, shares are more liquid, you can invest in shares in smaller amounts, you don’t have to worry about dodgy tenants and so forth. Whereas, for property, people are attracted to the tangible nature of the asset and you can borrow more (at lower rates) to invest in property. These are just some of the pros and cons that are often mentioned.

Most of the pros and cons regularly mentioned are t

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 18babbfc-258c-4f3e-9f0f-5793c4539a8f Wed, 04 Sep 2019 09:00:00 +1000 825 investopoly,wemyss,share investing,share market,property investment,indepenent advice,financial plan 1 83 false How will zero interest rates affect investors? How will zero interest rates affect investors? You would be excused for thinking that developed economies all over the world are gradually making their way to a zero interest rate environment.

Long term fixed mortgage rates in the United States are less than 3% p.a. In the UK, rates are under 2% and even lower in Europe (circa 0.50% p.a. in France for example). In Australian this week, 5-year fixed home loan rate fell below 3% p.a. And in Demark the other week, Jyske Bank announced it would pay borrowers 0.50% p.a. to take out a mortgage! Anyone that had a mortgage in the early 1990’s would regard today’s interest rates as almost unfathomable.

What does this mean for investor, especially those that borrow to invest in property?

Interest rates lower for longer?
The market is predicting that the RBA will cut rates by 0.50% by mid-2020. If this turns out to be correct, Australian mortgage rates could fall even further.

In July, RBA Governor, Phillip Lowe said "Whether or not further monetary easing is needed, it is reasonable to expect an extended period of low interest rates." Many commentators have suggested that interest rates may not increase materially for a decade or longer. Japan, for instance, has been stuck on zero interest rates for 20 years.

But the banks need to charge at least 2%
A measure called the ‘net interest margin’ is the gross profit a bank makes from lending money to its customers. The net interest margin must cover all the banks costs and still deliver a healthy net profit. In Australia, the major banks net interest margin is approximately 2%.

Therefore, even if Australia’s cash rate fell to zero, it is unlikely that variable mortgage rates would fall below 2%, as the banks would seek to maintain their profit margins. Of course, a negative RBA cash rate, which exists in some countries in Europe, could push variable mortgage rates below 2%.

Bye, bye negative gearing tax benefits for property investors
The most obvious consequence of low interest rates for property investors is that it significantly reduces negative gearing tax benefits. When interest rates were 7% p.a., property investors where crystallising large income losses. That is because the interest costs and property expenses were a lot more than the property’s rental income. The investor could offset this loss against employment income and enjoy a sizable tax refund (which is referred to as negative gearing).

According to CoreLogic, Australia’s gross rental yield is 4.1% p.a. Compare that to the current interest only investment mortgage rate of circa 4.5% p.a. and you will see why an investment property’s income loss today is only 40% what it was when interest rates were much higher. As a result, taxation benefits derived from borrowing to invest in property are consequently 60% lower.

In a low interest rate environment, saving tax is no longer a big draw card for prospective property investors. This is a good thing as you should never invest predominantly to generate tax benefits. However, if you were banking on your property investments helping you reduce your tax liabilities, think again.
Don’t use your own money
In a low interest rate environment, using your own cash carries with it a higher opportunity cost. That is, you must consider what investment returns you can generate by investing your cash elsewhere (and using borrowed funds instead). If you believe you can achieve an i

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> You would be excused for thinking that developed economies all over the world are gradually making their way to a zero interest rate environment.

Long term fixed mortgage rates in the United States are less than 3% p.a. In the UK, rates are under 2% and even lower in Europe (circa 0.50% p.a. in France for example). In Australian this week, 5-year fixed home loan rate fell below 3% p.a. And in Demark the other week, Jyske Bank announced it would pay borrowers 0.50% p.a. to take out a mortgage! Anyone that had a mortgage in the early 1990’s would regard today’s interest rates as almost unfathomable.

What does this mean for investor, especially those that borrow to invest in property?

Interest rates lower for longer?
The market is predicting that the RBA will cut rates by 0.50% by mid-2020. If this turns out to be correct, Australian mortgage rates could fall even further.

In July, RBA Governor, Phillip Lowe said "Whether or not further monetary easing is needed, it is reasonable to expect an extended period of low interest rates." Many commentators have suggested that interest rates may not increase materially for a decade or longer. Japan, for instance, has been stuck on zero interest rates for 20 years.

But the banks need to charge at least 2%
A measure called the ‘net interest margin’ is the gross profit a bank makes from lending money to its customers. The net interest margin must cover all the banks costs and still deliver a healthy net profit. In Australia, the major banks net interest margin is approximately 2%.

Therefore, even if Australia’s cash rate fell to zero, it is unlikely that variable mortgage rates would fall below 2%, as the banks would seek to maintain their profit margins. Of course, a negative RBA cash rate, which exists in some countries in Europe, could push variable mortgage rates below 2%.

Bye, bye negative gearing tax benefits for property investors
The most obvious consequence of low interest rates for property investors is that it significantly reduces negative gearing tax benefits. When interest rates were 7% p.a., property investors where crystallising large income losses. That is because the interest costs and property expenses were a lot more than the property’s rental income. The investor could offset this loss against employment income and enjoy a sizable tax refund (which is referred to as negative gearing).

According to CoreLogic, Australia’s gross rental yield is 4.1% p.a. Compare that to the current interest only investment mortgage rate of circa 4.5% p.a. and you will see why an investment property’s income loss today is only 40% what it was when interest rates were much higher. As a result, taxation benefits derived from borrowing to invest in property are consequently 60% lower.

In a low interest rate environment, saving tax is no longer a big draw card for prospective property investors. This is a good thing as you should never invest predominantly to generate tax benefits. However, if you were banking on your property investments helping you reduce your tax liabilities, think again.
Don’t use your own money
In a low interest rate environment, using your own cash carries with it a higher opportunity cost. That is, you must consider what investment returns you can generate by investing your cash elsewhere (and using borrowed funds instead). If you believe you can achieve an i

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 254ecf29-2649-498b-8195-92c643fb4944 Wed, 28 Aug 2019 09:00:00 +1000 1078 investopoly,wemyss,financial advice,share investing,interest rates,zero interest rates 1 82 false The ATO is on the warpath! Here's what it's up to... The ATO is on the warpath! Here's what it's up to... We all want to stay on the ATO’s good side. No one wants to invite a tax audit. But, at the same time, it is prudent to investigate all opportunities to minimise the amount of tax we pay.

This often requires a balance between minimising taxes wherever possible, but not being too aggressive that you risk getting into trouble with the ATO. My view is that you always stick within the black letter of the law – never transgressing into any grey areas – as it’s never worth it in the long run.

The ATO has made some significant changes lately that I want to bring to your attention. These changes might encourage you to review how to manage your finances.

ATO: 90% of property investor tax returns have errors
The ATO announced in April that it will double the number of audits of property investor tax returns to 4,500. It said that its data indicates that 90% of property investor tax returns contained errors. The ATO found four main errors:

Interest deductions
Errors included incorrectly claiming interest that was not tax-deductible (i.e. debt was not used to produce taxable income e.g. home loan) and/or loan purpose was not able to be proven by the taxpayer e.g. they mixed purposes in one loan.

It is likely that interest is your largest tax deduction, so you must take care in not compromising it. Make sure your loans are correctly structured as I have previously described here. And keep good records i.e. you can demonstrate what investment asset each loan relates to.

In short, separate loans by asset i.e. separate loan/s for each property or investment – avoid having one loan for multiple purposes. And if you refinance and/or loan amounts change, keep thorough records.

Claiming improvements as repairs
In short, a repair brings an asset back to the same condition it was in when you first acquired the property. An improvement on the other hand is improving the asset beyond its original condition and/or changing the nature of an asset.

The cost of repairs can be claimed in full in the year they are incurred whereas an improvement must be depreciated over its useful life.

The ATO does provide some guidance in its website here but sometimes its not easy to ascertain whether a cost is a repair or improvement or both, so in that situation you should obtain tax advice.

Holiday homes
The ATO’s main concern is making sure that any deductions claimed in respect to holiday homes that are rented out for part of the year are correctly apportioned. Apportionment of expenses must take into account whether the property was rented at a rate below market (to friends or family), whether it was available for rent during peak periods, if the owners unreasonably refused tenants and whether the owners genuinely took steps to find tenants during periods it wasn’t occupied.

If you own a holiday house that is partly rented out and partly occupied, ensure you use the services of an experienced registered tax agent.

No receipts
The onus is on the taxpayer to prove a tax deduction is legitimate. In the absences of said proof, the ATO will simply deny the deduction. The ATO found that many taxpayers failed to produce sufficient evidence of expenses claimed e.g. receipts.

I always recommend that you ask your managing agent to pay for all expe

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> We all want to stay on the ATO’s good side. No one wants to invite a tax audit. But, at the same time, it is prudent to investigate all opportunities to minimise the amount of tax we pay.

This often requires a balance between minimising taxes wherever possible, but not being too aggressive that you risk getting into trouble with the ATO. My view is that you always stick within the black letter of the law – never transgressing into any grey areas – as it’s never worth it in the long run.

The ATO has made some significant changes lately that I want to bring to your attention. These changes might encourage you to review how to manage your finances.

ATO: 90% of property investor tax returns have errors
The ATO announced in April that it will double the number of audits of property investor tax returns to 4,500. It said that its data indicates that 90% of property investor tax returns contained errors. The ATO found four main errors:

Interest deductions
Errors included incorrectly claiming interest that was not tax-deductible (i.e. debt was not used to produce taxable income e.g. home loan) and/or loan purpose was not able to be proven by the taxpayer e.g. they mixed purposes in one loan.

It is likely that interest is your largest tax deduction, so you must take care in not compromising it. Make sure your loans are correctly structured as I have previously described here. And keep good records i.e. you can demonstrate what investment asset each loan relates to.

In short, separate loans by asset i.e. separate loan/s for each property or investment – avoid having one loan for multiple purposes. And if you refinance and/or loan amounts change, keep thorough records.

Claiming improvements as repairs
In short, a repair brings an asset back to the same condition it was in when you first acquired the property. An improvement on the other hand is improving the asset beyond its original condition and/or changing the nature of an asset.

The cost of repairs can be claimed in full in the year they are incurred whereas an improvement must be depreciated over its useful life.

The ATO does provide some guidance in its website here but sometimes its not easy to ascertain whether a cost is a repair or improvement or both, so in that situation you should obtain tax advice.

Holiday homes
The ATO’s main concern is making sure that any deductions claimed in respect to holiday homes that are rented out for part of the year are correctly apportioned. Apportionment of expenses must take into account whether the property was rented at a rate below market (to friends or family), whether it was available for rent during peak periods, if the owners unreasonably refused tenants and whether the owners genuinely took steps to find tenants during periods it wasn’t occupied.

If you own a holiday house that is partly rented out and partly occupied, ensure you use the services of an experienced registered tax agent.

No receipts
The onus is on the taxpayer to prove a tax deduction is legitimate. In the absences of said proof, the ATO will simply deny the deduction. The ATO found that many taxpayers failed to produce sufficient evidence of expenses claimed e.g. receipts.

I always recommend that you ask your managing agent to pay for all expe

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss a87170be-0a5d-464b-b72c-bedcf9d144d9 Thu, 22 Aug 2019 10:00:00 +1000 1035 investopoly,wemyss,tax,saving tax,property investment,property,investing,building wealth, 1 81 false Are property buyers' agents worth the money? Are property buyers' agents worth the money? A buyers’ agent is a real estate professional that will help you identify and negotiate the purchase of a property according to your specifications. They typically work for property investors but can also be engaged to purchase owner-occupier homes. This blog discussed whether you should use a buyers’ agent and if they are worth the money?

Don’t forget, I’m independent!
I have no vested interest in whether my clients engage a buyers’ agent or not. I am completely independent.

The advantage I have is that over the past 18 years since starting ProSolution, I have seen the performance of many property purchases resulting from advice provided by many different buyers’ agents. Also, like in many industries, the buyers’ agent industry is small. You quickly learn what types of properties different agents are buying, and what the outcomes have been. In short, I have the perspective of being an “independent umpire” for over nearly the past two decades.

These are my musings – hopefully they help you and give you some insight.

Mostly used by investor
Most buyers’ agents aim their services at investors. There are a few buyers’ agents that will work for home buyers. However, buying a home can be a more difficult brief because there are many considerations to take into account as it tends to be a more of an emotional purchase. For the sake of this blog, I’ll focus on investors only.

It’s what you don’t know (or can’t see) that could hurt you
Selecting an investment-grade property can appear deceptively easy. You would be excused for thinking that all you need is a checklist of items/characteristics to run each property through. However, as I have written about previously, identifying a quality investment-grade property is part-art and part-science. A good checklist and some financial analysis should satisfy the ‘science’ bit. However, you typically need years of experience to fulfil the ‘art’ component.

I recall discussing a property with a reputable buyers’ agent a few years ago. The property seemed (to me) to tick all the boxes. However, the buyers’ agent didn’t like the property because the street was renowned for car break-ins. As such, tenant turnover was higher than usual. No checklist will ever tell you that. Similarly, buyers’ agents have previously told me that sometimes a particular side of the street just won’t work from an investment perspective. Sometimes there’s no logical reason for an anomaly such as this – it comes down to experience.

A professional advisors ‘experience’ should never be underestimated. In fact, as an independent financial advisor, I know it’s the most valuable attribute that I have to share with my clients. Of course, technical knowledge such as tax and super laws are important. But experience, such as knowing what strategies work in what situations, how markets behave, when to act and when to sit tight and so on are invaluable.

It is far cheaper to learn from people’s experience than learn from your own (i.e. trial and error).

You only have to be a little bit wrong to miss out on a lot of the investment return
The difference in investment returns between an average property and an investment-grade property can be significant, especially over the long run. That is, making a few compromises on a property’s quality/attributes will likely result in a lower capital growth rate. A lot of property in Australia exhibits a growth rate at,

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> A buyers’ agent is a real estate professional that will help you identify and negotiate the purchase of a property according to your specifications. They typically work for property investors but can also be engaged to purchase owner-occupier homes. This blog discussed whether you should use a buyers’ agent and if they are worth the money?

Don’t forget, I’m independent!
I have no vested interest in whether my clients engage a buyers’ agent or not. I am completely independent.

The advantage I have is that over the past 18 years since starting ProSolution, I have seen the performance of many property purchases resulting from advice provided by many different buyers’ agents. Also, like in many industries, the buyers’ agent industry is small. You quickly learn what types of properties different agents are buying, and what the outcomes have been. In short, I have the perspective of being an “independent umpire” for over nearly the past two decades.

These are my musings – hopefully they help you and give you some insight.

Mostly used by investor
Most buyers’ agents aim their services at investors. There are a few buyers’ agents that will work for home buyers. However, buying a home can be a more difficult brief because there are many considerations to take into account as it tends to be a more of an emotional purchase. For the sake of this blog, I’ll focus on investors only.

It’s what you don’t know (or can’t see) that could hurt you
Selecting an investment-grade property can appear deceptively easy. You would be excused for thinking that all you need is a checklist of items/characteristics to run each property through. However, as I have written about previously, identifying a quality investment-grade property is part-art and part-science. A good checklist and some financial analysis should satisfy the ‘science’ bit. However, you typically need years of experience to fulfil the ‘art’ component.

I recall discussing a property with a reputable buyers’ agent a few years ago. The property seemed (to me) to tick all the boxes. However, the buyers’ agent didn’t like the property because the street was renowned for car break-ins. As such, tenant turnover was higher than usual. No checklist will ever tell you that. Similarly, buyers’ agents have previously told me that sometimes a particular side of the street just won’t work from an investment perspective. Sometimes there’s no logical reason for an anomaly such as this – it comes down to experience.

A professional advisors ‘experience’ should never be underestimated. In fact, as an independent financial advisor, I know it’s the most valuable attribute that I have to share with my clients. Of course, technical knowledge such as tax and super laws are important. But experience, such as knowing what strategies work in what situations, how markets behave, when to act and when to sit tight and so on are invaluable.

It is far cheaper to learn from people’s experience than learn from your own (i.e. trial and error).

You only have to be a little bit wrong to miss out on a lot of the investment return
The difference in investment returns between an average property and an investment-grade property can be significant, especially over the long run. That is, making a few compromises on a property’s quality/attributes will likely result in a lower capital growth rate. A lot of property in Australia exhibits a growth rate at,

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 95215008-1317-42a1-a403-09c4c6220e78 Wed, 14 Aug 2019 10:30:00 +1000 1201 investopoly,wemyss,buyers agent,property investing,indepenent advice,financial advice,Melbourne financial advisor 1 80 false How are you going to repay all your loans before you retire? How are you going to repay all your loans before you retire? Borrowing to invest (in property or shares) is typically a good wealth accumulation strategy as long as you do it prudently and adopt a proven methodology to select quality investments. If used wisely, debt can be a very effective tool. However, whilst your investment strategy might require you to get into debt, the strategy must also articulate how you will get out of debt (i.e. repay it). This blog sets out some of these strategies.

How much debt is safe to take into retirement?
You must think about your interest rate sensitivity in retirement. For example, if you have $2 million of borrowings, an interest rate increase of 1% will cost you an extra $20,000 per year. If your only source of income is from investments and super, that increased amount of interest might have a big impact on your cash flow and standard of living.

Generally, you want to aim for a debt level that is far less sensitive to changes in interest rates. Worrying about interest rate changes is the last thing you want to do in retirement.

One thing I always aim for when developing a strategy is that I definitely do not want any negative gearing in retirement. That is, your investment property portfolio (if you have one) should at least be paying for itself i.e. rental income covers all expenses including loan repayments. It doesn’t necessarily have to generate a lot of income (depending on the client’s situation of course), but we don’t want to be in a position where your property portfolio is sucking out cash flow.

Having zero debt might not be an optimal strategy either. A conservative amount of leverage will allow you to build wealth more aggressively, particularly in the first decade of retirement. I would argue however that you want to aim to have more conservative levels of debt when you are retired (compared to when you are working).

Debt repayment tactics
When formulating a long-term investment strategy for my clients, there are a number of strategies we can employ in the strategy that allows us to reduce debt to an acceptable level prior to retirement.

Buy an asset specifically to sell
Selling assets to repay debt solves one problem (i.e. reduces debt) but can create another i.e. it might mean that you have insufficient remaining investments to fund your retirement.
However, if you formulate a strategy from the beginning that is premised on the idea that you will sell an asset as a debt reduction mechanism, you can proactively plan around this. Firstly, it would be wise to focus on ways to reduce your Capital Gains Tax (CGT) liability such as owning the asset in a family trust, tenants-in-common or in your super fund. Secondly, you can select the most appropriate asset and location that best suits this strategy. For example, if you are planning to sell the asset in 15 years’ time then I would consider buying a house that you could add value to (e.g. renovate, sub-divide or develop) – so that you were not totally reliant on the market to generate equity in the property.

Owning that house in a super fund would mean that you could avoid CGT altogether if you dispose of the property post retirement (in pension phase). For example, if you purchase a house in a blue-chip suburb in Brisbane for $850,000 and it appreciates in value by 7% p.a., I estimate you will net circa $1.4 million in cash after repaying the loan and all costs if you sell it in 15 years’ time. That should be enough to make a significant reduction to your debt.

Use surplus cash flow
You can direct some or all of your surplus cash flow into offset accounts to notionally reduce your debt. As discussed in my blog last w

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Borrowing to invest (in property or shares) is typically a good wealth accumulation strategy as long as you do it prudently and adopt a proven methodology to select quality investments. If used wisely, debt can be a very effective tool. However, whilst your investment strategy might require you to get into debt, the strategy must also articulate how you will get out of debt (i.e. repay it). This blog sets out some of these strategies.

How much debt is safe to take into retirement?
You must think about your interest rate sensitivity in retirement. For example, if you have $2 million of borrowings, an interest rate increase of 1% will cost you an extra $20,000 per year. If your only source of income is from investments and super, that increased amount of interest might have a big impact on your cash flow and standard of living.

Generally, you want to aim for a debt level that is far less sensitive to changes in interest rates. Worrying about interest rate changes is the last thing you want to do in retirement.

One thing I always aim for when developing a strategy is that I definitely do not want any negative gearing in retirement. That is, your investment property portfolio (if you have one) should at least be paying for itself i.e. rental income covers all expenses including loan repayments. It doesn’t necessarily have to generate a lot of income (depending on the client’s situation of course), but we don’t want to be in a position where your property portfolio is sucking out cash flow.

Having zero debt might not be an optimal strategy either. A conservative amount of leverage will allow you to build wealth more aggressively, particularly in the first decade of retirement. I would argue however that you want to aim to have more conservative levels of debt when you are retired (compared to when you are working).

Debt repayment tactics
When formulating a long-term investment strategy for my clients, there are a number of strategies we can employ in the strategy that allows us to reduce debt to an acceptable level prior to retirement.

Buy an asset specifically to sell
Selling assets to repay debt solves one problem (i.e. reduces debt) but can create another i.e. it might mean that you have insufficient remaining investments to fund your retirement.
However, if you formulate a strategy from the beginning that is premised on the idea that you will sell an asset as a debt reduction mechanism, you can proactively plan around this. Firstly, it would be wise to focus on ways to reduce your Capital Gains Tax (CGT) liability such as owning the asset in a family trust, tenants-in-common or in your super fund. Secondly, you can select the most appropriate asset and location that best suits this strategy. For example, if you are planning to sell the asset in 15 years’ time then I would consider buying a house that you could add value to (e.g. renovate, sub-divide or develop) – so that you were not totally reliant on the market to generate equity in the property.

Owning that house in a super fund would mean that you could avoid CGT altogether if you dispose of the property post retirement (in pension phase). For example, if you purchase a house in a blue-chip suburb in Brisbane for $850,000 and it appreciates in value by 7% p.a., I estimate you will net circa $1.4 million in cash after repaying the loan and all costs if you sell it in 15 years’ time. That should be enough to make a significant reduction to your debt.

Use surplus cash flow
You can direct some or all of your surplus cash flow into offset accounts to notionally reduce your debt. As discussed in my blog last w

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 31881b0d-169d-4e39-b0e5-0014f0e39d88 Wed, 07 Aug 2019 14:21:00 +1000 756 Investopoly,financial advice,wemyss,debt repayment,financial planning,Independent advice,property investment 1 79 false You can't earn your way to financial freedom You can't earn your way to financial freedom I have written about cash flow management a couple of times previously (here and here) because it is the most important thing to master in order to build wealth. It is also the reason that most people fail to build wealth. In fact, I have never met a wealthy person that doesn’t have good cash flow management. That is not to say they don’t spend money on luxury items. They only spend on luxury items that matter to them.

The purpose of this blog is to show you how to master cash flow management in a very simple, easy to follow way. You don’t have to become super-tight or track every cent you spend. You just need to become a ‘conscious spender’.

Money just goes… if you let it
There’s a saying that “a vacuum always fills” and this applies to cash flow too. I notice that with most people, living expenses rise in line with income increases. And most people spend whatever they earn. There is always something to spend money on. A better home, better clothes, better schools, better holidays, better restaurants – and the list goes on! Our ego wants us to spend all our money on “better stuff”. We tell ourselves we are worth it. We’ve worked hard so we deserve these “better things”. But don’t let the ego win! Ego really is the enemy of successful wealth accumulation.

The difference between people that have successfully built wealth and those that have not is that wealthy people are very deliberate about their expenditure. They don’t waste money. They think about everything they spend money on and if it’s something that is not important to them, they will find the cheapest option or eliminate the expenditure in full. It’s all about value for money. Very few things are purchased on impulse. If it’s something that is important to them, they are happy to pay a premium (luxury price). However, in reality, there are few items that meet this definition. In short, wealthy people are smart with their money. It is not smart to buy something you aren’t going to care about in a few weeks’ or months’ time – irrespective of whether you have the money or not.

Rich people know they can buy everything they want
Sometimes people spend money on items to make themselves feel special, successful or even rich. For example, only a small percentage of the population can spend $700 on a pair of shoes, so “I must be rich” they tell themselves.

However, rich people tend to operate differently. Rich people want to feel smart about their spending. They know they can buy all the brand names they want – there are few limits. So, its not about whether they can afford it. Therefore, it tends to come down to only two questions; (1) do I really need or want this item and (2) is it good value-for-money? Rich people know that’s what sets them apart from the vast majority of people i.e. they know how to be smart with their money. It has nothing to do with proving they are rich (by buying more stuff).

Therefore, change the story in your head. Tell yourself that you are rich. That you can afford to buy whatever you want if you really wanted to. But the desire to feel smart with money is stronger than the desire to feel rich.

Why is a cash flow surplus so important?
If we spend all our income, we will have nothing left over to save for tomorrow (retirement). However, if we save a bit and spend a bit, we can enjoy life today and feel comfortable that we’re building wealth for tomorrow. In essence, you need to spend less than you earn and invest the difference on a regular and consistent basis. If you can’t achieve tha

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> I have written about cash flow management a couple of times previously (here and here) because it is the most important thing to master in order to build wealth. It is also the reason that most people fail to build wealth. In fact, I have never met a wealthy person that doesn’t have good cash flow management. That is not to say they don’t spend money on luxury items. They only spend on luxury items that matter to them.

The purpose of this blog is to show you how to master cash flow management in a very simple, easy to follow way. You don’t have to become super-tight or track every cent you spend. You just need to become a ‘conscious spender’.

Money just goes… if you let it
There’s a saying that “a vacuum always fills” and this applies to cash flow too. I notice that with most people, living expenses rise in line with income increases. And most people spend whatever they earn. There is always something to spend money on. A better home, better clothes, better schools, better holidays, better restaurants – and the list goes on! Our ego wants us to spend all our money on “better stuff”. We tell ourselves we are worth it. We’ve worked hard so we deserve these “better things”. But don’t let the ego win! Ego really is the enemy of successful wealth accumulation.

The difference between people that have successfully built wealth and those that have not is that wealthy people are very deliberate about their expenditure. They don’t waste money. They think about everything they spend money on and if it’s something that is not important to them, they will find the cheapest option or eliminate the expenditure in full. It’s all about value for money. Very few things are purchased on impulse. If it’s something that is important to them, they are happy to pay a premium (luxury price). However, in reality, there are few items that meet this definition. In short, wealthy people are smart with their money. It is not smart to buy something you aren’t going to care about in a few weeks’ or months’ time – irrespective of whether you have the money or not.

Rich people know they can buy everything they want
Sometimes people spend money on items to make themselves feel special, successful or even rich. For example, only a small percentage of the population can spend $700 on a pair of shoes, so “I must be rich” they tell themselves.

However, rich people tend to operate differently. Rich people want to feel smart about their spending. They know they can buy all the brand names they want – there are few limits. So, its not about whether they can afford it. Therefore, it tends to come down to only two questions; (1) do I really need or want this item and (2) is it good value-for-money? Rich people know that’s what sets them apart from the vast majority of people i.e. they know how to be smart with their money. It has nothing to do with proving they are rich (by buying more stuff).

Therefore, change the story in your head. Tell yourself that you are rich. That you can afford to buy whatever you want if you really wanted to. But the desire to feel smart with money is stronger than the desire to feel rich.

Why is a cash flow surplus so important?
If we spend all our income, we will have nothing left over to save for tomorrow (retirement). However, if we save a bit and spend a bit, we can enjoy life today and feel comfortable that we’re building wealth for tomorrow. In essence, you need to spend less than you earn and invest the difference on a regular and consistent basis. If you can’t achieve tha

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss af40518e-0593-44fa-af4e-e413bc2af151 Thu, 01 Aug 2019 10:00:00 +1000 1049 investopoly,wemyss,cash flow,financial advice,investing,investment,independent financial advice 1 78 false Making the most of a recovering property market Making the most of a recovering property market To watch the full presentation, go to https://www.prosolution.com.au/recovering-property-market/

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> To watch the full presentation, go to https://www.prosolution.com.au/recovering-property-market/

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 76b6c6b6-0496-46f4-b97e-9d8dac5ad48d Thu, 25 Jul 2019 09:55:00 +1000 1241 property market,investopoly,wemyss,finance,mortgages,investing, 1 77 false Borrowing capacity has increased - but by how much? Borrowing capacity has increased - but by how much? Two weeks ago, APRA told the banks that it no longer expects them to use a benchmark interest rate of 7.25% when testing an applicant’s borrowing capacity. Instead, they must add a buffer of at least 2.50% onto the loan’s interest rate. Given most home loan interest rates are in the 3’s, that could substantially improve your borrowing capacity.

The banks are starting to push back on regulators
Until now, the banks have remained relatively silent about the government’s crackdown on lending standards which has resulted in a severe reduction in borrowing capacity. Of course, they have wanted to stay out of the limelight given recent bad press from the Royal Commission. However, they have now found their voice and have said the level of tightening is impractical, anti-competitive and potentially damaging to the economy.

ASIC will hold public hearings in in August as part of its public consultation process. The banks will have an opportunity to voice their concerns in a more public arena.

How banks assess your borrowing capacity
The banks will typically make a number of adjustments to assess your ability to service debt. Whilst all lenders have different rules, the below formula summaries the banks typical approach.


The table is a generalisation. Due to differences in policies and your situation, each lender might apply slightly different methods.

The impact of the recent benchmark interest rate reduction
Last week both ANZ and Westpac announced that they will use a lower benchmark interest rate when calculating borrowing capacity i.e. not 7.25%. They will use the current rate plus 2.50%. This increased their borrowing capacity. I compared the big 4’s borrowing capacity using the same inputs and the table below summarises my findings.


ANZ’s borrowing capacity has increase by 20% whereas Westpac’s only increases by 8% because it made some changes to minimum living expenses – they give with one hand and take with the other. It is interesting to note that ANZ and nab’s borrowing capacity vary by almost 17%! This demonstrates that it’s important to compare a number of lenders.

Please don’t conclude from this that ANZ’s borrowing capacity is always higher than nab. There are so many variations in policy, calculations and individual client situations that this may not always be the case.

Living expenses are the real problem

The more debt you have, the greater the impact the benchmark interest rate will have on your borrowing capacity. However, for most people, the treatment of living expenses is the main thing destroying borrowing capacity at the moment.

The problem is the banks do not treat discretionary and non-discretionary expenditure differently. Therefore, if you eat out every week and spend $200 per meal, it is assumed that your ongoing annual commitment is $10,000. And that alone reduces your borrowing capacity by approximately $130,000.

But of course, that is nonsensical. If you exp

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Two weeks ago, APRA told the banks that it no longer expects them to use a benchmark interest rate of 7.25% when testing an applicant’s borrowing capacity. Instead, they must add a buffer of at least 2.50% onto the loan’s interest rate. Given most home loan interest rates are in the 3’s, that could substantially improve your borrowing capacity.

The banks are starting to push back on regulators
Until now, the banks have remained relatively silent about the government’s crackdown on lending standards which has resulted in a severe reduction in borrowing capacity. Of course, they have wanted to stay out of the limelight given recent bad press from the Royal Commission. However, they have now found their voice and have said the level of tightening is impractical, anti-competitive and potentially damaging to the economy.

ASIC will hold public hearings in in August as part of its public consultation process. The banks will have an opportunity to voice their concerns in a more public arena.

How banks assess your borrowing capacity
The banks will typically make a number of adjustments to assess your ability to service debt. Whilst all lenders have different rules, the below formula summaries the banks typical approach.


The table is a generalisation. Due to differences in policies and your situation, each lender might apply slightly different methods.

The impact of the recent benchmark interest rate reduction
Last week both ANZ and Westpac announced that they will use a lower benchmark interest rate when calculating borrowing capacity i.e. not 7.25%. They will use the current rate plus 2.50%. This increased their borrowing capacity. I compared the big 4’s borrowing capacity using the same inputs and the table below summarises my findings.


ANZ’s borrowing capacity has increase by 20% whereas Westpac’s only increases by 8% because it made some changes to minimum living expenses – they give with one hand and take with the other. It is interesting to note that ANZ and nab’s borrowing capacity vary by almost 17%! This demonstrates that it’s important to compare a number of lenders.

Please don’t conclude from this that ANZ’s borrowing capacity is always higher than nab. There are so many variations in policy, calculations and individual client situations that this may not always be the case.

Living expenses are the real problem

The more debt you have, the greater the impact the benchmark interest rate will have on your borrowing capacity. However, for most people, the treatment of living expenses is the main thing destroying borrowing capacity at the moment.

The problem is the banks do not treat discretionary and non-discretionary expenditure differently. Therefore, if you eat out every week and spend $200 per meal, it is assumed that your ongoing annual commitment is $10,000. And that alone reduces your borrowing capacity by approximately $130,000.

But of course, that is nonsensical. If you exp

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss d2854bda-4753-4d17-9203-06258f89846e Wed, 17 Jul 2019 10:00:00 +1000 880 Investopoly,wemyss,property investing,borrowing,mortgage,mortgage advice,mortgage broker, 1 76 false What investment returns can we expect from share markets? What investment returns can we expect from share markets? The Australian and US share markets reached all-time highs at the end of last week. This is great news for superannuation returns and existing share investors. However, where will the markets go from here?

When valuations are high, future returns will be low

There is a strong negative correlation between the starting valuation multiple (e.g. price-earnings ratio) and an investor’s subsequent 10-year investment returns. That is, if current valuations are high, future returns are likely to be low. This makes sense because if you invest in a company or market that is currently fully valued, there isn’t a lot of upside left. In fact, it could be that you are overpaying to invest in that company or market. If that is the case, you could experience capital deprecation.

The US market valuations appear elevated

The CAPE ratio is a widely accepted measure of a market’s current valuation relative to history. Currently, the US market’s CAPE ratio is over 30. The long-term average is in the range of 18 to 22, depending on the period and adjustments made. The US CAPE ratio has only been above 30 two times since 1871:
  • in 1929 when the share market crashed nearly 25% (Black Tuesday) – the CAPR ratio was 32.5; and
  • in December 2000 when it reached 44 during the dot-com boom. The NASDAQ-100 lost 78% of its value between 2000 and 2002 (called the Dot-Com Bubble).

Am I saying that the US market will crash? No. In fact, the CAPE ratio is not a reliable indicator of short-term market movements, only long-term (10 year) returns. But this analysis does indicate that US market valuations are alleviated and as such, history tells us that future returns will likely be lower.

What about Australia and rest of the world?

Australia’s CAPE ratio is currently 18.4 which is above its median at 16.5. Fair value is considered to be 17.1. So, whilst the Australian market appears to be slightly overvalued, the differential isn’t as much as the US and other markets. It is important to note that most developed markets appear elevated at the moment – except for the UK and Europe.

There are some headwinds to consider

There are a few headwinds that might impact future equity market returns including:
  • The US is arguably towards the end of an economic growth cycle. Whilst the employment market is still going strong with a record low unemployment rate, jobs growth and an uptick in wage inflation, it can’t go on forever. The S&P500 index has appreciated by more than 15% per year over the past 10 years. The only question is whether the slowdown will be a soft or hard (recession) landing?
  • The RBA has expressed some concerns in regard to the Australian economy namely low wage growth and subdued consumer spending. If the property market recovers, that might improve consumer confidence. But if things deteriorate, Australia might slip into recession.
  • The UK Brexit debacle is still ongoing. In Europe, the German economy is slowing down and Italy is a basket-case (although is a relatively small economy).

What has driven past growth in the US?

The large tech companies are responsible for driving a lot of share market returns in the US over the past decade. As illustrated below, the aggregate value of the FANMAG (Facebook, Apple, Netfli

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> The Australian and US share markets reached all-time highs at the end of last week. This is great news for superannuation returns and existing share investors. However, where will the markets go from here?

When valuations are high, future returns will be low

There is a strong negative correlation between the starting valuation multiple (e.g. price-earnings ratio) and an investor’s subsequent 10-year investment returns. That is, if current valuations are high, future returns are likely to be low. This makes sense because if you invest in a company or market that is currently fully valued, there isn’t a lot of upside left. In fact, it could be that you are overpaying to invest in that company or market. If that is the case, you could experience capital deprecation.

The US market valuations appear elevated

The CAPE ratio is a widely accepted measure of a market’s current valuation relative to history. Currently, the US market’s CAPE ratio is over 30. The long-term average is in the range of 18 to 22, depending on the period and adjustments made. The US CAPE ratio has only been above 30 two times since 1871:
  • in 1929 when the share market crashed nearly 25% (Black Tuesday) – the CAPR ratio was 32.5; and
  • in December 2000 when it reached 44 during the dot-com boom. The NASDAQ-100 lost 78% of its value between 2000 and 2002 (called the Dot-Com Bubble).

Am I saying that the US market will crash? No. In fact, the CAPE ratio is not a reliable indicator of short-term market movements, only long-term (10 year) returns. But this analysis does indicate that US market valuations are alleviated and as such, history tells us that future returns will likely be lower.

What about Australia and rest of the world?

Australia’s CAPE ratio is currently 18.4 which is above its median at 16.5. Fair value is considered to be 17.1. So, whilst the Australian market appears to be slightly overvalued, the differential isn’t as much as the US and other markets. It is important to note that most developed markets appear elevated at the moment – except for the UK and Europe.

There are some headwinds to consider

There are a few headwinds that might impact future equity market returns including:
  • The US is arguably towards the end of an economic growth cycle. Whilst the employment market is still going strong with a record low unemployment rate, jobs growth and an uptick in wage inflation, it can’t go on forever. The S&P500 index has appreciated by more than 15% per year over the past 10 years. The only question is whether the slowdown will be a soft or hard (recession) landing?
  • The RBA has expressed some concerns in regard to the Australian economy namely low wage growth and subdued consumer spending. If the property market recovers, that might improve consumer confidence. But if things deteriorate, Australia might slip into recession.
  • The UK Brexit debacle is still ongoing. In Europe, the German economy is slowing down and Italy is a basket-case (although is a relatively small economy).

What has driven past growth in the US?

The large tech companies are responsible for driving a lot of share market returns in the US over the past decade. As illustrated below, the aggregate value of the FANMAG (Facebook, Apple, Netfli

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss f7c4b462-89f5-4fb7-aebc-b28b95e96885 Tue, 09 Jul 2019 10:00:00 +1000 1124 investopoly,wemyss,shares,investing,share market,index funds,stocks,ETFs, 1 75 false Why I reject potential clients... and some important lessons Why I reject potential clients... and some important lessons I say “no” more often than I say “yes”. That is, I decline or defer the opportunity to work with more people than I agree to work with because, ultimately, I think it’s in their best interest. Not everyone is ready for tailored financial advice for lots of reasons as I discuss below.

Products are easy to sell, tailored advice is not

It’s very easy to buy a financial advice ‘product’ such as a property investment plan. But it’s much harder to buy tailored advice. A product has a clear deliverable e.g. here’s an example of a property plan. You know exactly what you will receive and what the advice is likely to look like.

However, with tailored advice, the deliverable is less certain. Because until I do the work (i.e. formulate the strategy), I don’t know what the advice will look like. Maybe it involves super, shares, property or a combination of all three? I might have a hunch, but I won’t know for sure – because that’s what you are paying me for. That is, to:
(1) not have a premeditated idea of what your strategy should or shouldn’t include (these often exist due to a vested interest); and
(2) to clarify something that is currently unclear e.g. what is the best strategy to fund retirement. If you or I already knew the answer to this question, I wouldn’t need to do any work.

However, selling a product is scalable and some businesses do very well out of it. A product is a systemised way of generating financial advice. The business doesn’t need to hire experienced advisors – as the ‘system’ will do all the work. Whereas there is only one Stuart Wemyss (thankfully, I hear some people think). So, my advice is not scalable. But that’s fine because that’s what my clients are paying me for – my experience and professional advice specifically tailored for their situation.

Financial ‘products’ often offer limited value because they aren’t completely tailored to meet a specific client’s situation. I can design a great property portfolio and prepare some cash flow projections but that doesn’t mean it will suit everyone. How does the property integrate with your other assets such as super? What about debt management (you don’t want to take a lot of debt into retirement)? What about existing assets and cash flow?

If you are seeking advice from a professional, its important to ask yourself whether you are buying a product or tailored advice. Buying tailored advice means you need to put faith and trust in the person that is advising you – and that can be a difficult decision. Just because it’s easier for you to buy (and someone to sell) a product, doesn’t mean it’s worthwhile.

But not everyone is ready for tailored advice. Here is a list of reasons that I decline or defer to work with prospective clients.

Lack of cash flow surplus

A prospective client must have surplus cash flow to invest. It is normally impossible to develop a retirement strategy without it.
Surplus cash flow refers to the situation where your expenses and commitments are less than your income i.e. you have monies left over every fortnight or month. If you are spending all your income, there is not much I can do for you as a financial advisor (other than counsel you to reduce your spending).
Generally, a prospective client needs to have a minimum surplus cash of over $1,000 per month to justify paying for advice.

Building wealth when you have a young family is very challenging because your income is typically unusually low (either or both parents are not working as much) and your expenses are unusually high (childcare is often more expensive than private school fees!). I discussed this challenge in

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> I say “no” more often than I say “yes”. That is, I decline or defer the opportunity to work with more people than I agree to work with because, ultimately, I think it’s in their best interest. Not everyone is ready for tailored financial advice for lots of reasons as I discuss below.

Products are easy to sell, tailored advice is not

It’s very easy to buy a financial advice ‘product’ such as a property investment plan. But it’s much harder to buy tailored advice. A product has a clear deliverable e.g. here’s an example of a property plan. You know exactly what you will receive and what the advice is likely to look like.

However, with tailored advice, the deliverable is less certain. Because until I do the work (i.e. formulate the strategy), I don’t know what the advice will look like. Maybe it involves super, shares, property or a combination of all three? I might have a hunch, but I won’t know for sure – because that’s what you are paying me for. That is, to:
(1) not have a premeditated idea of what your strategy should or shouldn’t include (these often exist due to a vested interest); and
(2) to clarify something that is currently unclear e.g. what is the best strategy to fund retirement. If you or I already knew the answer to this question, I wouldn’t need to do any work.

However, selling a product is scalable and some businesses do very well out of it. A product is a systemised way of generating financial advice. The business doesn’t need to hire experienced advisors – as the ‘system’ will do all the work. Whereas there is only one Stuart Wemyss (thankfully, I hear some people think). So, my advice is not scalable. But that’s fine because that’s what my clients are paying me for – my experience and professional advice specifically tailored for their situation.

Financial ‘products’ often offer limited value because they aren’t completely tailored to meet a specific client’s situation. I can design a great property portfolio and prepare some cash flow projections but that doesn’t mean it will suit everyone. How does the property integrate with your other assets such as super? What about debt management (you don’t want to take a lot of debt into retirement)? What about existing assets and cash flow?

If you are seeking advice from a professional, its important to ask yourself whether you are buying a product or tailored advice. Buying tailored advice means you need to put faith and trust in the person that is advising you – and that can be a difficult decision. Just because it’s easier for you to buy (and someone to sell) a product, doesn’t mean it’s worthwhile.

But not everyone is ready for tailored advice. Here is a list of reasons that I decline or defer to work with prospective clients.

Lack of cash flow surplus

A prospective client must have surplus cash flow to invest. It is normally impossible to develop a retirement strategy without it.
Surplus cash flow refers to the situation where your expenses and commitments are less than your income i.e. you have monies left over every fortnight or month. If you are spending all your income, there is not much I can do for you as a financial advisor (other than counsel you to reduce your spending).
Generally, a prospective client needs to have a minimum surplus cash of over $1,000 per month to justify paying for advice.

Building wealth when you have a young family is very challenging because your income is typically unusually low (either or both parents are not working as much) and your expenses are unusually high (childcare is often more expensive than private school fees!). I discussed this challenge in

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 333a14b7-a666-4b37-8525-1dc10e436b61 Wed, 03 Jul 2019 12:00:00 +1000 949 Investopoly,fiancial advice,wemyss,prosolution,advice 1 74 false Australia's property challenge could be your investment opportunity Australia's property challenge could be your investment opportunity Every few years The Economist magazine writes a story about how property in Australia is overvalued compared to other countries – or something to that effect. Comparing Australia with other countries is like comparing apples and oranges. Australia is just so different. But this difference creates opportunities for investors that play the long game. Let me explain.

Big country and not enough taxpayers
I recently spent a few weeks travelling around France. It is so easy to get around. Its roads are in very good condition and the trains are fast, efficient and on-time.

It is easy to overlook that France would fit into Australia 14 times and its population is over 3 times more than Australia (25 million versus 76 million people). On average, there are 122 French people per square kilometre of land. In Australia, it’s a measly 3 people per square kilometre (and in the USA, 33 people).

In Australia, we have too much land and not enough taxpayers to fund the construction and maintenance of adequate infrastructure. Therefore, in order to access good schools and universities, diverse employment opportunities, health facilities, amenities and lifestyle benefits, you must live close to or in a capital city. That’s why 60% of Australia’s population live in either Melbourne, Sydney, Brisbane or Perth. Whereas only just over 3% of France’s population lives in Paris. Living outside of Paris (in say Lyon or Toulouse) isn’t a big disadvantage. (BTW, I haven’t selected France for any particular reason – just using it as an example)

Australian federal and state governments have tried to promote regional centres such as Newcastle and Wollongong in NSW or Geelong and Bendigo in Victoria to take pressure off capital cities. However, they just cannot compete with the large capital cities.

Only solution is a massive infrastructure spend
In my opinion, the only way the Australian government will solve the housing affordability challenge is through embarking on a massive infrastructure spend. Improved public transport, fast trains, better roads are some of the things that Australia needs. Essentially, they need to make it easier to live 30km to 100kms away from the CBD by reducing travel times.

For example, trains in France travel at speeds of up to 300km per hour. That means a train could travel from Melbourne to Geelong in approximately 16 minutes. Houses are a lot cheaper in Geelong compared to Melbourne – you can buy a large family home in a good suburb for under $1 million.

However, as noted above, Australia just doesn’t have enough taxpayers to fund this very costly infrastructure.

Australia has over $150bn invested in the Future Fund. These monies were quarantined to cover unfunded government superannuation liabilities – but the government has indicated that it doesn’t intend on drawing from the Fund for at least another 6 to 7 years. This means it will accumulate even more surplus monies (it currently has $14bn of surplus monies). Arguably, the government could draw on these funds to invest in Australia’s future (i.e. infrastructure projects) – preparing us for the next two to three decades i.e. let’s plan for the long term!

In any case, Australia’s geographical and infrastructural challenges are complex and very costly to solve. Australian governments have a long history of not planning for the long term and building outdated infrastructure (think NBN) So, I’m not optimistic of this challenge being addressed anytime soon.

Nothing beats proximity to CBD
I acknowledge tha

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Every few years The Economist magazine writes a story about how property in Australia is overvalued compared to other countries – or something to that effect. Comparing Australia with other countries is like comparing apples and oranges. Australia is just so different. But this difference creates opportunities for investors that play the long game. Let me explain.

Big country and not enough taxpayers
I recently spent a few weeks travelling around France. It is so easy to get around. Its roads are in very good condition and the trains are fast, efficient and on-time.

It is easy to overlook that France would fit into Australia 14 times and its population is over 3 times more than Australia (25 million versus 76 million people). On average, there are 122 French people per square kilometre of land. In Australia, it’s a measly 3 people per square kilometre (and in the USA, 33 people).

In Australia, we have too much land and not enough taxpayers to fund the construction and maintenance of adequate infrastructure. Therefore, in order to access good schools and universities, diverse employment opportunities, health facilities, amenities and lifestyle benefits, you must live close to or in a capital city. That’s why 60% of Australia’s population live in either Melbourne, Sydney, Brisbane or Perth. Whereas only just over 3% of France’s population lives in Paris. Living outside of Paris (in say Lyon or Toulouse) isn’t a big disadvantage. (BTW, I haven’t selected France for any particular reason – just using it as an example)

Australian federal and state governments have tried to promote regional centres such as Newcastle and Wollongong in NSW or Geelong and Bendigo in Victoria to take pressure off capital cities. However, they just cannot compete with the large capital cities.

Only solution is a massive infrastructure spend
In my opinion, the only way the Australian government will solve the housing affordability challenge is through embarking on a massive infrastructure spend. Improved public transport, fast trains, better roads are some of the things that Australia needs. Essentially, they need to make it easier to live 30km to 100kms away from the CBD by reducing travel times.

For example, trains in France travel at speeds of up to 300km per hour. That means a train could travel from Melbourne to Geelong in approximately 16 minutes. Houses are a lot cheaper in Geelong compared to Melbourne – you can buy a large family home in a good suburb for under $1 million.

However, as noted above, Australia just doesn’t have enough taxpayers to fund this very costly infrastructure.

Australia has over $150bn invested in the Future Fund. These monies were quarantined to cover unfunded government superannuation liabilities – but the government has indicated that it doesn’t intend on drawing from the Fund for at least another 6 to 7 years. This means it will accumulate even more surplus monies (it currently has $14bn of surplus monies). Arguably, the government could draw on these funds to invest in Australia’s future (i.e. infrastructure projects) – preparing us for the next two to three decades i.e. let’s plan for the long term!

In any case, Australia’s geographical and infrastructural challenges are complex and very costly to solve. Australian governments have a long history of not planning for the long term and building outdated infrastructure (think NBN) So, I’m not optimistic of this challenge being addressed anytime soon.

Nothing beats proximity to CBD
I acknowledge tha

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 97412e6c-bd9e-455a-9b94-811e3c05fa0e Wed, 26 Jun 2019 09:00:00 +1000 790 investopoly,wemyss,property investment,asset selection,investing,financial advice 1 73 false 11 important tactics to become 'loan ready' in this tight credit market 11 important tactics to become 'loan ready' in this tight credit market Over the past two years, I have highlighted how tight the credit (mortgage) market has become a couple of times. In the past, borrowing was simple. The bank would always offer you more than you wanted to borrow. You only had to provide a few documents and the money was yours!

Things have changed dramatically. These days, banks spend most of their time trying to look for reasons to decline a loan rather than approve it. It’s as if they don’t want the business! The onus is on the borrower to prove why they should approve the loan – you are guilty until proven innocent.

The other problem is that many bank employees are just too scared to use their discretion. As a result of closer scrutiny from the regulators and the Royal Commission, the banks significantly tightened credit policy. They also tightened their oversight of credit managers to the extent that they are now reluctant to move outside credit policy for fear being disciplined (e.g. loss of bonus or even job)! This creates perverse behaviour such as being highly pedantic, nonsensical and over-analysing due to fear of missing something.

In this new environment, borrowers are beggars, not choosers.

With this in mind I have listed 11 tactics you can employ to make you ‘loan ready’.

1. Start preparing 3 to 6 months out
My first tip is to start preparing for a loan application a minimum of 3 to 6 months in advance. Consider all the tactics I have listed below. If you need to take corrective action, you will have enough time to make any changes. Leaving things to the last minute might reduce the pool of lenders available to you.

2. Reduce discretionary spending three months out
The banks will not distinguish between discretionary and non-discretionary expenditure. They will trawl over your bank statements (3 months) to independently verify how much you spend each month and base the loan assessment on that number. Banks have asked questions about once-off transfers to family members, swimming lesson expenses, small charges by Uber Eats, ATM withdrawals at casinos, a Buck’s Night expense (!?) and so on. You would be flabbergasted by the detail they go into. They must spend hours looking at these things – inventing questions to ask! It is very pedantic and intrusive but unavoidable.

Therefore, to make it easier on yourself, minimise expenditure three months prior to lodging an application. Reduce as many discretionary expenses as possible. There are two benefits of doing this. Firstly, you will make the loan approval process a lot easier for yourself. Secondly, you might find it enlightening – allowing you to reset your spending habits.

If you have a high income, it might not be necessary to do this – consult with your mortgage broker (us) to ascertain how important this tactic is in your situation.

3. Control information flow
Having all your accounts with one bank probably makes things simpler and cleaner. However, it also means that bank knows everything about you. When lodging a mortgage application, banks will typically want to review your last 3 months of bank transaction statements (see item # 2 above). However, if you are an existing customer, it means the bank is able to see whatever history it wants. Keep this in mind.

If you want to control the information flow, then it’s wise to use a separate bank for your day-to-day transactions from the bank that holds your mortgages (or you plan to borrow from). Also refer to tip # 5 below.

4. Consider shifting loans onto different securities
Lenders borrowing capacities can vary a lot. One way to extend your borrowing capacity in this very tight credit market (assuming

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Over the past two years, I have highlighted how tight the credit (mortgage) market has become a couple of times. In the past, borrowing was simple. The bank would always offer you more than you wanted to borrow. You only had to provide a few documents and the money was yours!

Things have changed dramatically. These days, banks spend most of their time trying to look for reasons to decline a loan rather than approve it. It’s as if they don’t want the business! The onus is on the borrower to prove why they should approve the loan – you are guilty until proven innocent.

The other problem is that many bank employees are just too scared to use their discretion. As a result of closer scrutiny from the regulators and the Royal Commission, the banks significantly tightened credit policy. They also tightened their oversight of credit managers to the extent that they are now reluctant to move outside credit policy for fear being disciplined (e.g. loss of bonus or even job)! This creates perverse behaviour such as being highly pedantic, nonsensical and over-analysing due to fear of missing something.

In this new environment, borrowers are beggars, not choosers.

With this in mind I have listed 11 tactics you can employ to make you ‘loan ready’.

1. Start preparing 3 to 6 months out
My first tip is to start preparing for a loan application a minimum of 3 to 6 months in advance. Consider all the tactics I have listed below. If you need to take corrective action, you will have enough time to make any changes. Leaving things to the last minute might reduce the pool of lenders available to you.

2. Reduce discretionary spending three months out
The banks will not distinguish between discretionary and non-discretionary expenditure. They will trawl over your bank statements (3 months) to independently verify how much you spend each month and base the loan assessment on that number. Banks have asked questions about once-off transfers to family members, swimming lesson expenses, small charges by Uber Eats, ATM withdrawals at casinos, a Buck’s Night expense (!?) and so on. You would be flabbergasted by the detail they go into. They must spend hours looking at these things – inventing questions to ask! It is very pedantic and intrusive but unavoidable.

Therefore, to make it easier on yourself, minimise expenditure three months prior to lodging an application. Reduce as many discretionary expenses as possible. There are two benefits of doing this. Firstly, you will make the loan approval process a lot easier for yourself. Secondly, you might find it enlightening – allowing you to reset your spending habits.

If you have a high income, it might not be necessary to do this – consult with your mortgage broker (us) to ascertain how important this tactic is in your situation.

3. Control information flow
Having all your accounts with one bank probably makes things simpler and cleaner. However, it also means that bank knows everything about you. When lodging a mortgage application, banks will typically want to review your last 3 months of bank transaction statements (see item # 2 above). However, if you are an existing customer, it means the bank is able to see whatever history it wants. Keep this in mind.

If you want to control the information flow, then it’s wise to use a separate bank for your day-to-day transactions from the bank that holds your mortgages (or you plan to borrow from). Also refer to tip # 5 below.

4. Consider shifting loans onto different securities
Lenders borrowing capacities can vary a lot. One way to extend your borrowing capacity in this very tight credit market (assuming

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 2c78ed32-eebb-430e-97f9-5d7143272feb Wed, 19 Jun 2019 12:32:00 +1000 1097 investopoly,wemyss,mortgages,borrowing capacity,financial advice, 1 72 false What should you do about Labor's proposed tax policies? What should you do about Labor's proposed tax policies? Last week Jarrod McCabe and I recorded a presentation about the ALP's proposed changes to tax laws that impact investors. You can watch it here: https://www.prosolution.com.au/webinar-negative-gearing-replay/

In this week's podcast, I summaries answers to 5 questions we addresses:
  1. What is the impact on investors (in dollar terms)?
  2. What impact will these changes have on the property market - prior to 1 Jan and after?
  3. Is there anything existing property investors should do now?
  4. Will these changes get through parliament?
  5. Will these changes improve housing affordability?
  6. What can investors do to mitigate the impact of these changes?

Here's a link to chart 1.

Here's a link to chart 2.

I'm on leave for 3 weeks so there won't be any new podcasts over this time. Sorry.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Last week Jarrod McCabe and I recorded a presentation about the ALP's proposed changes to tax laws that impact investors. You can watch it here: https://www.prosolution.com.au/webinar-negative-gearing-replay/

In this week's podcast, I summaries answers to 5 questions we addresses:
  1. What is the impact on investors (in dollar terms)?
  2. What impact will these changes have on the property market - prior to 1 Jan and after?
  3. Is there anything existing property investors should do now?
  4. Will these changes get through parliament?
  5. Will these changes improve housing affordability?
  6. What can investors do to mitigate the impact of these changes?

Here's a link to chart 1.

Here's a link to chart 2.

I'm on leave for 3 weeks so there won't be any new podcasts over this time. Sorry.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 017d7b37-2b3e-48ea-a9ac-1a69e745d2ce Thu, 16 May 2019 10:00:00 +1000 1275 investopoly,wemyss,negative gearing,property investing,taxation,independent advice, 1 71 false Changes to capital gains tax are 5 times more costly than negative gearing Changes to capital gains tax are 5 times more costly than negative gearing The ALP’s proposed ban on negative gearing has been well publicised and debated. However, its proposed changes to Capital Gains Tax (CGT) have received far less attention. I suspect that this is because investors tend to overestimate short-term consequences and underestimate more significant long-term outcomes. But, since most of us are long-term investors, I’d suggest that we should adopt a more balanced view.

How does capital gain tax currently work?

At the moment, only 50% of the net capital gain is included with your other taxable income (except for companies which are not entitled to the 50% discount) if you have owned the asset for more than 12 months. The net capital gain (or loss) is calculated as follows:

Net sale proceeds – being sale price less any selling costs including agent fees and so on.
Less
Written-down acquisition cost – including purchase price, stamp duty, buyers’ agent fees, legal fees, inspection fees and so on; less any depreciation claimed in prior years.
Equals
Net gross capital gain (or loss). This amount is discounted by 50%. The discounted amount is then added to your income and taxed according to individual marginal rates.

What has the ALP proposed to change?

The ALP has announced that if it wins the election on 18 May, it will halve the CGT discount from 50% to 25%. This effectively increases that amount of tax you’ll pay by 50%.
For example, under current arrangements, only $50 of a $100 capital gain would be added to your taxable income. If you are on the highest marginal tax rate of 47%, you would pay $23.50 in tax. However, under the ALP’s proposed arrangement, $75 would be added to your taxable income and your tax payable would increase to $35.25 – an additional $11.75 or 50%.

These CGT changes apply to investments, including property and shares, purchased on or after 1 January 2020 (for property, this is likely to be based on contract date, not settlement date). All investments made prior to 1 January 2020 will be fully grandfathered and entitled to continue to claim the 50% CGT discount.

High growth assets will be impacted the most

Unlike the changes to negative gearing, these changes to CGT will impact property and share investors to a similar extent.

And investments that provide the majority of their total return in capital growth rather than income will be impacted the most by these changes. The two most popular (common) major asset classes are:

Direct property
According to REIA data, the average compounding capital growth rate of Australia’s five largest capital cities since 1980 is 7.2% p.a. Investment-grade properties should generate a higher growth rate (than the median).

However, property tends to generate only a small amount of income. Whilst gross rental yields can range from 2% and 5% p.a., after an investor pays for expenses such as management fees, maintenance, insurance, water and so on, the net rental yield is a lot lower – probably under 2% p.a. in most circumstances. In summary, property typically provides circa 80% of its total return in capital appreciate and 20% in income.

International shares
International equities also provide most of its return in capital growth. The MSCI World Index has appreciated in value by 7.83% between December 1987 when it began and March 2019. The average annual dividend yield of this index is currently only slightly above 2%. So, international investments also provide 80% of total return in growth and 20% in income.

It is interesting to note however that Australian shares generate a lot more income. A

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> The ALP’s proposed ban on negative gearing has been well publicised and debated. However, its proposed changes to Capital Gains Tax (CGT) have received far less attention. I suspect that this is because investors tend to overestimate short-term consequences and underestimate more significant long-term outcomes. But, since most of us are long-term investors, I’d suggest that we should adopt a more balanced view.

How does capital gain tax currently work?

At the moment, only 50% of the net capital gain is included with your other taxable income (except for companies which are not entitled to the 50% discount) if you have owned the asset for more than 12 months. The net capital gain (or loss) is calculated as follows:

Net sale proceeds – being sale price less any selling costs including agent fees and so on.
Less
Written-down acquisition cost – including purchase price, stamp duty, buyers’ agent fees, legal fees, inspection fees and so on; less any depreciation claimed in prior years.
Equals
Net gross capital gain (or loss). This amount is discounted by 50%. The discounted amount is then added to your income and taxed according to individual marginal rates.

What has the ALP proposed to change?

The ALP has announced that if it wins the election on 18 May, it will halve the CGT discount from 50% to 25%. This effectively increases that amount of tax you’ll pay by 50%.
For example, under current arrangements, only $50 of a $100 capital gain would be added to your taxable income. If you are on the highest marginal tax rate of 47%, you would pay $23.50 in tax. However, under the ALP’s proposed arrangement, $75 would be added to your taxable income and your tax payable would increase to $35.25 – an additional $11.75 or 50%.

These CGT changes apply to investments, including property and shares, purchased on or after 1 January 2020 (for property, this is likely to be based on contract date, not settlement date). All investments made prior to 1 January 2020 will be fully grandfathered and entitled to continue to claim the 50% CGT discount.

High growth assets will be impacted the most

Unlike the changes to negative gearing, these changes to CGT will impact property and share investors to a similar extent.

And investments that provide the majority of their total return in capital growth rather than income will be impacted the most by these changes. The two most popular (common) major asset classes are:

Direct property
According to REIA data, the average compounding capital growth rate of Australia’s five largest capital cities since 1980 is 7.2% p.a. Investment-grade properties should generate a higher growth rate (than the median).

However, property tends to generate only a small amount of income. Whilst gross rental yields can range from 2% and 5% p.a., after an investor pays for expenses such as management fees, maintenance, insurance, water and so on, the net rental yield is a lot lower – probably under 2% p.a. in most circumstances. In summary, property typically provides circa 80% of its total return in capital appreciate and 20% in income.

International shares
International equities also provide most of its return in capital growth. The MSCI World Index has appreciated in value by 7.83% between December 1987 when it began and March 2019. The average annual dividend yield of this index is currently only slightly above 2%. So, international investments also provide 80% of total return in growth and 20% in income.

It is interesting to note however that Australian shares generate a lot more income. A

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 85034042-045e-4b7f-aee9-f6900af2f4a9 Thu, 09 May 2019 10:00:00 +1000 899 wemyss,investopoly,CGT,Negative gearing,Taxation,Independent advice, 1 70 false The importance of receiving advice without boarders The importance of receiving advice without boarders Different professionals are able to give advice about a specific field – but who’s taking responsibility for looking at the big picture? How do you know if opportunities are slipping between the gaps? What if you have an issue/problem/question that bleeds over a few different fields?

Firstly, it is important to understand the what different professionals can and cannot talk about (by law).

Mortgage advice
To give advice about a mortgage, borrowing capacity, interest rates, products and so on the professional must hold an Australian Credit License (or be an authorised representative of an ACL holder). You can search ASIC’s register of credit representatives here.

Tax advice
Anyone that provides tax agent services (tax advice, lodge tax returns, etc.) for a fee must be registered with the Tax Practitioners Board. You might find that some well-meaning professionals (such as mortgage brokers or buyer’s agents) offer you tax advice or express an opinion about how an item should be treated for taxation purposes, but you should always confirm this advice with a Registered Tax Agent. You can search the Tax Agents register here.

Financial advice
To be able to provide financial advice, you must hold an Australia Financial Services License (AFSL) or be an authorised representative of a holder. Financial advice includes cash flow management/budgeting, investing in shares, superannuation, retirement planning, estate planning, risk management and so on. I have written previously about the importance of selecting a truly independent advisor. You can search the AFSL register here.

Property advice
A person cannot recommend and help you purchase a property unless they are a licensed real estate agent. Licensing is State based and this page provides a good summary including links to registers. General property investment advice is completely unregulated and I have written about why this is a problem in The Australian here. Therefore, if you are paying for property advice, be very careful.

Insurance advice
Many financial advisors also provide insurance advice. However, sometimes professionals are insurance advisors only i.e. they have a limited AFSL.

What can and cannot be covered…
Therefore, mortgage brokers can only give advice about credit (mortgage) products, not cash flow or taxation matters.

Tax agents can only give you tax advice and cannot comment on cash flow, investments, mortgages, superannuation and so on.

A financial planner can't talk about tax consequences or give you borrowing advice unless they hold the appropriate licenses.

The problem is many financial decisions are interrelated
Many financial decisions cross over multiple fields and require input from various professionals to ensure you arrive at a thoroughly well-considered conclusion. Take the decision to upgrade or downsize your family home for instance. Whether to do this and at what budget would include borrowing considerations (mortgage broker), cash flow and retirement

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Different professionals are able to give advice about a specific field – but who’s taking responsibility for looking at the big picture? How do you know if opportunities are slipping between the gaps? What if you have an issue/problem/question that bleeds over a few different fields?

Firstly, it is important to understand the what different professionals can and cannot talk about (by law).

Mortgage advice
To give advice about a mortgage, borrowing capacity, interest rates, products and so on the professional must hold an Australian Credit License (or be an authorised representative of an ACL holder). You can search ASIC’s register of credit representatives here.

Tax advice
Anyone that provides tax agent services (tax advice, lodge tax returns, etc.) for a fee must be registered with the Tax Practitioners Board. You might find that some well-meaning professionals (such as mortgage brokers or buyer’s agents) offer you tax advice or express an opinion about how an item should be treated for taxation purposes, but you should always confirm this advice with a Registered Tax Agent. You can search the Tax Agents register here.

Financial advice
To be able to provide financial advice, you must hold an Australia Financial Services License (AFSL) or be an authorised representative of a holder. Financial advice includes cash flow management/budgeting, investing in shares, superannuation, retirement planning, estate planning, risk management and so on. I have written previously about the importance of selecting a truly independent advisor. You can search the AFSL register here.

Property advice
A person cannot recommend and help you purchase a property unless they are a licensed real estate agent. Licensing is State based and this page provides a good summary including links to registers. General property investment advice is completely unregulated and I have written about why this is a problem in The Australian here. Therefore, if you are paying for property advice, be very careful.

Insurance advice
Many financial advisors also provide insurance advice. However, sometimes professionals are insurance advisors only i.e. they have a limited AFSL.

What can and cannot be covered…
Therefore, mortgage brokers can only give advice about credit (mortgage) products, not cash flow or taxation matters.

Tax agents can only give you tax advice and cannot comment on cash flow, investments, mortgages, superannuation and so on.

A financial planner can't talk about tax consequences or give you borrowing advice unless they hold the appropriate licenses.

The problem is many financial decisions are interrelated
Many financial decisions cross over multiple fields and require input from various professionals to ensure you arrive at a thoroughly well-considered conclusion. Take the decision to upgrade or downsize your family home for instance. Whether to do this and at what budget would include borrowing considerations (mortgage broker), cash flow and retirement

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss abf32e4e-51d4-41de-9b0f-299958d4c574 Thu, 02 May 2019 10:24:00 +1000 795 investopoly,wemyss,financial advice,independent advice,prosolution, 1 69 false Commonly missed investment property tax deductions Commonly missed investment property tax deductions An investment property should be selected based on the likelihood of it generating strong capital growth rather than secondary benefits such as rental yield or negative gearing. However, saying that, this doesn’t mean we shouldn’t maximise the gearing benefits of your current or future investment property to save on tax! So, if you’re looking to purchase an investment property or currently have one, these are some commonly missed methods/deductions that will help you get the most from your investment property:

1. Depreciation schedules
Claiming depreciation and the associated capital works deductions is a significant taxation benefit, and one which many property investors are unaware of. Depreciation is a non-cash deduction meaning you do not need to spend any money to claim it.

As your property ages and items within it wear, they depreciate in value. The ATO allows deductions for this wear and tear. Deductions can be claimed on the building's structure and items considered permanently fixed to the property. Further deductions can also be claimed on the plant and equipment assets contained within it.
To claim depreciation deductions, property investors need to engage a specialist Quantity Surveyor to complete a capital allowances and tax depreciation report. When completed, the report outlines the deductions available for both capital works and plant and equipment items on an income producing property and is used each financial year when preparing tax returns. The cost of obtaining this report is also tax deductible.

Click here for an update to the depreciation laws since this blog was published.

2. Prepay interest
If you anticipate your income to substantially decrease in the next financial year due to factors such as maternity leave or redundancy, prepaying your interest in the current financial year will allow you to reduce your current higher taxable income – maximising your tax savings.

3. Statement of adjustments
The purpose of the Statement of Adjustments is to calculate the exact amount the Purchaser will need to reimburse the Vendor on the day of settlement for the property’s annual costs already paid by the vendor for the remainder of the year. These expenses can include, but are not limited to council rates, water rates and body corporate fees. Many property investors are unaware of these expenses paid upon settlement and are usually missed as a rental expense within the first year when the property is acquired.

4. Borrowing expenses
The cost of establishing a loan can sometimes be quite substantial with some loan establishment fees costing in excess of $2,000. These costs are more often than not missed as it forms part of the loan proceeds and let’s face it - we’re always more interested with the interest expense rather than the menial bank charges!

5. Waiting until tax time to get a refund
Many employees don’t realise that they are entitled to vary the tax subtracted from their salary to ease the cash flow burden of investing in property (called PAYG withholding variation). This means you can enjoy the cash flow savings sooner – rather than waiting until the end of the financial year.

Of course, there are more…

The above is not an exhaustive list of investment property deductions – just a handful of the deductions I have found are commonly missed. Of course, there are many more expenses that can be claimed to help reduce the tax you pay. The ATO produce a guide each year to help investors bu

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> An investment property should be selected based on the likelihood of it generating strong capital growth rather than secondary benefits such as rental yield or negative gearing. However, saying that, this doesn’t mean we shouldn’t maximise the gearing benefits of your current or future investment property to save on tax! So, if you’re looking to purchase an investment property or currently have one, these are some commonly missed methods/deductions that will help you get the most from your investment property:

1. Depreciation schedules
Claiming depreciation and the associated capital works deductions is a significant taxation benefit, and one which many property investors are unaware of. Depreciation is a non-cash deduction meaning you do not need to spend any money to claim it.

As your property ages and items within it wear, they depreciate in value. The ATO allows deductions for this wear and tear. Deductions can be claimed on the building's structure and items considered permanently fixed to the property. Further deductions can also be claimed on the plant and equipment assets contained within it.
To claim depreciation deductions, property investors need to engage a specialist Quantity Surveyor to complete a capital allowances and tax depreciation report. When completed, the report outlines the deductions available for both capital works and plant and equipment items on an income producing property and is used each financial year when preparing tax returns. The cost of obtaining this report is also tax deductible.

Click here for an update to the depreciation laws since this blog was published.

2. Prepay interest
If you anticipate your income to substantially decrease in the next financial year due to factors such as maternity leave or redundancy, prepaying your interest in the current financial year will allow you to reduce your current higher taxable income – maximising your tax savings.

3. Statement of adjustments
The purpose of the Statement of Adjustments is to calculate the exact amount the Purchaser will need to reimburse the Vendor on the day of settlement for the property’s annual costs already paid by the vendor for the remainder of the year. These expenses can include, but are not limited to council rates, water rates and body corporate fees. Many property investors are unaware of these expenses paid upon settlement and are usually missed as a rental expense within the first year when the property is acquired.

4. Borrowing expenses
The cost of establishing a loan can sometimes be quite substantial with some loan establishment fees costing in excess of $2,000. These costs are more often than not missed as it forms part of the loan proceeds and let’s face it - we’re always more interested with the interest expense rather than the menial bank charges!

5. Waiting until tax time to get a refund
Many employees don’t realise that they are entitled to vary the tax subtracted from their salary to ease the cash flow burden of investing in property (called PAYG withholding variation). This means you can enjoy the cash flow savings sooner – rather than waiting until the end of the financial year.

Of course, there are more…

The above is not an exhaustive list of investment property deductions – just a handful of the deductions I have found are commonly missed. Of course, there are many more expenses that can be claimed to help reduce the tax you pay. The ATO produce a guide each year to help investors bu

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 2eb1789f-d90b-4eea-9ba3-de6f3d59b826 Fri, 26 Apr 2019 12:28:00 +1000 502 wemyss,tax,property investing,investopoly,taxation,save tax, 1 68 false Understanding property growth, markets and being strategic Understanding property growth, markets and being strategic Understanding how property growth behaves is critical when making buy, hold or sell investment decisions. Unfortunately, I have seen lots of people make terrible decisions based on misinformation or misunderstanding. Therefore, if you are a property investor, you must understand this concept. And if you are an investor with a low asset base, you can use this knowledge to your advantage.

History always leaves clues

I’m a big proponent of evidence-based investing because it removes a lot of risk. Evidenced-based investing involves only adopting methodologies, approaches or investing in assets where there is overwhelming evidence that demonstrates it works. No throwing darts. Only invest in sure-things.

Below I have set out a few examples of property growth both for individual properties and markets.

Individual examples of property growth

The chart below (click to enlarge) sets out the sales of an apartment in Richmond, Victoria between 1985 and 2019. As you can see, there was very little growth between 1985 and 1997 and very strong growth between 1997 and 2010. The average growth over the whole 25 years period averages out at over 8.8% p.a. – which is pretty respectable. This is a very good example of how property behaves i.e. it grows in cycles lasting 5 to 10 years followed by a flat cycle. Click here for an example of a house in Carlton that I cited in another blog that also illustrated this concept.


I appreciate that this data isn’t statistically significant, because it’s only a couple of properties. However, after 17 years of looking at property growth on almost a daily basis, I can assure you that this growth is indicative of how the vast majority of investment-grade property behaves over long period of time.

Example of state-based growth

The chart below (click to enlarge) sets out the distribution of median house price growth since 1980. You will notice that a growth cycle typically lasts 7 to 10 years. And a growth phase is typically followed by a period of (7-10 years) of little growth. The average growth rate over the past 38 years of each capital city ranges between 7.30% and 7.96% p.a. That is, in the long-run, there is not a large variation.


Understanding the market and its performance

When assessing an investment property’s historical performance, it is important to ascertain whether it is due to asset-specific or market-wide influences. For example, I know that investment-grade apartments in Melbourne have not performed well over the past 7 to 10 years – as perfectly depicted by the Leslie Street chart above. Therefore, investors must consider this when assessing the performance of their assets. For example, if you purchased a quality apartment in Melbourne 5 years ago and haven’t enjoyed much capital growth, it is possible that you have a perfect (investment-grade) asset, but you just haven’t held it long enough yet. That is, no growth is a market-wide phenomenon, not asset-specific.

But you can’t have blind faith in the headline numbers. You must understand what has driven performance. Using investment-grade apartments in Melbourne as an example, these are some of the things I would consider when looking at recent

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Understanding how property growth behaves is critical when making buy, hold or sell investment decisions. Unfortunately, I have seen lots of people make terrible decisions based on misinformation or misunderstanding. Therefore, if you are a property investor, you must understand this concept. And if you are an investor with a low asset base, you can use this knowledge to your advantage.

History always leaves clues

I’m a big proponent of evidence-based investing because it removes a lot of risk. Evidenced-based investing involves only adopting methodologies, approaches or investing in assets where there is overwhelming evidence that demonstrates it works. No throwing darts. Only invest in sure-things.

Below I have set out a few examples of property growth both for individual properties and markets.

Individual examples of property growth

The chart below (click to enlarge) sets out the sales of an apartment in Richmond, Victoria between 1985 and 2019. As you can see, there was very little growth between 1985 and 1997 and very strong growth between 1997 and 2010. The average growth over the whole 25 years period averages out at over 8.8% p.a. – which is pretty respectable. This is a very good example of how property behaves i.e. it grows in cycles lasting 5 to 10 years followed by a flat cycle. Click here for an example of a house in Carlton that I cited in another blog that also illustrated this concept.


I appreciate that this data isn’t statistically significant, because it’s only a couple of properties. However, after 17 years of looking at property growth on almost a daily basis, I can assure you that this growth is indicative of how the vast majority of investment-grade property behaves over long period of time.

Example of state-based growth

The chart below (click to enlarge) sets out the distribution of median house price growth since 1980. You will notice that a growth cycle typically lasts 7 to 10 years. And a growth phase is typically followed by a period of (7-10 years) of little growth. The average growth rate over the past 38 years of each capital city ranges between 7.30% and 7.96% p.a. That is, in the long-run, there is not a large variation.


Understanding the market and its performance

When assessing an investment property’s historical performance, it is important to ascertain whether it is due to asset-specific or market-wide influences. For example, I know that investment-grade apartments in Melbourne have not performed well over the past 7 to 10 years – as perfectly depicted by the Leslie Street chart above. Therefore, investors must consider this when assessing the performance of their assets. For example, if you purchased a quality apartment in Melbourne 5 years ago and haven’t enjoyed much capital growth, it is possible that you have a perfect (investment-grade) asset, but you just haven’t held it long enough yet. That is, no growth is a market-wide phenomenon, not asset-specific.

But you can’t have blind faith in the headline numbers. You must understand what has driven performance. Using investment-grade apartments in Melbourne as an example, these are some of the things I would consider when looking at recent

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 31571023-3d2f-4fc3-83c8-7d25a973b872 Thu, 18 Apr 2019 13:59:00 +1000 1634 investopoly,wemyss,property growth,property investing,investment strategy,independent advice 1 67 false This is your biggest Achilles heel... and two ways how to avoid it This is your biggest Achilles heel... and two ways how to avoid it “First rule of business is never get emotional about stock, clouds the judgment.”
Gordon Gekko, from the movie Wall Street

The quote above is from the fictional character, Gordon Gekko from the legendary 1987 movie, Wall Street. The challenge he was alluding to is the fact that it’s impossible to have a completely impartial lens when making financial decisions. There are many reasons for this.

Firstly, it’s our money, we worked hard for it and we don’t want to make a mistake and lose it. I have observed marriages dissolve because of financial losses. It’s a big deal and a lot is at stake.

Secondly, we tell ourselves stories about money. These stories have been shaped over many years by our upbringing, culture and personal experiences. Stories like money is evil, money is a measure of success, it’s hard to make money from investing, money changes people, money will solve all my problems, money makes me feel safe and so on.

The sun is smaller than it looks

Have you ever taken a photo of a sunset or landmark and been surprised how small it looks in the photo compared to the naked eye? The reason is because our brains play a trick on us… it’s an optical illusion. Our brain makes us see something that’s not real. Here are some explanations why this happens – although it’s not important for this blog – I’m merely making the point that sometimes we see what we want to see. Our impression of “reality” is shaped by our beliefs.

My observations over the past 17 years

I agree with Gordon Gekko that emotions are rarely a useful human behaviour when it comes to making financial decisions. They distort our views and can cause us to make expensive mistakes. In my experience, emotions can cause a few common errors including:

§ Overthinking – it might sound a bit perverse, but you can overthink financial decisions. The problem with overthinking is that you start to explore every possible outcome and add too much weight to outcomes that are very unlikely to occur – almost so remote that they do not really warrant any attention or consideration. This can cause people to jump at shadows.
§ Blind to risk – sometimes we want something to be true so much that we irrationally ignore any evidence to the contrary. This often happens when people decide to invest in a certain asset. At that time, they almost have rose coloured glasses and can’t see any risks or flaws. This is a very risky mindset.
§ Paralysed by the fear of making a mistake – this is particularly common for people closer to retirement. They know they need to have an investment strategy and they also know that they don’t have any room (time) for error. As a result, they feel so anxious about making a mistake that they find it very hard to see what might be in front of their eyes. Similarly, people that have lost a lot of money on past investments can also be unduly influenced by fear. They become overcautious – not recognising that their past mistakes were caused by breaching investment fundamentals. They have a high level of nervousness even when a prospective investment is fundamentally sound.
§ Overconfidence – how can you expect to be an expert at something without acquiring many hours, weeks, months and years of experience? When it comes to finance, it is important to be consciously incompetent i.e. don’t think you know everything. Because you only have to be a little wrong to completely ruin an investment. And often, mistakes are not obvious (to non-professionals) at the outset. Arrogance is

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> “First rule of business is never get emotional about stock, clouds the judgment.”
Gordon Gekko, from the movie Wall Street

The quote above is from the fictional character, Gordon Gekko from the legendary 1987 movie, Wall Street. The challenge he was alluding to is the fact that it’s impossible to have a completely impartial lens when making financial decisions. There are many reasons for this.

Firstly, it’s our money, we worked hard for it and we don’t want to make a mistake and lose it. I have observed marriages dissolve because of financial losses. It’s a big deal and a lot is at stake.

Secondly, we tell ourselves stories about money. These stories have been shaped over many years by our upbringing, culture and personal experiences. Stories like money is evil, money is a measure of success, it’s hard to make money from investing, money changes people, money will solve all my problems, money makes me feel safe and so on.

The sun is smaller than it looks

Have you ever taken a photo of a sunset or landmark and been surprised how small it looks in the photo compared to the naked eye? The reason is because our brains play a trick on us… it’s an optical illusion. Our brain makes us see something that’s not real. Here are some explanations why this happens – although it’s not important for this blog – I’m merely making the point that sometimes we see what we want to see. Our impression of “reality” is shaped by our beliefs.

My observations over the past 17 years

I agree with Gordon Gekko that emotions are rarely a useful human behaviour when it comes to making financial decisions. They distort our views and can cause us to make expensive mistakes. In my experience, emotions can cause a few common errors including:

§ Overthinking – it might sound a bit perverse, but you can overthink financial decisions. The problem with overthinking is that you start to explore every possible outcome and add too much weight to outcomes that are very unlikely to occur – almost so remote that they do not really warrant any attention or consideration. This can cause people to jump at shadows.
§ Blind to risk – sometimes we want something to be true so much that we irrationally ignore any evidence to the contrary. This often happens when people decide to invest in a certain asset. At that time, they almost have rose coloured glasses and can’t see any risks or flaws. This is a very risky mindset.
§ Paralysed by the fear of making a mistake – this is particularly common for people closer to retirement. They know they need to have an investment strategy and they also know that they don’t have any room (time) for error. As a result, they feel so anxious about making a mistake that they find it very hard to see what might be in front of their eyes. Similarly, people that have lost a lot of money on past investments can also be unduly influenced by fear. They become overcautious – not recognising that their past mistakes were caused by breaching investment fundamentals. They have a high level of nervousness even when a prospective investment is fundamentally sound.
§ Overconfidence – how can you expect to be an expert at something without acquiring many hours, weeks, months and years of experience? When it comes to finance, it is important to be consciously incompetent i.e. don’t think you know everything. Because you only have to be a little wrong to completely ruin an investment. And often, mistakes are not obvious (to non-professionals) at the outset. Arrogance is

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss af7511ae-8f52-47d2-836a-a781a9ba5af3 Thu, 11 Apr 2019 10:00:00 +1000 828 investpoly,wemyss,prosolutuion,financial planning,emotions and money, 1 66 false 5 things you can do to prepare for the negative gearing ban (and should you invest before 2020?) 5 things you can do to prepare for the negative gearing ban (and should you invest before 2020?) The ALP announced on Friday (29/3/19) that it will ban negative gearing from 1 January 2020 if it wins the election next month. I wrote an article for The Australian newspaper over the weekend which addresses the steps property investors can take to fortify their investments (which I list below). A number of people have asked me whether they should invest in property prior to 1 January 2020. I discuss this too.

We still have a long way to go

Of course, the ALP has to win the election before it can ban negative gearing. I acknowledge that virtually every poll predicts an ALP victory. But John Howard didn’t poll very well leading up to his 1996 election win. And who would have thought Mr Trump would become President of the USA! So, anything can happen.

Secondly, it will depend on how strong their win is and whether they have a large majority or not. If it’s a tight win, they may have to negotiate with minor parties to get its law enacted and, as a result, water down its change to negative gearing e.g. limit it rather than an outright ban.

And finally, we have not seen the draft legislation yet. All the ALP has said is they will be negative gearing if people invest in established property or shares after 1 January 2020. Back in 1985 when the Hawke government banned negative gearing, people used unit trusts to invest in property. They borrowed to buy the units and as such were able to continue to negatively gear the property. So, there could be workarounds.

What should (existing) property investors consider doing?

There is a risk that the ban on negative gearing will put further downward pressure on property values in 2020. Owning an investment property in a falling market can be a double-whammy. Not only is your asset value falling, but you have to put your hand in your pocket each month to contribute towards the holding costs (if the net rental income isn’t enough to meet the loan repayments). Here are some of the steps you can consider taking:

1. Reduce holding costs – fix your interest rate
Many lenders are offering 3 years fixed rates at levels below variable interest rates, particularly if your loan repayments are structured as interest only. This may help reduce the monthly holding costs and you could still be better off on a fixed rate because, even if the RBA does cut rates this year, there’s no guarantees the banks will pass it on. See more from my blog a few week’s ago.

2. Make any changes to mortgages prior to 2020
If values do fall further as predicted, now might be a good time to lock in access to available equity. This involves increasing your loan’s credit limit to up to 80 percent of the current value of your investment property. This will give you access to additional credit for emergencies (i.e. a financial buffer) or future investment purposes. This equity may not be available in the future if bank valuations fall after 1 January 2020.

3. Divest of underperforming properties in 2019
I expect that some property types and locations will be more exposed to changes in negative gearing. For example, locations or buildings that are dominated by investor-owners could be at greater risk compared to locations with a more normalised number of owner-occupiers. In addition, the types of properties that have historically been marketed to investors primarily because of the tax benefits they generate (such as depreciation and negative gearing) will almost certainly be negatively impacted.
If

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> The ALP announced on Friday (29/3/19) that it will ban negative gearing from 1 January 2020 if it wins the election next month. I wrote an article for The Australian newspaper over the weekend which addresses the steps property investors can take to fortify their investments (which I list below). A number of people have asked me whether they should invest in property prior to 1 January 2020. I discuss this too.

We still have a long way to go

Of course, the ALP has to win the election before it can ban negative gearing. I acknowledge that virtually every poll predicts an ALP victory. But John Howard didn’t poll very well leading up to his 1996 election win. And who would have thought Mr Trump would become President of the USA! So, anything can happen.

Secondly, it will depend on how strong their win is and whether they have a large majority or not. If it’s a tight win, they may have to negotiate with minor parties to get its law enacted and, as a result, water down its change to negative gearing e.g. limit it rather than an outright ban.

And finally, we have not seen the draft legislation yet. All the ALP has said is they will be negative gearing if people invest in established property or shares after 1 January 2020. Back in 1985 when the Hawke government banned negative gearing, people used unit trusts to invest in property. They borrowed to buy the units and as such were able to continue to negatively gear the property. So, there could be workarounds.

What should (existing) property investors consider doing?

There is a risk that the ban on negative gearing will put further downward pressure on property values in 2020. Owning an investment property in a falling market can be a double-whammy. Not only is your asset value falling, but you have to put your hand in your pocket each month to contribute towards the holding costs (if the net rental income isn’t enough to meet the loan repayments). Here are some of the steps you can consider taking:

1. Reduce holding costs – fix your interest rate
Many lenders are offering 3 years fixed rates at levels below variable interest rates, particularly if your loan repayments are structured as interest only. This may help reduce the monthly holding costs and you could still be better off on a fixed rate because, even if the RBA does cut rates this year, there’s no guarantees the banks will pass it on. See more from my blog a few week’s ago.

2. Make any changes to mortgages prior to 2020
If values do fall further as predicted, now might be a good time to lock in access to available equity. This involves increasing your loan’s credit limit to up to 80 percent of the current value of your investment property. This will give you access to additional credit for emergencies (i.e. a financial buffer) or future investment purposes. This equity may not be available in the future if bank valuations fall after 1 January 2020.

3. Divest of underperforming properties in 2019
I expect that some property types and locations will be more exposed to changes in negative gearing. For example, locations or buildings that are dominated by investor-owners could be at greater risk compared to locations with a more normalised number of owner-occupiers. In addition, the types of properties that have historically been marketed to investors primarily because of the tax benefits they generate (such as depreciation and negative gearing) will almost certainly be negatively impacted.
If

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 052a5f98-77f1-42b5-b499-9f1bd52edd2d Wed, 03 Apr 2019 11:00:00 +1100 1084 investopoly,wemyss,negative gearing,property investing,tax planning 1 65 false The importance of becoming more professional with your approach to investing The importance of becoming more professional with your approach to investing I’m a huge fan of Seth Godin’s work. He’s a presenter, author and entrepreneur and if you have any interest in marketing or business, you must subscribe to his daily blog. Anyway, his recent blog about the difference between an amateur and professional got me thinking. I think many of us could benefit from approaching our finances more professionally.

The different between a professional and amateur

Often, a professional investor such as a fund manager approaches investing a lot differently than an amateur investor. I have listed some of these differences below to highlight this point.

Professional
– Understands that making investment decisions requires experience, education and understanding the market
– Seeks out experts in their field and is willing to pay a fair fee for their advice
– Will have a methodology for hiring and firing advice professionals – a clear list of things they want and want to avoid, thorough methodology, etc.
– Will hold their advisors accountable for producing results
– Won’t try and take on a task that is outside their sphere of experience
– They make investment decisions on a daily basis
– Will take almost any steps to ensure the risk of losing capital is low or non-existent.

Amateur
– Has no metric or methodology for measuring the value of advice
– Asks friends or colleagues for advice
– Is prepared to have a go at trying to do it themselves before asking for help
– Considers it a saving if he works it all out himself and therefore don’t need to pay anyone for advice
– To some extent, is guided by emotions e.g. it feels right, falls in love with the potential returns, etc.
– Gets seduced by investment returns and doesn’t adequately consider (and mitigate) investment risks
– Doesn’t realise the danger of their lack of experience
– Makes a handful (or less) of investment decisions over their lifetime.
– Its prepared to make a mistake i.e. learn through trial and error.

But we don’t compromise on some things…

Imagine how you would react if your friend told you that he did his spouses dentistry work. Or wrote their own will. Almost all of us understand the perils (stupidity) of this and wouldn’t even consider trying. Instead, we find a professional than we respect and trust because we have what phycologists refer to as conscious incompetence. That is, we know that we have a deficit of knowledge and experience to do it ourselves.

Your responsibility is to manage the people that manage the money

Just because you can do your own financial planning, taxation, loan structuring – it doesn’t mean you should. More importantly, maybe you have misunderstood your role. Your role is to not figure it all out yourself. That is potentially way too costly in the long run. Instead, your role is to hire the best people you can afford to help you make the smartest possible decisions. It’s what we all do in other areas of our life. It’s what successful professional investors do too.
Use a professional lends when selecting the right people to have on your team

In order to do this successfully, you have to have a robust methodology for selecting the right professionals. Here are some of the things I consider when selecting other professionals that help my clients.

1. How do they make money?
It’s important

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> I’m a huge fan of Seth Godin’s work. He’s a presenter, author and entrepreneur and if you have any interest in marketing or business, you must subscribe to his daily blog. Anyway, his recent blog about the difference between an amateur and professional got me thinking. I think many of us could benefit from approaching our finances more professionally.

The different between a professional and amateur

Often, a professional investor such as a fund manager approaches investing a lot differently than an amateur investor. I have listed some of these differences below to highlight this point.

Professional
– Understands that making investment decisions requires experience, education and understanding the market
– Seeks out experts in their field and is willing to pay a fair fee for their advice
– Will have a methodology for hiring and firing advice professionals – a clear list of things they want and want to avoid, thorough methodology, etc.
– Will hold their advisors accountable for producing results
– Won’t try and take on a task that is outside their sphere of experience
– They make investment decisions on a daily basis
– Will take almost any steps to ensure the risk of losing capital is low or non-existent.

Amateur
– Has no metric or methodology for measuring the value of advice
– Asks friends or colleagues for advice
– Is prepared to have a go at trying to do it themselves before asking for help
– Considers it a saving if he works it all out himself and therefore don’t need to pay anyone for advice
– To some extent, is guided by emotions e.g. it feels right, falls in love with the potential returns, etc.
– Gets seduced by investment returns and doesn’t adequately consider (and mitigate) investment risks
– Doesn’t realise the danger of their lack of experience
– Makes a handful (or less) of investment decisions over their lifetime.
– Its prepared to make a mistake i.e. learn through trial and error.

But we don’t compromise on some things…

Imagine how you would react if your friend told you that he did his spouses dentistry work. Or wrote their own will. Almost all of us understand the perils (stupidity) of this and wouldn’t even consider trying. Instead, we find a professional than we respect and trust because we have what phycologists refer to as conscious incompetence. That is, we know that we have a deficit of knowledge and experience to do it ourselves.

Your responsibility is to manage the people that manage the money

Just because you can do your own financial planning, taxation, loan structuring – it doesn’t mean you should. More importantly, maybe you have misunderstood your role. Your role is to not figure it all out yourself. That is potentially way too costly in the long run. Instead, your role is to hire the best people you can afford to help you make the smartest possible decisions. It’s what we all do in other areas of our life. It’s what successful professional investors do too.
Use a professional lends when selecting the right people to have on your team

In order to do this successfully, you have to have a robust methodology for selecting the right professionals. Here are some of the things I consider when selecting other professionals that help my clients.

1. How do they make money?
It’s important

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss a5125a78-7b06-4f96-8215-07a0039b08b5 Thu, 28 Mar 2019 09:30:00 +1100 894 investopoly,wemyss,financial planning,selecting advsiors,professional investor 1 64 false Where are interest rates heading and what should you do? Where are interest rates heading and what should you do? For many Australian’s, their home loan is their largest expense. And property investors should seek to minimise their borrowing costs (interest) as it’s one of the top three factors that directly impacts investment success as outlined in this blog. With this in mind, I thought it was timely to look at the current opportunities in the mortgage/interest rate market.

What the “market” is expecting

As the chart below illustrates, the implied yield on 30-day cash rate futures suggests that the market expects the cash rate to be 0.25% lower in the second half of 2019. These future contracts are used primarily by large institutions and banks and essentially represent the consensus view on the direction of interest rates in the short term (i.e. next 18 months). Of course, the market is not always right – it’s only one indicator.


Economist predictions

Bill Evans, the Chief Economist for Westpac, was the first to predict that the RBA will cut its cash rate twice in 2019 (0.25% in August and then again in November). Since making this prediction on 20 February 2019, many other economists have joined him. Mr Evans was the first economist to correctly predict the start of the RBA’s easing cycle in 2011 – so he has good form.

Mr Evans cited weaker than expected GDP growth, the “wealth effect”[1] associated with a softer property market and an expected increase in our savings rate as the main reasons for forming his view.

What would have to happen for the RBA to cut

The RBA has previously said on a number of occasions that it is not concerned by the falling house prices. This commentary has never made sense to me because a falling property market definitely impacts on consumer confidence – look at what happened in the USA when the GCF hit. Perhaps the RBA was hoping its positive rhetoric would persuade Australian’s to ignore the wealth effect. However, in the last few weeks the RBA has changed its tune and acknowledge the risk that a soft property market might have on the wider economy.

Also, the RBA has downgraded its GDP growth forecast. I think the RBA would need to see an increase in the unemployment rate before it would be willing to cut the cash rate. Australia’s unemployment rate is still relatively low at 5.1% as illustrated in the chart below.


Will the banks pass it on?

Of course, if the RBA does cut the cash rate below its current level of 1.5% p.a., the big question is; will the banks pass all of the reduction onto borrowers?

On one hand, given the scrutiny and negative publicity generated by the recent Royal Commission, you would think they would have to be very brave (read stupid or arrogant) to not pass it all on.

That said, a few small lenders have increased variable rates this year (e.g. ING) which suggest funding costs have been on the rise. Perhaps the banks will use this opportunity t

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> For many Australian’s, their home loan is their largest expense. And property investors should seek to minimise their borrowing costs (interest) as it’s one of the top three factors that directly impacts investment success as outlined in this blog. With this in mind, I thought it was timely to look at the current opportunities in the mortgage/interest rate market.

What the “market” is expecting

As the chart below illustrates, the implied yield on 30-day cash rate futures suggests that the market expects the cash rate to be 0.25% lower in the second half of 2019. These future contracts are used primarily by large institutions and banks and essentially represent the consensus view on the direction of interest rates in the short term (i.e. next 18 months). Of course, the market is not always right – it’s only one indicator.


Economist predictions

Bill Evans, the Chief Economist for Westpac, was the first to predict that the RBA will cut its cash rate twice in 2019 (0.25% in August and then again in November). Since making this prediction on 20 February 2019, many other economists have joined him. Mr Evans was the first economist to correctly predict the start of the RBA’s easing cycle in 2011 – so he has good form.

Mr Evans cited weaker than expected GDP growth, the “wealth effect”[1] associated with a softer property market and an expected increase in our savings rate as the main reasons for forming his view.

What would have to happen for the RBA to cut

The RBA has previously said on a number of occasions that it is not concerned by the falling house prices. This commentary has never made sense to me because a falling property market definitely impacts on consumer confidence – look at what happened in the USA when the GCF hit. Perhaps the RBA was hoping its positive rhetoric would persuade Australian’s to ignore the wealth effect. However, in the last few weeks the RBA has changed its tune and acknowledge the risk that a soft property market might have on the wider economy.

Also, the RBA has downgraded its GDP growth forecast. I think the RBA would need to see an increase in the unemployment rate before it would be willing to cut the cash rate. Australia’s unemployment rate is still relatively low at 5.1% as illustrated in the chart below.


Will the banks pass it on?

Of course, if the RBA does cut the cash rate below its current level of 1.5% p.a., the big question is; will the banks pass all of the reduction onto borrowers?

On one hand, given the scrutiny and negative publicity generated by the recent Royal Commission, you would think they would have to be very brave (read stupid or arrogant) to not pass it all on.

That said, a few small lenders have increased variable rates this year (e.g. ING) which suggest funding costs have been on the rise. Perhaps the banks will use this opportunity t

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 52c1327c-d588-4c54-9cab-ea2d29236707 Thu, 21 Mar 2019 10:00:00 +1100 816 investopoly,wemyss,interest rates,financial advice, 1 63 true Who's going to manage your family's finances when you're gone? Who's going to manage your family's finances when you're gone? A client was telling me a story about how the Chief Financial Officer (CFO) of a business he used to own passed away unexpectantly. Of course, it was a very sad event both personally and professionally. But an unexpected additional consequence was that the business was locked out of internet banking. The CFO had many important passwords committed to memory (for security). The business had to pay staff the week following his death without any access to banking! This taught my client a very important personal lesson. That is, make sure your loved ones are looked after in the event of your unexpected demise. Don’t leave them in the dark!

Here are a few things you must organise.

Passwords galore!

Its ridiculous how many passwords we have these days – almost too many to keep track of. If your spouse or loved ones don’t have ready access to your passwords, it can be very frustrating and stressful – at a time where additional and avoidable stress is definitely unwanted. You need to make a list of important passwords, including:
  • Online banking
  • Superannuation accounts;
  • Managed fund providers or share brokers; and
  • Any other investment providers.

There are password apps you can use or a simple password protected Excel spreadsheet does the trick. Save the file in Dropbox (or similar) and share it with your spouse (or executor/s). This is simple to do and will avoid a lot of unnecessary stress.

Summary of assets and liabilities

It is important to have an up-to-date summary of all your assets and liabilities. This will make it easier for your executor/s to ascertain what assets you have, their value and what immediate actions need to be taken, if any. It is also useful if you have a summary of regular financial commitments such as loan repayments to ensure these are met on time. This will help your executor get on top of everything. Perhaps you can include this information in the password-protected Excel file mentioned above.

List of personal risk insurances

You should also maintain a list of personal risk insurances such as income protection, life and total & permanent disability insurances. You need to note policy numbers, sum insures and insurer. This will be important because if you have an accident, your partner/spouse may be able to lodge a claim on your behalf.

Who to contact list?

Your spouse or loved ones will need to know who to speak to for help. Therefore, keep a list of any trusted advisors including a description of what they do for you and when to contact them, including:
  • Financial advisor
  • Accountant/tax advisors
  • Insurance advisor
  • Estate lawyer (person who drafted your will)
  • Mortgage broker and/or banker.

Your investment strategy and what steps to take

Sharing your investment strategy with your spouse and loved ones is very important as it will ensure they have a clear picture of what steps to take. They should know exactly what to do if you pass away (e.g. sell assets, repay loans, invest insurance proceeds, etc.) and what to do to have a safe retirement. They should also know who to speak to and when.

This will obviously be a very stressful and emotionally painful time for them, so its best if you can ensure they don’t have any financial worries (or at least less worries). Communicating this important information will ensure they aren’t left in the dark and don’t need to worry about the future.

Each spouse MUST understand their

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> A client was telling me a story about how the Chief Financial Officer (CFO) of a business he used to own passed away unexpectantly. Of course, it was a very sad event both personally and professionally. But an unexpected additional consequence was that the business was locked out of internet banking. The CFO had many important passwords committed to memory (for security). The business had to pay staff the week following his death without any access to banking! This taught my client a very important personal lesson. That is, make sure your loved ones are looked after in the event of your unexpected demise. Don’t leave them in the dark!

Here are a few things you must organise.

Passwords galore!

Its ridiculous how many passwords we have these days – almost too many to keep track of. If your spouse or loved ones don’t have ready access to your passwords, it can be very frustrating and stressful – at a time where additional and avoidable stress is definitely unwanted. You need to make a list of important passwords, including:
  • Online banking
  • Superannuation accounts;
  • Managed fund providers or share brokers; and
  • Any other investment providers.

There are password apps you can use or a simple password protected Excel spreadsheet does the trick. Save the file in Dropbox (or similar) and share it with your spouse (or executor/s). This is simple to do and will avoid a lot of unnecessary stress.

Summary of assets and liabilities

It is important to have an up-to-date summary of all your assets and liabilities. This will make it easier for your executor/s to ascertain what assets you have, their value and what immediate actions need to be taken, if any. It is also useful if you have a summary of regular financial commitments such as loan repayments to ensure these are met on time. This will help your executor get on top of everything. Perhaps you can include this information in the password-protected Excel file mentioned above.

List of personal risk insurances

You should also maintain a list of personal risk insurances such as income protection, life and total & permanent disability insurances. You need to note policy numbers, sum insures and insurer. This will be important because if you have an accident, your partner/spouse may be able to lodge a claim on your behalf.

Who to contact list?

Your spouse or loved ones will need to know who to speak to for help. Therefore, keep a list of any trusted advisors including a description of what they do for you and when to contact them, including:
  • Financial advisor
  • Accountant/tax advisors
  • Insurance advisor
  • Estate lawyer (person who drafted your will)
  • Mortgage broker and/or banker.

Your investment strategy and what steps to take

Sharing your investment strategy with your spouse and loved ones is very important as it will ensure they have a clear picture of what steps to take. They should know exactly what to do if you pass away (e.g. sell assets, repay loans, invest insurance proceeds, etc.) and what to do to have a safe retirement. They should also know who to speak to and when.

This will obviously be a very stressful and emotionally painful time for them, so its best if you can ensure they don’t have any financial worries (or at least less worries). Communicating this important information will ensure they aren’t left in the dark and don’t need to worry about the future.

Each spouse MUST understand their

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 033f80d2-0dc8-4b73-8169-8467086c387f Wed, 13 Mar 2019 10:08:00 +1100 964 investopoly,estate plan,letter of wishes,wemyss,financial advice,independent financial advice, 1 62 false How to get more control over how your super is invested and the fees you pay (and lower fees) How to get more control over how your super is invested and the fees you pay (and lower fees) How to get more control over how your super is invested and the fees you pay (and lower fees)
Accountants often recommend establishing a Self Managed Super Funds (SMSF) as the best way to gain full control over how your super is invested. But most people don’t want the responsibility and compliance headaches that a SMSF can create.

A wrap platform is an excellent alternative to a SMSF. In fact, they are simpler, don’t come with any compliance obligations and are often lower cost. But they still give investors a lot of control over where and how their super is invested.

Steer clear of retail super funds

In my 17 years of experience in reviewing super funds, I have found that retail funds (e.g. AMP, BT, Colonial, MLC, etc.) invariably charge high fees and deliver very poor investment returns. This was confirmed by the Productivity Commission’s recent report into super. Therefore, if you are in a retail super fund, it’s almost certain that you would be better off switching (but you must consider any ancillary benefits and/or insurance before you do).

Concerns with industry super funds

I have written about my concerns with industry super funds in the past. I summarise my main concerns below:

§ Firstly, trade unions have a lot of control over the industry super funds, how they are operated and ultimately their lack of productivity. This ‘influence’ was highlighted during The Royal Commission into Trade Union Governance and Corruption.
§ Secondly, I am concern but the amount of money paid to trade unions and I am concerned that there aren’t enough checks-and-balances. A report in 2017 highlighted that trade unions received over $18 million from industry super funds over a 4 year period. Here’s another article from January this year stating that KPMG calculated that Cbus paid over $7 million to unions over a four year period ending in 2014. The operation of (1) trade unions and (2) investing people’s retirement savings are two separate activities and should be completely independent.
§ Thirdly, they lack a lot of transparency and accountability with respect to investment performance as I have written about here.
§ And finally, given their scale, they should be reducing fees, not increasing them – a point which the Productivity Commission has made in its recent investigation.

Having said all that, industry funds are much better than retail funds. And if you are not going to use a wrap account (or SMSF), then they are the best solution for your super. Hostplus, Cbus and AustralianSuper tend to be the best performers in terms of investment returns. AustralianSuper has the lowest fees out of the three (by a reasonable margin) so its typically my preferred option.

What is a wrap platform?

A wrap platform is a portal (super account) that helps you invest your super. It provides y

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> How to get more control over how your super is invested and the fees you pay (and lower fees)
Accountants often recommend establishing a Self Managed Super Funds (SMSF) as the best way to gain full control over how your super is invested. But most people don’t want the responsibility and compliance headaches that a SMSF can create.

A wrap platform is an excellent alternative to a SMSF. In fact, they are simpler, don’t come with any compliance obligations and are often lower cost. But they still give investors a lot of control over where and how their super is invested.

Steer clear of retail super funds

In my 17 years of experience in reviewing super funds, I have found that retail funds (e.g. AMP, BT, Colonial, MLC, etc.) invariably charge high fees and deliver very poor investment returns. This was confirmed by the Productivity Commission’s recent report into super. Therefore, if you are in a retail super fund, it’s almost certain that you would be better off switching (but you must consider any ancillary benefits and/or insurance before you do).

Concerns with industry super funds

I have written about my concerns with industry super funds in the past. I summarise my main concerns below:

§ Firstly, trade unions have a lot of control over the industry super funds, how they are operated and ultimately their lack of productivity. This ‘influence’ was highlighted during The Royal Commission into Trade Union Governance and Corruption.
§ Secondly, I am concern but the amount of money paid to trade unions and I am concerned that there aren’t enough checks-and-balances. A report in 2017 highlighted that trade unions received over $18 million from industry super funds over a 4 year period. Here’s another article from January this year stating that KPMG calculated that Cbus paid over $7 million to unions over a four year period ending in 2014. The operation of (1) trade unions and (2) investing people’s retirement savings are two separate activities and should be completely independent.
§ Thirdly, they lack a lot of transparency and accountability with respect to investment performance as I have written about here.
§ And finally, given their scale, they should be reducing fees, not increasing them – a point which the Productivity Commission has made in its recent investigation.

Having said all that, industry funds are much better than retail funds. And if you are not going to use a wrap account (or SMSF), then they are the best solution for your super. Hostplus, Cbus and AustralianSuper tend to be the best performers in terms of investment returns. AustralianSuper has the lowest fees out of the three (by a reasonable margin) so its typically my preferred option.

What is a wrap platform?

A wrap platform is a portal (super account) that helps you invest your super. It provides y

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 08ad3279-7421-47e3-9235-3799e1ad382c Thu, 07 Mar 2019 10:51:00 +1100 1036 investopoly,wemyss,wrap platforms,super,smsf,index investing,share market,superannuation 1 61 false How much is "reasonable" to spend on living expense? How much is "reasonable" to spend on living expense? What is the best way to manage cash flow? Do you need a monthly budget to track every single cent? Or is high-level budgeting ok? And, how much is too much to spend i.e. how do you know if you are over-spending compared to your peers? This blog will answer these questions and many more.

You cannot earn your way to improved cash flow

Have you heard the saying; “it’s not what you earn, it’s what you spend that counts”? Well, it’s true! If you have poor cash flow management habits, it doesn’t matter how much you earn, you will always find it very difficult to save money. I have met people with seven figure incomes and very little wealth to show for it. And I have clients on five figure incomes that have accumulated substantial wealth.

Of course, the more you earn, the more you can “afford” to spend on living expenses. But best-practice cash flow management is mostly about avoiding over-spending – rather than turning into a scrooge. I define over-spending as expenditure that adds very little to your standard of living (or only provides very temporary improvements). Typically, people with poor (or no) cash flow management techniques can trim expenses without it having a material impact on their standard of living.

The cost of doing nothing is too big to ignore!

Sometimes people avoid facing the truth because it’s painful. When it comes to cash flow, they avoid taking steps to manage it better because they fear (or know) they’ll have to make painful compromises.

However, you can’t make a problem disappear just by ignoring it. In fact, ignoring a cash flow problem will only make it worse. You will have to pay the price of poor cash flow management at some point. And the longer you avoid it, the more painful it will be. Worst case is that you will have to sell your home to reduce debt, be reliant on public housing and will have to live off the aged pension – which is less than $36,000 per year for a couple!

You can’t build wealth if you spend everything you earn. The good news is that 90% of people can improve cash flow management pretty easily without it impacting on their standard of living. For others, it will require a painful but necessary adjustment – but less painful than it will be if you continue to spend all your income.

Spending: minimise non-discretionary, more experiences and less “stuff”

There are two types of expenses; discretionary and non-discretionary. Non-discretionary expenses include items such as food, power, insurance and so on. There are ways to minimise these expenses as listed in our financial hacks. Non-discretionary expenses are necessary but really don’t enhance our ‘enjoyment’ of life. Non-discretionary expenses tend to be relatively finite and there’s a limited amount you can do to minimise them. Discretionary expenses are all the things we buy purely for pleasure but could live without (if we needed to).

The main purpose of non-discretionary expenses is to make you happy and give you a sense of enjoyment. Research shows that expenditure on experiences (holidays, sky diving, etc.) have the greatest impact on our happiness compared to buying “stuff”. Buying “stuff” (e.g. designer shoes) typically gives you a temporary hit of dopamine but it never lasts (and you need a bigger hit next time). Let’s face it. We reminisce more about past holidays than we do about past purchases. Don’t use money to change your mood – it’s an expensive treatment plan and never works long-term – spend money wise

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> What is the best way to manage cash flow? Do you need a monthly budget to track every single cent? Or is high-level budgeting ok? And, how much is too much to spend i.e. how do you know if you are over-spending compared to your peers? This blog will answer these questions and many more.

You cannot earn your way to improved cash flow

Have you heard the saying; “it’s not what you earn, it’s what you spend that counts”? Well, it’s true! If you have poor cash flow management habits, it doesn’t matter how much you earn, you will always find it very difficult to save money. I have met people with seven figure incomes and very little wealth to show for it. And I have clients on five figure incomes that have accumulated substantial wealth.

Of course, the more you earn, the more you can “afford” to spend on living expenses. But best-practice cash flow management is mostly about avoiding over-spending – rather than turning into a scrooge. I define over-spending as expenditure that adds very little to your standard of living (or only provides very temporary improvements). Typically, people with poor (or no) cash flow management techniques can trim expenses without it having a material impact on their standard of living.

The cost of doing nothing is too big to ignore!

Sometimes people avoid facing the truth because it’s painful. When it comes to cash flow, they avoid taking steps to manage it better because they fear (or know) they’ll have to make painful compromises.

However, you can’t make a problem disappear just by ignoring it. In fact, ignoring a cash flow problem will only make it worse. You will have to pay the price of poor cash flow management at some point. And the longer you avoid it, the more painful it will be. Worst case is that you will have to sell your home to reduce debt, be reliant on public housing and will have to live off the aged pension – which is less than $36,000 per year for a couple!

You can’t build wealth if you spend everything you earn. The good news is that 90% of people can improve cash flow management pretty easily without it impacting on their standard of living. For others, it will require a painful but necessary adjustment – but less painful than it will be if you continue to spend all your income.

Spending: minimise non-discretionary, more experiences and less “stuff”

There are two types of expenses; discretionary and non-discretionary. Non-discretionary expenses include items such as food, power, insurance and so on. There are ways to minimise these expenses as listed in our financial hacks. Non-discretionary expenses are necessary but really don’t enhance our ‘enjoyment’ of life. Non-discretionary expenses tend to be relatively finite and there’s a limited amount you can do to minimise them. Discretionary expenses are all the things we buy purely for pleasure but could live without (if we needed to).

The main purpose of non-discretionary expenses is to make you happy and give you a sense of enjoyment. Research shows that expenditure on experiences (holidays, sky diving, etc.) have the greatest impact on our happiness compared to buying “stuff”. Buying “stuff” (e.g. designer shoes) typically gives you a temporary hit of dopamine but it never lasts (and you need a bigger hit next time). Let’s face it. We reminisce more about past holidays than we do about past purchases. Don’t use money to change your mood – it’s an expensive treatment plan and never works long-term – spend money wise

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 36d18cd3-9bd3-4390-91d3-a233b58049cd Thu, 28 Feb 2019 12:11:00 +1100 1102 investopoly,wemyss,prosolution,financial planning,cash flow,investing 1 60 false Advantages of upsizing or downsizing your home in a softer property market Advantages of upsizing or downsizing your home in a softer property market Perhaps a softer property market will allow you to buy a future home now for below intrinsic value – especially if you plan to upsize or downsize in the next few years. Purchasers are in a stronger position in a softer market – especially with a backdrop of lower median property prices and lower auction clearance rates. This blog considers the financial merits of this strategy and what to look out for.

What’s the benefit of doing this now?

The advantage of buying at the bottom of the market (or close to it) is the probability that you will pay less for a property than you would if you purchased it in a more balanced or buoyant market. I wrote a piece for The Australian (here) in December stating that I believed we were close to the bottom of the market. And I still hold this view (e.g. auction clearance rates picked up over the weekend). So, if you agree that the market is unlikely to fall materially from here, then now might be a good opportunity to purchase a future home.

In addition to the benefit of buying below intrinsic value are lower transactional costs (stamp duty) and lower reoccurring holding costs (i.e. lower borrowings means a lower annual interest expense).

Buy now and rent it out

One strategy could include buying a replacement home now and tenanting the property until (1) you are ready to occupy it and/or (2) the property market improves and is more of a sellers’ market. This might help you to ‘buy low and sell high’ thereby maximising your equity and financial position.

An additional benefit to this strategy is that you will ‘lock-in’ your entitlement to benefit from negative gearing. This is important if you believe that the ALP will win the federal election in May and implement their ban on negative gearing. Purchasing before this ban is implemented could save you a lot of tax.

In order to do this, you must consider two factors:
1. Does your borrowing capacity allow you to buy now and sell later? As I have written about in the past, borrowing capacity has contracted a lot and just because you think you can afford a loan, doesn’t mean a bank will share the same opinion; and
2. Can you afford the debt from a cash flow perspective? Typically, I test affordability at an interest rate of 7% p.a. – to ensure debt is still manageable in a higher interest rate environment. Obviously, interest rates are a lot lower than 7% p.a. at the moment. And the market has priced in an RBA rate cut this year – although we’d probably need to see the unemployment rate increase for that to happen. So, there is a reasonable argument to be made to say that rates will remain low for a while. But don’t get seduced by the lower rates and risk over-borrowing.

Market arbitrage has its risks

Market arbitrage refers to buying and selling in different markets. This strategy is not without risk. Obviously, the key assumption behind this strategy is that buying today will cost you less than say buying in 5 years’ time. And it’s also assumed that selling your existing property in 5 years’ time will yield a higher sales price than selling now. However, this is merely an assumption and it could turn out to be wrong. Therefore, the lowest-risk approach is to buy and sell in the same market (i.e. this year).

However, for some people, the risk is worth taking i.e. buying now and selling in a few years’ time. This depends on your risk profile, financial position, location of properties and so on. If it’

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Perhaps a softer property market will allow you to buy a future home now for below intrinsic value – especially if you plan to upsize or downsize in the next few years. Purchasers are in a stronger position in a softer market – especially with a backdrop of lower median property prices and lower auction clearance rates. This blog considers the financial merits of this strategy and what to look out for.

What’s the benefit of doing this now?

The advantage of buying at the bottom of the market (or close to it) is the probability that you will pay less for a property than you would if you purchased it in a more balanced or buoyant market. I wrote a piece for The Australian (here) in December stating that I believed we were close to the bottom of the market. And I still hold this view (e.g. auction clearance rates picked up over the weekend). So, if you agree that the market is unlikely to fall materially from here, then now might be a good opportunity to purchase a future home.

In addition to the benefit of buying below intrinsic value are lower transactional costs (stamp duty) and lower reoccurring holding costs (i.e. lower borrowings means a lower annual interest expense).

Buy now and rent it out

One strategy could include buying a replacement home now and tenanting the property until (1) you are ready to occupy it and/or (2) the property market improves and is more of a sellers’ market. This might help you to ‘buy low and sell high’ thereby maximising your equity and financial position.

An additional benefit to this strategy is that you will ‘lock-in’ your entitlement to benefit from negative gearing. This is important if you believe that the ALP will win the federal election in May and implement their ban on negative gearing. Purchasing before this ban is implemented could save you a lot of tax.

In order to do this, you must consider two factors:
1. Does your borrowing capacity allow you to buy now and sell later? As I have written about in the past, borrowing capacity has contracted a lot and just because you think you can afford a loan, doesn’t mean a bank will share the same opinion; and
2. Can you afford the debt from a cash flow perspective? Typically, I test affordability at an interest rate of 7% p.a. – to ensure debt is still manageable in a higher interest rate environment. Obviously, interest rates are a lot lower than 7% p.a. at the moment. And the market has priced in an RBA rate cut this year – although we’d probably need to see the unemployment rate increase for that to happen. So, there is a reasonable argument to be made to say that rates will remain low for a while. But don’t get seduced by the lower rates and risk over-borrowing.

Market arbitrage has its risks

Market arbitrage refers to buying and selling in different markets. This strategy is not without risk. Obviously, the key assumption behind this strategy is that buying today will cost you less than say buying in 5 years’ time. And it’s also assumed that selling your existing property in 5 years’ time will yield a higher sales price than selling now. However, this is merely an assumption and it could turn out to be wrong. Therefore, the lowest-risk approach is to buy and sell in the same market (i.e. this year).

However, for some people, the risk is worth taking i.e. buying now and selling in a few years’ time. This depends on your risk profile, financial position, location of properties and so on. If it’

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 76dcc264-4273-4740-8322-7696e49d0a71 Wed, 20 Feb 2019 10:00:00 +1100 1059 wemyss,investopoly,property,financial planning,financial advice,home,property investing, 1 59 false How important is it to buy a property at the bottom of the market? How important is it to buy a property at the bottom of the market? If you are contemplating investing in property, should you buy now or wait? What if prices fall further this year? Maybe you would be better off waiting?

As my analysis below reveals, buying for less than market value or at the bottom of the market (i.e. buying well), has very little impact. The price we pay for a property has little impact on success as investors. So, the desire to buy below market is probably driven more by ego more than fundamentals.

Timing the market is a flawed strategy

No one in the world has developed a reliable system for predicting how asset classes will change in the short term. As Mr Buffett says; “forecasters will fill your ears but never your pockets”. Therefore, if you think you can implement a strategy that involves picking the bottom of the market, think again! Not only is it impossible to do, but many of the indicators used to measure the health of the property market are lag indicators. That is, by the time the indicators change, prices would have already rebounded somewhat.
How important is it to buy well?

This is a good question and one that I have spent a lot of time analysing. I financially modelled a $750,000 property investment and measured the sensitivity to the following factors/assumptions:
  1. Capital growth – this is the average rate of appreciation in value over the next 20 years. My base case assumption is a nominal rate of 7% p.a. (assuming an inflation rate of 2.5% p.a.). The range I used was 4% (being only 1.5% above inflation) and 10% (which I have observed in blue-chip locations over the past 30 years).
  2. Buying above or under fair market value – I measured the impact of buying 10% below market value versus over-paying by 10%.
  3. Capital gains tax (CGT) – I measured the impact of paying no CGT (e.g. owning in a SMSF) versus paying the maximum CGT (e.g. the ALP’s policy is to halve the CGT discount). The midpoint I assumed is based on current laws at a tax rate of 39% p.a.
  4. Interest rates – my midpoint is 6% but I sensitised using a range of 4% to 8% p.a.
  5. Rental yield – this is the amount of gross rental income you will receive compared to the properties value (expressed as a percentage). I have assumed a normalised mid-point of 3% but then also tested a range of 2% to 5%.
  6. Rental growth rate – this is how much the rent will increase by on average each year. I have used a growth rate range of 3% – being slightly above CPI and 7% – which is relatively high.
  7. Negative gearing – as has been well publicised, the ALP will ban negative gearing on existing properties (if you own existing investments, these are excluded, so you won’t be impacted). As such, I sensitised the impact of negative gearing on an investment. I compared no negative gearing versus maximal benefit at tax rate of 47%. The midpoint was 39%.

What I did is held all factors that same (i.e. at the midpoint/base case) and changed one variable from high to low to measure the impact on after tax cash (assuming you hold the investment property for 20 years and then sell it). This included the cash flow cost plus the after-tax sale proceeds.

And the winner is…
As the chart below illustrates, buying under fair market value has very little impact on the success of your investment. A property’s capital growth rate is by far the most important factor. A distant second is capital gains tax, then interest rate and finally rental income.


What steps should you take as a result of this?

If you are investing i

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> If you are contemplating investing in property, should you buy now or wait? What if prices fall further this year? Maybe you would be better off waiting?

As my analysis below reveals, buying for less than market value or at the bottom of the market (i.e. buying well), has very little impact. The price we pay for a property has little impact on success as investors. So, the desire to buy below market is probably driven more by ego more than fundamentals.

Timing the market is a flawed strategy

No one in the world has developed a reliable system for predicting how asset classes will change in the short term. As Mr Buffett says; “forecasters will fill your ears but never your pockets”. Therefore, if you think you can implement a strategy that involves picking the bottom of the market, think again! Not only is it impossible to do, but many of the indicators used to measure the health of the property market are lag indicators. That is, by the time the indicators change, prices would have already rebounded somewhat.
How important is it to buy well?

This is a good question and one that I have spent a lot of time analysing. I financially modelled a $750,000 property investment and measured the sensitivity to the following factors/assumptions:
  1. Capital growth – this is the average rate of appreciation in value over the next 20 years. My base case assumption is a nominal rate of 7% p.a. (assuming an inflation rate of 2.5% p.a.). The range I used was 4% (being only 1.5% above inflation) and 10% (which I have observed in blue-chip locations over the past 30 years).
  2. Buying above or under fair market value – I measured the impact of buying 10% below market value versus over-paying by 10%.
  3. Capital gains tax (CGT) – I measured the impact of paying no CGT (e.g. owning in a SMSF) versus paying the maximum CGT (e.g. the ALP’s policy is to halve the CGT discount). The midpoint I assumed is based on current laws at a tax rate of 39% p.a.
  4. Interest rates – my midpoint is 6% but I sensitised using a range of 4% to 8% p.a.
  5. Rental yield – this is the amount of gross rental income you will receive compared to the properties value (expressed as a percentage). I have assumed a normalised mid-point of 3% but then also tested a range of 2% to 5%.
  6. Rental growth rate – this is how much the rent will increase by on average each year. I have used a growth rate range of 3% – being slightly above CPI and 7% – which is relatively high.
  7. Negative gearing – as has been well publicised, the ALP will ban negative gearing on existing properties (if you own existing investments, these are excluded, so you won’t be impacted). As such, I sensitised the impact of negative gearing on an investment. I compared no negative gearing versus maximal benefit at tax rate of 47%. The midpoint was 39%.

What I did is held all factors that same (i.e. at the midpoint/base case) and changed one variable from high to low to measure the impact on after tax cash (assuming you hold the investment property for 20 years and then sell it). This included the cash flow cost plus the after-tax sale proceeds.

And the winner is…
As the chart below illustrates, buying under fair market value has very little impact on the success of your investment. A property’s capital growth rate is by far the most important factor. A distant second is capital gains tax, then interest rate and finally rental income.


What steps should you take as a result of this?

If you are investing i

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 45a486a7-1d51-4834-bdb2-9267721d6b62 Wed, 13 Feb 2019 09:00:00 +1100 924 investopoly,wemyss,property investment,market timing, 1 58 false Three strategies to fund children's education costs Three strategies to fund children's education costs It was reported over the weekend that private school fees have increased by 3.6% over the past year. However, the longer-term trend is closer to 5% p.a. Private school fees are tipped to soon exceed $40,000! That is a big hit to after-tax cash flow. This blog compares three financial strategies you can use to fund future school fees.

What is the future cost?

There are two things to keep in mind with respect to future education costs. Firstly, the average rate of fee increases is close to 5% p.a. Secondly, these expenses must be paid from after-tax income – so you have to earn a lot more pre-tax in order to meet these costs.

A child born this year will most likely start secondary school in year 2031. Assuming fees increase 5% p.a. and inflation remains at 2% p.a., the total cost of secondary private school education will be $280,000 in today’s dollars. A parent will need to earn at least $460,000 before tax (in today’s dollars) over a 6-year period to meet these costs – an average of $75,000 p.a. per child.

I am sure you agree that this is a substantial cost and one that you must plan for as early as possible.

Steer clear of education funds

The most prominent education fund producer is ASG. It creates structured savings plan so that parents will be better positioned to meet future education costs. However, their fees are high and investment returns are terrible. Parents would be far better off following one of the lower-cost, more transparent options below.

Strategy One: Park savings in your home loan

The best place to save money is to park it in your home loan and redraw it whenever you need it. The reason being is that the home loan interest rate is much higher than the deposit rate. At best, you might receive 2.5% p.a. in interest for money in a savings bank account. The home loan mortgage interest rate is currently around 4% p.a.
I completed my financial projections using a home loan interest rate of 5% over the next 18 years (the average rate over this time will likely be higher – but I’m being conservative). I worked out that parents would need to direct additional cash of $1,200 per month into their home loan over the next 18 years in order to fund their children’s school fees. That is, in year 2031 they would redraw these extra repayments from their home loan to pay for their children’s school fees as they are incurred.

This approach (i.e. $1,200 per month for 18 years) costs $258,000 in after tax dollars – slightly less than the $280,000 above – because of the interest saving generated by the extra repayments.

This approach is very low risk because your return (being the home loan interest you will save) is certain. That is, home loan interest rates will almost always be between 3.5% and 8% p.a.

You can also park money in an offset linked to an investment loan – although it is less effective than a (non-tax-deductible) home loan.

Strategy Two: Invest in the share market

This option includes investing a regular amount in the share market. You don’t need to ‘pick’ shares in order to implement this strategy. Instead, you can use a low-cost, diversified index fund from Vanguard to do this. This means you only need to buy shares in one stock (codes are VDHG or VDGR for example) each month in order

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> It was reported over the weekend that private school fees have increased by 3.6% over the past year. However, the longer-term trend is closer to 5% p.a. Private school fees are tipped to soon exceed $40,000! That is a big hit to after-tax cash flow. This blog compares three financial strategies you can use to fund future school fees.

What is the future cost?

There are two things to keep in mind with respect to future education costs. Firstly, the average rate of fee increases is close to 5% p.a. Secondly, these expenses must be paid from after-tax income – so you have to earn a lot more pre-tax in order to meet these costs.

A child born this year will most likely start secondary school in year 2031. Assuming fees increase 5% p.a. and inflation remains at 2% p.a., the total cost of secondary private school education will be $280,000 in today’s dollars. A parent will need to earn at least $460,000 before tax (in today’s dollars) over a 6-year period to meet these costs – an average of $75,000 p.a. per child.

I am sure you agree that this is a substantial cost and one that you must plan for as early as possible.

Steer clear of education funds

The most prominent education fund producer is ASG. It creates structured savings plan so that parents will be better positioned to meet future education costs. However, their fees are high and investment returns are terrible. Parents would be far better off following one of the lower-cost, more transparent options below.

Strategy One: Park savings in your home loan

The best place to save money is to park it in your home loan and redraw it whenever you need it. The reason being is that the home loan interest rate is much higher than the deposit rate. At best, you might receive 2.5% p.a. in interest for money in a savings bank account. The home loan mortgage interest rate is currently around 4% p.a.
I completed my financial projections using a home loan interest rate of 5% over the next 18 years (the average rate over this time will likely be higher – but I’m being conservative). I worked out that parents would need to direct additional cash of $1,200 per month into their home loan over the next 18 years in order to fund their children’s school fees. That is, in year 2031 they would redraw these extra repayments from their home loan to pay for their children’s school fees as they are incurred.

This approach (i.e. $1,200 per month for 18 years) costs $258,000 in after tax dollars – slightly less than the $280,000 above – because of the interest saving generated by the extra repayments.

This approach is very low risk because your return (being the home loan interest you will save) is certain. That is, home loan interest rates will almost always be between 3.5% and 8% p.a.

You can also park money in an offset linked to an investment loan – although it is less effective than a (non-tax-deductible) home loan.

Strategy Two: Invest in the share market

This option includes investing a regular amount in the share market. You don’t need to ‘pick’ shares in order to implement this strategy. Instead, you can use a low-cost, diversified index fund from Vanguard to do this. This means you only need to buy shares in one stock (codes are VDHG or VDGR for example) each month in order

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss a54bad0a-9d7c-4b07-8bf2-8f015246a92a Wed, 06 Feb 2019 12:04:00 +1100 932 school fees,investopoly,wemyss,financial planning 1 57 false Warning: Don't make your strategy fit your investments (or let anyone else do it) Warning: Don't make your strategy fit your investments (or let anyone else do it) One of the biggest mistakes that people make is deciding to invest in a few assets/investments and then, after that, figure out what their strategy looks like. Worse still, many financial services and property businesses do this too. They market investments that initially appear attractive but ultimately won’t help you achieve your goals. I outline why this is a very bad approach and what to do instead.

Sexy investments sell

The most successful way to sell investments is to market them using the two primary emotions of fear or greed. An investment that promises high returns with little risk will typically have great appeal to the mass-market. The problem is that sexiness and fundamentals are almost always inversely related. Fundamentally sound investments are usually dry, dull and boring. Therefore, it is difficult to get people excited about them. However, shiny objects attract a whole lot more attention.

The fastest way for a financial services business to attract more investors is to market sexy investments. The problem with this approach is that whilst it might deliver short term profit (to the business – probably not the investor), it is at the costly expense of creating long term value for both the business and the investor.

Be sceptical of businesses that market investments

No one trusts used-car salespeople. The reason is that we are well aware that their goal is to make a sale and they might say or do anything to achieve that goal. Its not that they are the enemy or bad people. It’s just that we have a very healthy level of scepticism for anything they say or do.

The same is true for any financial services business that markets investments. Their goal is to highlight the benefit of their investments and pitch to you why it is perfect for you. Therefore, you must maintain a healthy level of scepticism. If you want to find someone you can trust, find someone that has nothing to sell you (other than their advice).

Here are two different examples of what I’m talking about:

§ Because borrowing capacity has tightened, some property advisors are now recommending their clients invest in regional locations – because they no longer have the borrowing capacity to invest in blue-chip locations. However, these same businesses have in the past communicated that regional locations have inferior investment prospects. It is clear to me that businesses like these are designing their advice to fit their client base. Instead, I believe that you must have the integrity to sick to what you believe is right and attract the clients that can afford to invest. A reputable business should never adjust their advice to accommodate the market or client demand. My advice is always; if you can’t afford to invest in an investment-grade property, then do not invest in property. Simple.
§
§ Some fund managers offer ‘high conviction’ share market investments. These are managed funds that invest in a small, concentrated portfolio of holdings (so they have high concentration risk). Often, these funds have high turnover too – meaning they buy and sell stocks regularly triggering tax and expenses. As such, almost their entire investment return is in the form of income and capital gains i.e. very little capital growth. Therefore, whilst the headline investment returns might seem attractive, they are very tax-inefficient which makes them financially inefficient because you lose half of your return each year in tax.
§
Would you swim to Europe?

Swimming has a lot of positives. It doesn’t cost anything. It is good for your health. Many people find the activity enjoyable. However, e

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> One of the biggest mistakes that people make is deciding to invest in a few assets/investments and then, after that, figure out what their strategy looks like. Worse still, many financial services and property businesses do this too. They market investments that initially appear attractive but ultimately won’t help you achieve your goals. I outline why this is a very bad approach and what to do instead.

Sexy investments sell

The most successful way to sell investments is to market them using the two primary emotions of fear or greed. An investment that promises high returns with little risk will typically have great appeal to the mass-market. The problem is that sexiness and fundamentals are almost always inversely related. Fundamentally sound investments are usually dry, dull and boring. Therefore, it is difficult to get people excited about them. However, shiny objects attract a whole lot more attention.

The fastest way for a financial services business to attract more investors is to market sexy investments. The problem with this approach is that whilst it might deliver short term profit (to the business – probably not the investor), it is at the costly expense of creating long term value for both the business and the investor.

Be sceptical of businesses that market investments

No one trusts used-car salespeople. The reason is that we are well aware that their goal is to make a sale and they might say or do anything to achieve that goal. Its not that they are the enemy or bad people. It’s just that we have a very healthy level of scepticism for anything they say or do.

The same is true for any financial services business that markets investments. Their goal is to highlight the benefit of their investments and pitch to you why it is perfect for you. Therefore, you must maintain a healthy level of scepticism. If you want to find someone you can trust, find someone that has nothing to sell you (other than their advice).

Here are two different examples of what I’m talking about:

§ Because borrowing capacity has tightened, some property advisors are now recommending their clients invest in regional locations – because they no longer have the borrowing capacity to invest in blue-chip locations. However, these same businesses have in the past communicated that regional locations have inferior investment prospects. It is clear to me that businesses like these are designing their advice to fit their client base. Instead, I believe that you must have the integrity to sick to what you believe is right and attract the clients that can afford to invest. A reputable business should never adjust their advice to accommodate the market or client demand. My advice is always; if you can’t afford to invest in an investment-grade property, then do not invest in property. Simple.
§
§ Some fund managers offer ‘high conviction’ share market investments. These are managed funds that invest in a small, concentrated portfolio of holdings (so they have high concentration risk). Often, these funds have high turnover too – meaning they buy and sell stocks regularly triggering tax and expenses. As such, almost their entire investment return is in the form of income and capital gains i.e. very little capital growth. Therefore, whilst the headline investment returns might seem attractive, they are very tax-inefficient which makes them financially inefficient because you lose half of your return each year in tax.
§
Would you swim to Europe?

Swimming has a lot of positives. It doesn’t cost anything. It is good for your health. Many people find the activity enjoyable. However, e

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 78b556c5-c358-488b-a003-0ae41d3a2819 Thu, 31 Jan 2019 09:00:00 +1100 956 investopoly,wemyss,investment strategy,property investing 1 56 false Banning negative gearing will force you to become a better property investor Banning negative gearing will force you to become a better property investor If the ALP wins the election in May and ban negative gearing on established property (as proposed), does that mean property is no longer a good asset class to invest in? The answer is no, if you do it right. In an environment of no negative gearing, capital growth becomes even more important.

The razzle dazzle of tax savings is too tempting for some people to ignore

Too many people have been seduced by tax benefits when selecting a property investment. Potential tax savings distract investors’ attention away from an asset’s poor quality (lack of fundamentals). The problem is that you have to live with the asset’s quality long after the tax savings have evaporated. And the asset’s quality will dictate whether you will enjoy adequate investment returns (mostly in the form of capital growth) or not.

Tax benefits can come in two ways.

Steer clear of depreciation benefits

Firstly, there’s ‘depreciation’ which is a measure of the reduction of a dwellings value over time. If you are the first owner of a property, you can claim a depreciation deduction in respect to the building and its fittings and fixtures. The problem with depreciation is that it actually happens. It’s like driving a new car off the lot – they say it immediately depreciates by 10%! A new building will depreciate substantially in the first decade of ownership. Therefore, for the investment to work, the land value must appreciate at a much faster rate to (1) offset the building depreciation and (2) contribute to the property’s overall value appreciation (if there is to be any). The problem is that new-build properties typically have a smaller land value component so that doesn’t happen. The existence of a depreciation benefit is a red flag that a property isn’t investment-grade and therefore should be avoided from an investment perspective.

Negative gearing should help you generate capital gains

Amazon is worth over $USD830 billion according to the stock market. However, it makes $USD3 billion profit per year – which is not a lot for a company that is worth so much. Therefore, the reason that people invest in Amazon is because they think that the businesses will be worth a lot more in the future. Amazon shareholders are clearly investing for growth, not income (it’s never paid a dividend to shareholders).

The same concept is true for investment-grade property. Smart investors don’t invest for negative gearing. Negative gearing is merely a positive consequence of their investment. Smart investors are targeting capital growth so that whatever they lose in income (net loss after tax benefits) will be dwarfed by the amount of capital growth in the long run. However, some investors have incorrectly focused on (or been seduced by) tax savings when making investment decisions. In reality, this is an unwelcome distraction from what is ultimately going to make-or-break an investment in the long run.

In the future, you’ll have to be more picky

If you agree that the primary reason we invest in property is for capital growth, then, when considering any prospective investment, we must consider its future capital growth prospects. That is, we must be sure that a property’s future growth will more than offset any income losses to the extent that the net investment returns are still very healthy.
The existence of negative gearing means that an investor needs a lower amount of capital growth in order to generate an adequate return. However, if negative gearing was to be abolished, I would argue that all investors must become even more

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> If the ALP wins the election in May and ban negative gearing on established property (as proposed), does that mean property is no longer a good asset class to invest in? The answer is no, if you do it right. In an environment of no negative gearing, capital growth becomes even more important.

The razzle dazzle of tax savings is too tempting for some people to ignore

Too many people have been seduced by tax benefits when selecting a property investment. Potential tax savings distract investors’ attention away from an asset’s poor quality (lack of fundamentals). The problem is that you have to live with the asset’s quality long after the tax savings have evaporated. And the asset’s quality will dictate whether you will enjoy adequate investment returns (mostly in the form of capital growth) or not.

Tax benefits can come in two ways.

Steer clear of depreciation benefits

Firstly, there’s ‘depreciation’ which is a measure of the reduction of a dwellings value over time. If you are the first owner of a property, you can claim a depreciation deduction in respect to the building and its fittings and fixtures. The problem with depreciation is that it actually happens. It’s like driving a new car off the lot – they say it immediately depreciates by 10%! A new building will depreciate substantially in the first decade of ownership. Therefore, for the investment to work, the land value must appreciate at a much faster rate to (1) offset the building depreciation and (2) contribute to the property’s overall value appreciation (if there is to be any). The problem is that new-build properties typically have a smaller land value component so that doesn’t happen. The existence of a depreciation benefit is a red flag that a property isn’t investment-grade and therefore should be avoided from an investment perspective.

Negative gearing should help you generate capital gains

Amazon is worth over $USD830 billion according to the stock market. However, it makes $USD3 billion profit per year – which is not a lot for a company that is worth so much. Therefore, the reason that people invest in Amazon is because they think that the businesses will be worth a lot more in the future. Amazon shareholders are clearly investing for growth, not income (it’s never paid a dividend to shareholders).

The same concept is true for investment-grade property. Smart investors don’t invest for negative gearing. Negative gearing is merely a positive consequence of their investment. Smart investors are targeting capital growth so that whatever they lose in income (net loss after tax benefits) will be dwarfed by the amount of capital growth in the long run. However, some investors have incorrectly focused on (or been seduced by) tax savings when making investment decisions. In reality, this is an unwelcome distraction from what is ultimately going to make-or-break an investment in the long run.

In the future, you’ll have to be more picky

If you agree that the primary reason we invest in property is for capital growth, then, when considering any prospective investment, we must consider its future capital growth prospects. That is, we must be sure that a property’s future growth will more than offset any income losses to the extent that the net investment returns are still very healthy.
The existence of negative gearing means that an investor needs a lower amount of capital growth in order to generate an adequate return. However, if negative gearing was to be abolished, I would argue that all investors must become even more

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss e108e089-6441-4edd-a4ac-b5c237eb5acd Thu, 24 Jan 2019 10:02:00 +1100 913 investopoly,wemyss,negatrive gearing,property investment,financial planning 1 55 false Can you fund retirement from capital growth? Can you fund retirement from capital growth? When working out a retirement strategy, often people try to work out the value of investments they will need by multiplying the amount of annual retirement income they will need by a nominal interest rate. For example, if you want $100,000 p.a. in retirement and you think you can earn an income rate of say 3% p.a., you’ll need $3.4 million of net investment assets. The more aggressive you are with your interest rate assumption, the fewer assets you need to meet your goal. The reverse is also true.

Beware, there are a couple of pitfalls with this approach.

It results in a lazy asset allocation

If all of your investment assets are invested in cash or fixed interest investments (such as government and corporate bonds) in order to generate a stable income, you have little protection from inflation. This is because these investments do not provide any capital growth. All their return is provided in the form of income and your capital stays the same – think term deposit.

This means that over time, your assets will be worth less and less in real terms – because of inflation, your purchasing power is reduced. For example, $1 million today will be equivalent to $477,000 in 30 years’ time assuming the inflation rate averages 2.5% p.a. over that period.

People are living longer. Medical technology is improving at an increasing rate. Therefore, we must consider the likelihood of living to age 100 and beyond. To ensure you don’t run out of money, you must ensure you invest in assets that provide some capital growth so that your money at least keeps up with inflation and hopefully increases over time.
You must account for taxes

Of course, you must account for any taxation liabilities. If all your money is inside super (and your balance is less than $1.6 million), then no tax will apply if you draw a pension. However, if you have assets outside of super, you will need to account for any income tax consequences. The good news however is that an individual can earn approximately $20,500 per year before they need to pay any tax. Therefore, hopefully you can share any personal income between you and your spouse to minimise any taxation liabilities. My point here is you must think carefully about ownership structures i.e. where your investments are held. Super is excellent, but you don’t want to put all your eggs in one basket. Putting all investment assets in one person’s name also typically isn’t very wise in the long run.

Markets will go up and down

The role of asset allocation (i.e. the methodology used to spread your money across various asset classes) is to smooth returns and minimises losses. That is, some asset classes are negatively correlated which means when one asset class generates high returns, the other will likely generate low or negative returns. However, if you invest in both asset classes in the right proportions, you will achieve better investment outcomes at a portfolio level. This (i.e. asset allocation) is the most important decision a professional advisor can help you with. Its an investor’s most important decision. Because investors cannot control markets or returns. But they can control where and how they invest their monies.

Therefore, by putting all your money in cash and fixed income assets, you risk missing out on a lot of returns. Take the last decade for example. Government bond returns have been historically very low – sub 3% p.a. Whereas international equity markets have provided a total return of just under 10% p.a. over this period of time. This demonstrates the perils of putting all your money in one asset class.

Sometime in the future, this will probably reverse. Equity markets will perform poorly, and bonds will perform

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> When working out a retirement strategy, often people try to work out the value of investments they will need by multiplying the amount of annual retirement income they will need by a nominal interest rate. For example, if you want $100,000 p.a. in retirement and you think you can earn an income rate of say 3% p.a., you’ll need $3.4 million of net investment assets. The more aggressive you are with your interest rate assumption, the fewer assets you need to meet your goal. The reverse is also true.

Beware, there are a couple of pitfalls with this approach.

It results in a lazy asset allocation

If all of your investment assets are invested in cash or fixed interest investments (such as government and corporate bonds) in order to generate a stable income, you have little protection from inflation. This is because these investments do not provide any capital growth. All their return is provided in the form of income and your capital stays the same – think term deposit.

This means that over time, your assets will be worth less and less in real terms – because of inflation, your purchasing power is reduced. For example, $1 million today will be equivalent to $477,000 in 30 years’ time assuming the inflation rate averages 2.5% p.a. over that period.

People are living longer. Medical technology is improving at an increasing rate. Therefore, we must consider the likelihood of living to age 100 and beyond. To ensure you don’t run out of money, you must ensure you invest in assets that provide some capital growth so that your money at least keeps up with inflation and hopefully increases over time.
You must account for taxes

Of course, you must account for any taxation liabilities. If all your money is inside super (and your balance is less than $1.6 million), then no tax will apply if you draw a pension. However, if you have assets outside of super, you will need to account for any income tax consequences. The good news however is that an individual can earn approximately $20,500 per year before they need to pay any tax. Therefore, hopefully you can share any personal income between you and your spouse to minimise any taxation liabilities. My point here is you must think carefully about ownership structures i.e. where your investments are held. Super is excellent, but you don’t want to put all your eggs in one basket. Putting all investment assets in one person’s name also typically isn’t very wise in the long run.

Markets will go up and down

The role of asset allocation (i.e. the methodology used to spread your money across various asset classes) is to smooth returns and minimises losses. That is, some asset classes are negatively correlated which means when one asset class generates high returns, the other will likely generate low or negative returns. However, if you invest in both asset classes in the right proportions, you will achieve better investment outcomes at a portfolio level. This (i.e. asset allocation) is the most important decision a professional advisor can help you with. Its an investor’s most important decision. Because investors cannot control markets or returns. But they can control where and how they invest their monies.

Therefore, by putting all your money in cash and fixed income assets, you risk missing out on a lot of returns. Take the last decade for example. Government bond returns have been historically very low – sub 3% p.a. Whereas international equity markets have provided a total return of just under 10% p.a. over this period of time. This demonstrates the perils of putting all your money in one asset class.

Sometime in the future, this will probably reverse. Equity markets will perform poorly, and bonds will perform

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss a9d61e90-6164-4f88-b6d6-8f834dd5b212 Thu, 17 Jan 2019 09:31:00 +1100 741 investopoly,wemyss,capital growth,fund retirement,asset allocation 1 54 false Three questions you must ask yourself to kick start 2019 Three questions you must ask yourself to kick start 2019 Question one: What didn’t work well in 2018?
When planning, a good place to start is to ask yourself what were the one or two things that didn’t work well in 2018. Maybe you planned to sort out your super and didn’t get around to it? Or maybe you didn’t have a good enough handle on expenses (spending)? The idea is to identify one or two big things that didn’t turn out how you had hoped and develop a plan for rectifying them this year. Here’s two tips:
1. Often, it’s not a what, but who question. The best way to find a solution to a problem is not by asking “what steps do I need to take” but “who has solved this problem previously that can help me”. Seeking advice or experience from someone that has been in the same situation you will save a lot of time and help you avoid repeating common mistakes. People such as family, friends, colleagues or an independent advisor could help.
2. Who’s going to hold you accountable? Creating some sort of accountability has a massive impact on the likelihood of someone achieving a goal. When you set a goal, you must set a deadline and then have someone hold you accountable for achieving that deadline. That could be your spouse, friend, accountant or an independent advisor.

Question Two: What are the one or two things you need to achieve in 2019?
All of my financial advisory clients have a very clear understanding of the one or two priorities that they need to focus on/achieve this year in order to achieve their longer-term goals. This could include reducing/offsetting debt by a predetermined amount (through good cash flow management assisted with software), investing a certain amount in super, making regular share investments, investing in property or similar.

The key question to ask yourself now is “what can I do this year that will have the largest impact on my financial position by 2030?” This will force you to take a long-term view and not be distracted by short-term worries or noise. Don’t try and take on too many goals in 2019 – you really only what one to three goals. And if you are struggling to develop a long-term plan then grab a copy of Investopoly and follow the 8 rules outlined therein.

Question Three: Are you safe and secure?
It is very important that you periodically consider the things that are in place to protect your wealth and family and the start of a year is a perfect time to do that:
· Are your wills up-to-date? Are your executors still wiling and able to preform their role? Have any beneficiaries changed? Do you have current medical and financial powers of attorney? Should/does your will include a testamentary trust?
· Are your personal risk insurances (Life, TPD and income protection) up-to-date and still appropriate? Are they structured is a way that you are getting the best value for money i.e. deepest, quality cover for the lowest cost?
· Have you reviewed your mortgage interest rates? Should you convert loan repayments to principal and interest (to reduce the interest rate ≈ 0.50% p.a.)? Should you lock in access to equity now? Should you fix any interest rates (3-year fixed rates can be lower than variable rates)?
· Is your super invested in the correct investment option? If you have multiple super accounts, should you consolidate them? Have you looked at your super fund’s long term (10 year) performance compared to the leading industry funds (see here – refer to Chart 2)?
· Are your tax structures effective? Have you had a review of your taxation affairs?

One hour of planning could be the best investment you make this year

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Question one: What didn’t work well in 2018?
When planning, a good place to start is to ask yourself what were the one or two things that didn’t work well in 2018. Maybe you planned to sort out your super and didn’t get around to it? Or maybe you didn’t have a good enough handle on expenses (spending)? The idea is to identify one or two big things that didn’t turn out how you had hoped and develop a plan for rectifying them this year. Here’s two tips:
1. Often, it’s not a what, but who question. The best way to find a solution to a problem is not by asking “what steps do I need to take” but “who has solved this problem previously that can help me”. Seeking advice or experience from someone that has been in the same situation you will save a lot of time and help you avoid repeating common mistakes. People such as family, friends, colleagues or an independent advisor could help.
2. Who’s going to hold you accountable? Creating some sort of accountability has a massive impact on the likelihood of someone achieving a goal. When you set a goal, you must set a deadline and then have someone hold you accountable for achieving that deadline. That could be your spouse, friend, accountant or an independent advisor.

Question Two: What are the one or two things you need to achieve in 2019?
All of my financial advisory clients have a very clear understanding of the one or two priorities that they need to focus on/achieve this year in order to achieve their longer-term goals. This could include reducing/offsetting debt by a predetermined amount (through good cash flow management assisted with software), investing a certain amount in super, making regular share investments, investing in property or similar.

The key question to ask yourself now is “what can I do this year that will have the largest impact on my financial position by 2030?” This will force you to take a long-term view and not be distracted by short-term worries or noise. Don’t try and take on too many goals in 2019 – you really only what one to three goals. And if you are struggling to develop a long-term plan then grab a copy of Investopoly and follow the 8 rules outlined therein.

Question Three: Are you safe and secure?
It is very important that you periodically consider the things that are in place to protect your wealth and family and the start of a year is a perfect time to do that:
· Are your wills up-to-date? Are your executors still wiling and able to preform their role? Have any beneficiaries changed? Do you have current medical and financial powers of attorney? Should/does your will include a testamentary trust?
· Are your personal risk insurances (Life, TPD and income protection) up-to-date and still appropriate? Are they structured is a way that you are getting the best value for money i.e. deepest, quality cover for the lowest cost?
· Have you reviewed your mortgage interest rates? Should you convert loan repayments to principal and interest (to reduce the interest rate ≈ 0.50% p.a.)? Should you lock in access to equity now? Should you fix any interest rates (3-year fixed rates can be lower than variable rates)?
· Is your super invested in the correct investment option? If you have multiple super accounts, should you consolidate them? Have you looked at your super fund’s long term (10 year) performance compared to the leading industry funds (see here – refer to Chart 2)?
· Are your tax structures effective? Have you had a review of your taxation affairs?

One hour of planning could be the best investment you make this year

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 1dffad64-4d48-4c64-93a1-c1c935c76f04 Thu, 10 Jan 2019 14:32:00 +1100 685 investopoly,wemyss,prosolution,investing,independent advice,planning, 1 53 false The psychology of investing: house prices and fear mongering The psychology of investing: house prices and fear mongering Last weekend, The Australian newspaper published the blog I sent you last week where I predicted that the property market is close to the bottom and that prices next year would either be unchanged or improve slightly. Well, that article received over 60 comments and none of them were complimentary or supportive of my prediction. Upon reflection, I wanted to share some very important comments and observations.

Be aware of the story you are telling yourself

I am almost certain that 95% of the people that commented on my article have never invested in property and probably never will. They desperately want to prove that their decision to not invest was correct; “See, the market is about to crash. That’s why I didn’t invest!”. So, when there’s an opportunity for support the idea that investing in property is destined for failure, they jump at it.

Successful property investors tell themselves a story too. Most investors will say that the market will be fine in the long run so there’s nothing to worry about – it’s all just media hyperbole.

With this in mind, I would like to make two points:

Be careful that you don’t fool yourself

Once you understand that humans are susceptible to only seeing things (data, media, ideas, etc.) that validate the story we are telling ourselves, you must be careful to not be too one-eyed. One of my favourite sayings is “hold strong opinions, loosely”. Always leave room for the idea that your story could be wrong.

Be careful who you listen to

It is interesting to note that the economists that don’t invest in property themselves (personally) tend to always hold negative views about the property market. The ones that do invest in property tend to be more balanced. Also, negative property views make perfect clickbait and some commentators have built a career out of holding perpetual negative views – because it garnishes media attention. So, be careful who you listen to.

In short, people that voice very strong views tend to do so to defend (validate) past decisions.

The chorus is getting stronger for a loosening in credit policy

Even over the past week, the chorus of people that are saying that credit is too tight has been growing and getting louder. Business leaders, economists, RBA and media are all saying that it’s a threat to the wider economy, not just property. My view that credit will loosen in 2019 becomes firmer as the weeks pass.

Negative gearing might not even be banned if the ALP wins

Last week Bill Shorten said that he may delay the implementation of negative gearing until as late as mid-2020. This is the first time that Mr Shorten has hinted at a possible delay. Perhaps the ALP is slowly backing away from its policy especially in the face of a weaker property market.

The cash flow impact is totally offset by low interest rates

I make this point mostly as an interesting observation rather than trying to make a water-tight financial argument. It is interesting to note that the cash flow cost of a $650k investment property with no negative gearing at current interest rates is still less than when rates were 7% p.a. with negative gearing.

<

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Last weekend, The Australian newspaper published the blog I sent you last week where I predicted that the property market is close to the bottom and that prices next year would either be unchanged or improve slightly. Well, that article received over 60 comments and none of them were complimentary or supportive of my prediction. Upon reflection, I wanted to share some very important comments and observations.

Be aware of the story you are telling yourself

I am almost certain that 95% of the people that commented on my article have never invested in property and probably never will. They desperately want to prove that their decision to not invest was correct; “See, the market is about to crash. That’s why I didn’t invest!”. So, when there’s an opportunity for support the idea that investing in property is destined for failure, they jump at it.

Successful property investors tell themselves a story too. Most investors will say that the market will be fine in the long run so there’s nothing to worry about – it’s all just media hyperbole.

With this in mind, I would like to make two points:

Be careful that you don’t fool yourself

Once you understand that humans are susceptible to only seeing things (data, media, ideas, etc.) that validate the story we are telling ourselves, you must be careful to not be too one-eyed. One of my favourite sayings is “hold strong opinions, loosely”. Always leave room for the idea that your story could be wrong.

Be careful who you listen to

It is interesting to note that the economists that don’t invest in property themselves (personally) tend to always hold negative views about the property market. The ones that do invest in property tend to be more balanced. Also, negative property views make perfect clickbait and some commentators have built a career out of holding perpetual negative views – because it garnishes media attention. So, be careful who you listen to.

In short, people that voice very strong views tend to do so to defend (validate) past decisions.

The chorus is getting stronger for a loosening in credit policy

Even over the past week, the chorus of people that are saying that credit is too tight has been growing and getting louder. Business leaders, economists, RBA and media are all saying that it’s a threat to the wider economy, not just property. My view that credit will loosen in 2019 becomes firmer as the weeks pass.

Negative gearing might not even be banned if the ALP wins

Last week Bill Shorten said that he may delay the implementation of negative gearing until as late as mid-2020. This is the first time that Mr Shorten has hinted at a possible delay. Perhaps the ALP is slowly backing away from its policy especially in the face of a weaker property market.

The cash flow impact is totally offset by low interest rates

I make this point mostly as an interesting observation rather than trying to make a water-tight financial argument. It is interesting to note that the cash flow cost of a $650k investment property with no negative gearing at current interest rates is still less than when rates were 7% p.a. with negative gearing.

<

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 51db0953-0cbb-4c42-92f8-08cc4c94912f Wed, 12 Dec 2018 13:34:00 +1100 955 investopoly,wemyss,negative gearing,investment property 1 52 false I'm calling the bottom of the property market I'm calling the bottom of the property market I think we are very close to the bottom of the property market – if not already there. In fact, I believe that price growth next year will be positive. I appreciate that this prediction is contrary to most, if not all the predictions in the marketplace – most notably AMP Capital’s chief economist, Shayne Oliver predicted last week that property will fall by a further 15%. I explain my view below.

Predictions are worthless

The largest and longest study of expert predictions was undertaken by Professor Philip Tetlock in 2003. He studied 82,000 predictions over 25 years by 300 selected experts. Tetlock concludes that expert predictions were only slightly more accurate than random guesses e.g. coin tosses. Interestingly, experts with a greater media profile tended to do worse than their relatively unknown peers – which maybe suggests you should give more weight to my prediction than Shayne Oliver’s above.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> I think we are very close to the bottom of the property market – if not already there. In fact, I believe that price growth next year will be positive. I appreciate that this prediction is contrary to most, if not all the predictions in the marketplace – most notably AMP Capital’s chief economist, Shayne Oliver predicted last week that property will fall by a further 15%. I explain my view below.

Predictions are worthless

The largest and longest study of expert predictions was undertaken by Professor Philip Tetlock in 2003. He studied 82,000 predictions over 25 years by 300 selected experts. Tetlock concludes that expert predictions were only slightly more accurate than random guesses e.g. coin tosses. Interestingly, experts with a greater media profile tended to do worse than their relatively unknown peers – which maybe suggests you should give more weight to my prediction than Shayne Oliver’s above.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss f7aed5dd-4661-400c-8598-6041c35c53bd Wed, 05 Dec 2018 17:29:00 +1100 734 investopoly,wemyss,property prices,property investment 1 51 false Three things Paul Nugent taught me about investing in property Three things Paul Nugent taught me about investing in property Paul Nugent, the co-owner of Melbourne-based buyer’s agency, Wakelin Property Advisory, sadly passed away recently. I first met Paul back in 2004. Over the past 14+ years, Paul and I have given many presentations, shared a large number of mutual clients and have had numerous conversations and debates about property investment.

Not only was Paul a true gentleman with an encyclopaedic knowledge of the Melbourne property market, he had a fantastic sense of humour (although I never dared to say that to his face). I really enjoyed working with Paul and he'll be sadly missed. As you can imagine, over the past couple of weeks, I've been reflecting on the information and knowledge that Paul passed on to me through conversations and interactions. And this has inspired me to write this blog. I'd like to share with you the three things that Paul Nugent taught me about investing in property.

Paul’s lesson 1: Some properties just take time

As Warren Buffet says, "The stock market is an efficient device that transfers the money from the impatient to the patient." And that's the key ingredient for any robust, long-term investment strategy. That is, time and patience.

However, patience should not be confused with apathy. Of course, it is important to review investment performance and make sure that your assets possess the requisite fundamentals to deliver performance. This will give you the confidence that you have the right assets to help you achieve your financial and lifestyle goals. But, as Kenny Rogers says, you must “know when to hold them and know when to fold them". So, if you do have an impaired property, no amount of patience will make up for a poor-quality asset.

Paul would also often would remind me that some assets just take more time. And it’s patience and having faith that the fundamentals of an asset that will ultimately deliver long-term returns.

This concept is most applicable to entry-level investment grade assets. A lower quality asset (yet still investment grade) tend to take more time to deliver adequate investment returns. Therefore, if you own an entry-level investment grade asset, you will just have to have more patience and let time do its thing. Sometimes, this might mean that you need to hold onto a property for a couple of decades before you're satisfied with its overall return – so consider this when mapping out your plans.
I recall conversing with a very experienced and wealthy property investor and he was telling me about a property that he owned for 10 years. Over the first nine years of ownership, the property did nothing. And just over the last year, the property has more than doubled in value. Time and patience.

Paul’s lesson 2: Ignore all the indicators and just buy when you can afford it

One of the things that Paul used to say regularly is that, "You should invest when your circumstances allow it – not any sooner or later than that"

Put differently, ignore all the media noise (which is persistently negative) and advice from well-meaning family and friends. Over the last 16 years, I've only read one (say, one) article that has advised that now is a great time to buy property. Of course, I've read thousands of articles suggesting that property is no longer a good investment. The current environment is a perfect example of the negativity around property. Changes to negative gearing, falling property prices, tighter credit are possible reasons why you shouldn't invest today.

However, Paul would always advise you to ignore all these things and instead, only focus on what you can control, which is your own personal circumstances. We can't control markets, the media, tax legislation or the banks appetite

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Paul Nugent, the co-owner of Melbourne-based buyer’s agency, Wakelin Property Advisory, sadly passed away recently. I first met Paul back in 2004. Over the past 14+ years, Paul and I have given many presentations, shared a large number of mutual clients and have had numerous conversations and debates about property investment.

Not only was Paul a true gentleman with an encyclopaedic knowledge of the Melbourne property market, he had a fantastic sense of humour (although I never dared to say that to his face). I really enjoyed working with Paul and he'll be sadly missed. As you can imagine, over the past couple of weeks, I've been reflecting on the information and knowledge that Paul passed on to me through conversations and interactions. And this has inspired me to write this blog. I'd like to share with you the three things that Paul Nugent taught me about investing in property.

Paul’s lesson 1: Some properties just take time

As Warren Buffet says, "The stock market is an efficient device that transfers the money from the impatient to the patient." And that's the key ingredient for any robust, long-term investment strategy. That is, time and patience.

However, patience should not be confused with apathy. Of course, it is important to review investment performance and make sure that your assets possess the requisite fundamentals to deliver performance. This will give you the confidence that you have the right assets to help you achieve your financial and lifestyle goals. But, as Kenny Rogers says, you must “know when to hold them and know when to fold them". So, if you do have an impaired property, no amount of patience will make up for a poor-quality asset.

Paul would also often would remind me that some assets just take more time. And it’s patience and having faith that the fundamentals of an asset that will ultimately deliver long-term returns.

This concept is most applicable to entry-level investment grade assets. A lower quality asset (yet still investment grade) tend to take more time to deliver adequate investment returns. Therefore, if you own an entry-level investment grade asset, you will just have to have more patience and let time do its thing. Sometimes, this might mean that you need to hold onto a property for a couple of decades before you're satisfied with its overall return – so consider this when mapping out your plans.
I recall conversing with a very experienced and wealthy property investor and he was telling me about a property that he owned for 10 years. Over the first nine years of ownership, the property did nothing. And just over the last year, the property has more than doubled in value. Time and patience.

Paul’s lesson 2: Ignore all the indicators and just buy when you can afford it

One of the things that Paul used to say regularly is that, "You should invest when your circumstances allow it – not any sooner or later than that"

Put differently, ignore all the media noise (which is persistently negative) and advice from well-meaning family and friends. Over the last 16 years, I've only read one (say, one) article that has advised that now is a great time to buy property. Of course, I've read thousands of articles suggesting that property is no longer a good investment. The current environment is a perfect example of the negativity around property. Changes to negative gearing, falling property prices, tighter credit are possible reasons why you shouldn't invest today.

However, Paul would always advise you to ignore all these things and instead, only focus on what you can control, which is your own personal circumstances. We can't control markets, the media, tax legislation or the banks appetite

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss fa131c05-f3f3-44f9-8e27-2692380a3908 Thu, 29 Nov 2018 09:51:00 +1100 806 investopoly,wemyss,investment property,paul nugent,prosolution, 1 50 false Livevesting: a strategy that might suit some higher income earners Livevesting: a strategy that might suit some higher income earners Nice family homes in blue-chip suburbs are becoming increasingly difficult to acquire from an affordability perspective. This also puts pressure on one’s capacity to fund an investment strategy whilst repaying a large loan. So, a few years ago, a strategy called ‘rentvesting’ was popularised. But this has some limitations. I have formulated an alternative strategy which I’ll call livevesting.
What is rentvesting?
Rentvesting involves renting a house in a location where you would like to live. One that has all the lifestyle benefits and amenities that you desire, thereby freeing up as much cash and equity as possible to allow you to invest in pure investment locations. Investments that you can make without needing to consider lifestyle considerations.
In reality, there's a couple of challenges associated with rentvesting.
Firstly, there's an emotional consideration. That is, some people feel more comfortable living in a home of which they own rather than renting. To some people, rent money feels like dead money.
Secondly, schooling can be a concern. There's not a lot of certainty with respect to the longevity of the renting relationship. That is, the landlord can decide to sell or occupy the property and not renew your lease. If that happens, you've got to find a new home. And if your children are attending a school in that location, then you’re forced to find another house close to their schooling. That can be difficult at times, depending on what sort of rental stock is on the market.
And lastly, the other complication with rentvesting is a possible change of mind. If you implement a strategy that requires you to rent for the next twenty years, what happens if you change your mind in five years’ time? You might find that because you have exhausted your borrowing capacity, you’re
Spreading yourself too thin
One of the challenges that people are finding today, especially in light of the tighter credit market, is that they could be spreading themselves too thin. That is, their borrowing capacity might restrict them from being able to afford the size of home or location that they truly desire. Plus, their borrowing capacity might restrict how much they're able to invest once they have purchased their desired home. In this situation, sometimes people are seduced into compromising on the quality/location of both home and investments. In this situation, it's possible for people to end up owning two or three very average quality property assets.
A new strategy: Livevesting
In short, an alternative strategy is Livevesting. This involves using your full financial capacity to buy the best quality home in the best location that has all the investment fundamentals but also fulfils your lifestyle requirements.
This strategy has added benefits if you're able to buy a home that's located in a really good quality public school zone for two reasons. Firstly, properties located in public school zones that contain highly desired and rated public schools, tend to exhibit higher capital growth. And secondly, if you're able to buy a home in that school zone, perhaps that negates the need or desire to send your children to private schools, thereby saving you a lot of money.
The premise behind the Livevesting strategy is that you occupy a property that is expected to generate a significant amount of tax-free capital growth. You service the inevitably large mortgage through the period of occupation with the intention of crystallising the tax-free capital gains when you downsize in the future (i.e. prior to retirement). Part of that equity will help you fund retirement.
This strategy is distinct from one that involves you buying a home with a view to eventually repaying the mortgage and occupying that property for the foreseeable future. The benefit of this strategy is it allows you to direct all y

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Nice family homes in blue-chip suburbs are becoming increasingly difficult to acquire from an affordability perspective. This also puts pressure on one’s capacity to fund an investment strategy whilst repaying a large loan. So, a few years ago, a strategy called ‘rentvesting’ was popularised. But this has some limitations. I have formulated an alternative strategy which I’ll call livevesting.
What is rentvesting?
Rentvesting involves renting a house in a location where you would like to live. One that has all the lifestyle benefits and amenities that you desire, thereby freeing up as much cash and equity as possible to allow you to invest in pure investment locations. Investments that you can make without needing to consider lifestyle considerations.
In reality, there's a couple of challenges associated with rentvesting.
Firstly, there's an emotional consideration. That is, some people feel more comfortable living in a home of which they own rather than renting. To some people, rent money feels like dead money.
Secondly, schooling can be a concern. There's not a lot of certainty with respect to the longevity of the renting relationship. That is, the landlord can decide to sell or occupy the property and not renew your lease. If that happens, you've got to find a new home. And if your children are attending a school in that location, then you’re forced to find another house close to their schooling. That can be difficult at times, depending on what sort of rental stock is on the market.
And lastly, the other complication with rentvesting is a possible change of mind. If you implement a strategy that requires you to rent for the next twenty years, what happens if you change your mind in five years’ time? You might find that because you have exhausted your borrowing capacity, you’re
Spreading yourself too thin
One of the challenges that people are finding today, especially in light of the tighter credit market, is that they could be spreading themselves too thin. That is, their borrowing capacity might restrict them from being able to afford the size of home or location that they truly desire. Plus, their borrowing capacity might restrict how much they're able to invest once they have purchased their desired home. In this situation, sometimes people are seduced into compromising on the quality/location of both home and investments. In this situation, it's possible for people to end up owning two or three very average quality property assets.
A new strategy: Livevesting
In short, an alternative strategy is Livevesting. This involves using your full financial capacity to buy the best quality home in the best location that has all the investment fundamentals but also fulfils your lifestyle requirements.
This strategy has added benefits if you're able to buy a home that's located in a really good quality public school zone for two reasons. Firstly, properties located in public school zones that contain highly desired and rated public schools, tend to exhibit higher capital growth. And secondly, if you're able to buy a home in that school zone, perhaps that negates the need or desire to send your children to private schools, thereby saving you a lot of money.
The premise behind the Livevesting strategy is that you occupy a property that is expected to generate a significant amount of tax-free capital growth. You service the inevitably large mortgage through the period of occupation with the intention of crystallising the tax-free capital gains when you downsize in the future (i.e. prior to retirement). Part of that equity will help you fund retirement.
This strategy is distinct from one that involves you buying a home with a view to eventually repaying the mortgage and occupying that property for the foreseeable future. The benefit of this strategy is it allows you to direct all y

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 2311788c-c437-4158-b960-12e0a7071efb Thu, 22 Nov 2018 10:00:00 +1100 861 investopoly,wemyss, 1 49 false How do you change your investment strategy to suit your borrowing capacity? How do you change your investment strategy to suit your borrowing capacity? With the tightening in credit and the reduction in borrowing power, many investors capacity to invest has been adversely impacted. For example, an investor who planned to invest in two properties worth say $750k each might find that when it comes time to purchasing the second investment property, they can only afford to spend say $400k due to a contraction in borrowing capacity.

This begs the question, what do they do?

As I see it, they have four possible options:
  1. Reduce the budget for the next investment
  2. Invest in a regional or outer-suburb - so you can still get a house for example
  3. Consider other investments such as a regular gearing strategy into a portfolio of low-cost index funds.
  4. Wait to see if things change - will credit loosen up? Will your financial position strengthen? Will expenses (school fees) disappear?

I discuss these options in the below video and explain what approach I think is best.

The theme of my message is twofold:

You must NEVER compromise on the quality of your investments. Only quality assets will produce quality returns.

Typically, there’s more than one strategy to build wealth. A quality share portfolio is better than a sub-quality investment property.

An astute investment strategy should be robust and flexibly enough to navigate inevitable market challenges such as a tight credit market.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> With the tightening in credit and the reduction in borrowing power, many investors capacity to invest has been adversely impacted. For example, an investor who planned to invest in two properties worth say $750k each might find that when it comes time to purchasing the second investment property, they can only afford to spend say $400k due to a contraction in borrowing capacity.

This begs the question, what do they do?

As I see it, they have four possible options:
  1. Reduce the budget for the next investment
  2. Invest in a regional or outer-suburb - so you can still get a house for example
  3. Consider other investments such as a regular gearing strategy into a portfolio of low-cost index funds.
  4. Wait to see if things change - will credit loosen up? Will your financial position strengthen? Will expenses (school fees) disappear?

I discuss these options in the below video and explain what approach I think is best.

The theme of my message is twofold:

You must NEVER compromise on the quality of your investments. Only quality assets will produce quality returns.

Typically, there’s more than one strategy to build wealth. A quality share portfolio is better than a sub-quality investment property.

An astute investment strategy should be robust and flexibly enough to navigate inevitable market challenges such as a tight credit market.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 3d6517b4-b528-4017-b5e0-66c855b670bc Thu, 15 Nov 2018 09:31:00 +1100 748 investopoly,wemyss,investment,financial advice 1 48 false What if the property prices drop further after I buy? I will feel like a fool! What if the property prices drop further after I buy? I will feel like a fool! No one wants to buy at the peak of the property market! Imagine if you buy a property and then a month later property values fall and it takes more than 2 years to recover to the amount you paid for it. That two years of holding costs (interest) for no gain. Would you kick yourself if that happened? This begs the question, how important is property market timing?

How important is good timing?

I used the graph below to pick two points in time to measure the importance of “good timing”.

See chart here.

You will notice above that the median property price in Sydney fell between December 1988 and Dec 1990. Similarly, in Melbourne, the market fell between December 2007 and March 2009.

I considered the question; what if you had a crystal ball and instead of buying in 1988 in Sydney or 2007 in Melbourne, you held out and purchased a property at the bottom of the market in 1990 in Sydney or 2009 in Melbourne? How much better off would you be?

The table below illustrates the difference in equity and overall percentage returns over the total holding period.

See table here.

The percentage returns look significantly better. However, in fact, the dollar value difference isn’t that significant at all. The investor with poor timing in Sydney still has over $860k of equity in his property (versus $915k for the perfect investor). In Melbourne, the less successful investor has $255k (versus $325k).

This suggests that timing really doesn’t have a huge impact – even if you get it terribly wrong. In fact, the longer you hold onto your investment, the less timing really matters. I propose that if you plan to hold your investment property for 20 years or longer, timing is irrelevant.

Equity could have easily been zero

Importantly, these investors that had “poor timing” could have been a lot worse off. Imagine if they hadn’t invested in property at all? In this case their equity would have been zero!

No one knows

The fact of the matter is that no one really knows where the market is now (peak or otherwise) and what it will do over the next 2 to 3 years. No one. Zero. Nil. Zilch!
The largest study of forecasts that has ever been conducted concluded that forecasters were about as accurate as random guesses (and well known forecasters do worse than the average). As Warren Buffett says, “forecasters will fill your ear but never your wallet”.

Forget about worrying about short term (possible) movements – it will paralyse you, won’t add any value and probably encourage you to do nothing. Instead, focus ONLY on long term outcomes.

Aim is to outperform the median

With the correct asset selection principals, your goal is to outperform the median price return. The median is just the mid-point after all. It includes a bunch of terrible properties and some great ones too. It is a pretty rough and arguably meaningless measure of price movements. Therefore, it makes sense that you should be able to do better than the median if you apply a fundamentally sound approach. The higher the quality of the property, the less important timing is.

So what do you do about property market timing?

Simple. Don’t read sensationalist articles and media reports about property bubbles

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> No one wants to buy at the peak of the property market! Imagine if you buy a property and then a month later property values fall and it takes more than 2 years to recover to the amount you paid for it. That two years of holding costs (interest) for no gain. Would you kick yourself if that happened? This begs the question, how important is property market timing?

How important is good timing?

I used the graph below to pick two points in time to measure the importance of “good timing”.

See chart here.

You will notice above that the median property price in Sydney fell between December 1988 and Dec 1990. Similarly, in Melbourne, the market fell between December 2007 and March 2009.

I considered the question; what if you had a crystal ball and instead of buying in 1988 in Sydney or 2007 in Melbourne, you held out and purchased a property at the bottom of the market in 1990 in Sydney or 2009 in Melbourne? How much better off would you be?

The table below illustrates the difference in equity and overall percentage returns over the total holding period.

See table here.

The percentage returns look significantly better. However, in fact, the dollar value difference isn’t that significant at all. The investor with poor timing in Sydney still has over $860k of equity in his property (versus $915k for the perfect investor). In Melbourne, the less successful investor has $255k (versus $325k).

This suggests that timing really doesn’t have a huge impact – even if you get it terribly wrong. In fact, the longer you hold onto your investment, the less timing really matters. I propose that if you plan to hold your investment property for 20 years or longer, timing is irrelevant.

Equity could have easily been zero

Importantly, these investors that had “poor timing” could have been a lot worse off. Imagine if they hadn’t invested in property at all? In this case their equity would have been zero!

No one knows

The fact of the matter is that no one really knows where the market is now (peak or otherwise) and what it will do over the next 2 to 3 years. No one. Zero. Nil. Zilch!
The largest study of forecasts that has ever been conducted concluded that forecasters were about as accurate as random guesses (and well known forecasters do worse than the average). As Warren Buffett says, “forecasters will fill your ear but never your wallet”.

Forget about worrying about short term (possible) movements – it will paralyse you, won’t add any value and probably encourage you to do nothing. Instead, focus ONLY on long term outcomes.

Aim is to outperform the median

With the correct asset selection principals, your goal is to outperform the median price return. The median is just the mid-point after all. It includes a bunch of terrible properties and some great ones too. It is a pretty rough and arguably meaningless measure of price movements. Therefore, it makes sense that you should be able to do better than the median if you apply a fundamentally sound approach. The higher the quality of the property, the less important timing is.

So what do you do about property market timing?

Simple. Don’t read sensationalist articles and media reports about property bubbles

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 9e84278b-a2a3-4838-a773-2517d9bd62c9 Thu, 08 Nov 2018 12:22:00 +1100 574 investopoly,wemyss,property investing,market timing 1 47 false Value investing: what is it, why it works and how to do it Value investing: what is it, why it works and how to do it You must have a robust methodology for selecting the right share, property or bond to invest in. If you select the right asset, your investment returns are likely to be very healthy in the long run.

However, if you make a mistake, it is likely to cost you money – in terms of opportunity cost and/or in real terms.

The best way to prevent making a mistake is to use a methodology for selecting the right asset that is proven to work. In this blog I outline the four different methodologies and the two that I think are best to use in combination, where possible.

There are four different asset selection methodologies

There are many different asset selection approaches which can have their own subtleties and idiosyncrasies. However, every methodology can be broadly allocated into four different categories:

1. Value investing
This involves identifying assets or sectors that are intrinsically undervalued. Markets are not always perfectly efficient and sometimes assets transact for amounts less than fair market value. This could be due to factors such as a motivated seller, misinformation, market sentiment (fear) and so on.

2. Growth investing
This involves identifying assets or sectors that have high growth prospects. This approach is less concerned with the price paid for the asset compared to its appraised value - it’s all about the idea that you can buy this asset today for $x and that price will look cheap in the future after the expected growth has materialised. This methodology requires you to form a view as to what the future growth opportunities could be which is often highly subjective.

3. Fundamental investing
This approach involves identifying the assets or sectors that have the strongest underlying fundamentals such that the asset quality is extremely high. This approach is less concerned about the price paid and usually the assets growth prospects might be already reflected in the current price. The thesis underlying this strategy is that investment returns are directly linked to asset quality i.e. you can only expect above average returns from above average quality assets.

4. Technical analysis
This approach involves looking for trends in data and statistics (such as price movements and volume) to identify assets and sectors that are expected to deliver above average returns in the short or longer term

Fundamental with a value tilt, if possible

The lowest risk approach by far is fundamental investing. Asset quality will typically persist longer than market mispricing or unrecognised growth prospects. As Warren Buffett says, he would rather buy a wonderful stock at a fair price than a fair stock at a wonderful price.

However, sometimes it is possible to employ both a fundamental and value approach. That is, for example, sometimes you can buy a wonderful property or stock for a wonderful price. But, you must never pursue a value approach at the cost of the investment’s fundamentals. That is, never compromise on asset quality.

You can reduce your risk by using an evidenced-based approach

An evidenced-based approach involves only adopting an asset selection methodology where there is overwhelming evidence that it will produce the desired investment returns. Too many people adopt investment methodologies and approaches without considering whether the evidence stacks up and that is just too risky – it is totally unnecessary to take that risk. Therefore, if you want to find a fundamental approach to adopt when selecting the right residential propert

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> You must have a robust methodology for selecting the right share, property or bond to invest in. If you select the right asset, your investment returns are likely to be very healthy in the long run.

However, if you make a mistake, it is likely to cost you money – in terms of opportunity cost and/or in real terms.

The best way to prevent making a mistake is to use a methodology for selecting the right asset that is proven to work. In this blog I outline the four different methodologies and the two that I think are best to use in combination, where possible.

There are four different asset selection methodologies

There are many different asset selection approaches which can have their own subtleties and idiosyncrasies. However, every methodology can be broadly allocated into four different categories:

1. Value investing
This involves identifying assets or sectors that are intrinsically undervalued. Markets are not always perfectly efficient and sometimes assets transact for amounts less than fair market value. This could be due to factors such as a motivated seller, misinformation, market sentiment (fear) and so on.

2. Growth investing
This involves identifying assets or sectors that have high growth prospects. This approach is less concerned with the price paid for the asset compared to its appraised value - it’s all about the idea that you can buy this asset today for $x and that price will look cheap in the future after the expected growth has materialised. This methodology requires you to form a view as to what the future growth opportunities could be which is often highly subjective.

3. Fundamental investing
This approach involves identifying the assets or sectors that have the strongest underlying fundamentals such that the asset quality is extremely high. This approach is less concerned about the price paid and usually the assets growth prospects might be already reflected in the current price. The thesis underlying this strategy is that investment returns are directly linked to asset quality i.e. you can only expect above average returns from above average quality assets.

4. Technical analysis
This approach involves looking for trends in data and statistics (such as price movements and volume) to identify assets and sectors that are expected to deliver above average returns in the short or longer term

Fundamental with a value tilt, if possible

The lowest risk approach by far is fundamental investing. Asset quality will typically persist longer than market mispricing or unrecognised growth prospects. As Warren Buffett says, he would rather buy a wonderful stock at a fair price than a fair stock at a wonderful price.

However, sometimes it is possible to employ both a fundamental and value approach. That is, for example, sometimes you can buy a wonderful property or stock for a wonderful price. But, you must never pursue a value approach at the cost of the investment’s fundamentals. That is, never compromise on asset quality.

You can reduce your risk by using an evidenced-based approach

An evidenced-based approach involves only adopting an asset selection methodology where there is overwhelming evidence that it will produce the desired investment returns. Too many people adopt investment methodologies and approaches without considering whether the evidence stacks up and that is just too risky – it is totally unnecessary to take that risk. Therefore, if you want to find a fundamental approach to adopt when selecting the right residential propert

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss e118415d-dbc8-40a9-a4f7-ab0131ec2900 Thu, 01 Nov 2018 10:38:00 +1100 939 investopoly,wemyss,prosolution,value ivesting,property investing 1 46 false We're in a credit crunch - here's 5 strategies to deal with it We're in a credit crunch - here's 5 strategies to deal with it There has been a lot of commentary in the media about the “credit crunch” that we are in at the moment. Why is the credit crunch going to impact you and your plans? And what can you do about it?

Why has credit tightened?
Over the past year I have written (here and here) about how the government has tightened up lending standards in an effort to cool the property market and reduce the volume of interest only loans. The reason for this is that they didn’t want Australians over-borrowing whilst interest rates were very low, and they didn’t want investors speculating in the property market. They have certainly achieved their aims. The property market has cooled and investor and interest only loans have fallen dramatically.

The RBA is out of touch
The RBA seems to be comfortable with the credit tightening as noted in its most recent minutes:

“They noted that most borrowers took out a loan that was substantially smaller than the maximum loan that lenders were prepared to offer; three-quarters of borrowers had taken out loans that were less than 80 per cent of their maximum borrowing capacity based on serviceability considerations. This suggested that relatively few borrowers would have been constrained by the tightening in lending standards that had reduced maximum loan sizes to date.”

The RBA’s comment is ridiculous because this statistic doesn’t include the fact that many borrowers would have had loans declined. And, of far greater importance, many prospective borrowers would have been told that they would no longer qualify for the borrowings they desire by their mortgage broker or banker and in these cases would never proceeded to a formal application. So, to say that relatively few borrowers have been constrained by the credit tightening shows how out of touch the RBA is and that is a worry!

Anecdotally, I estimate that a least 30% of our clients have been impacted by the credit crunch i.e. they are willing and able to borrow more but cannot do so. Given that our clients almost always have higher than average earnings, the broader market has definitely been significantly impacted.

Applying for a mortgage can be like a criminal forensic investigation
Unfortunately, in many instances, I liken the loan approval process now to a criminal forensic investigation and the applicants are assumed to be guilty until proven innocent. The lender will trawl through your bank and credit card statements and ask questions about where you are spending your money and why. They will want third-party documentation to verify the existence of every asset, liability and commitment (and sometimes they want multiple forms of verification!). These days it can be an intrusive and laborious process.

To me, what is going on feels a lot more severe than just prudential lending standards. I wonder if this is how the banks are repaying the government for introducing the 'major bank levy' (tax) and the Royal Commission? Maybe the banks are thinking “we’ll show the government whose boss… we’ll restrict money supply and potentially cause economic problems such as a falling property market, lower confidence, etc.”. Maybe they are using the excuse of “tighter credit” to show how much power they have?

Some stories from our office that will blow your mind
I would like to share with you some stories that demonstrate just how crazily tight credit has become:
§ A client

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> There has been a lot of commentary in the media about the “credit crunch” that we are in at the moment. Why is the credit crunch going to impact you and your plans? And what can you do about it?

Why has credit tightened?
Over the past year I have written (here and here) about how the government has tightened up lending standards in an effort to cool the property market and reduce the volume of interest only loans. The reason for this is that they didn’t want Australians over-borrowing whilst interest rates were very low, and they didn’t want investors speculating in the property market. They have certainly achieved their aims. The property market has cooled and investor and interest only loans have fallen dramatically.

The RBA is out of touch
The RBA seems to be comfortable with the credit tightening as noted in its most recent minutes:

“They noted that most borrowers took out a loan that was substantially smaller than the maximum loan that lenders were prepared to offer; three-quarters of borrowers had taken out loans that were less than 80 per cent of their maximum borrowing capacity based on serviceability considerations. This suggested that relatively few borrowers would have been constrained by the tightening in lending standards that had reduced maximum loan sizes to date.”

The RBA’s comment is ridiculous because this statistic doesn’t include the fact that many borrowers would have had loans declined. And, of far greater importance, many prospective borrowers would have been told that they would no longer qualify for the borrowings they desire by their mortgage broker or banker and in these cases would never proceeded to a formal application. So, to say that relatively few borrowers have been constrained by the credit tightening shows how out of touch the RBA is and that is a worry!

Anecdotally, I estimate that a least 30% of our clients have been impacted by the credit crunch i.e. they are willing and able to borrow more but cannot do so. Given that our clients almost always have higher than average earnings, the broader market has definitely been significantly impacted.

Applying for a mortgage can be like a criminal forensic investigation
Unfortunately, in many instances, I liken the loan approval process now to a criminal forensic investigation and the applicants are assumed to be guilty until proven innocent. The lender will trawl through your bank and credit card statements and ask questions about where you are spending your money and why. They will want third-party documentation to verify the existence of every asset, liability and commitment (and sometimes they want multiple forms of verification!). These days it can be an intrusive and laborious process.

To me, what is going on feels a lot more severe than just prudential lending standards. I wonder if this is how the banks are repaying the government for introducing the 'major bank levy' (tax) and the Royal Commission? Maybe the banks are thinking “we’ll show the government whose boss… we’ll restrict money supply and potentially cause economic problems such as a falling property market, lower confidence, etc.”. Maybe they are using the excuse of “tighter credit” to show how much power they have?

Some stories from our office that will blow your mind
I would like to share with you some stories that demonstrate just how crazily tight credit has become:
§ A client

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 94b7480f-1a87-4d67-8d5d-8ec6ef7dad02 Wed, 24 Oct 2018 10:00:00 +1100 943 investopoly,wemyss,credit crunch,investment loans, 1 45 false How many investment properties do you need to fund retirement? How many investment properties do you need to fund retirement? How many properties do you think you need to own to generate enough wealth to fund a comfortable retirement? Most people think they need more than 3 properties to become independently wealth.

Of course, the answer will be different for everyone because it depends on your income, existing assets, time until you retire, goals and other factors. However, having been involved in developing hundreds of investment strategies (possibly more than a thousand), I can tell you that 90 per cent of people need to hold somewhere between one or two investment-grade properties. It is unusual for an average person to need to invest in three or more properties.

Quality is the key

Indeed, the number of properties is not really the most relevant measure. In fact, its meaningless. More important is the quality of the assets that you own and the amount of equity you have in them. I would prefer to own only one sensational investment property compared to three average ones.

Maybe it’s a sales pitch

Some books and property promoters suggest that investors should aim for acquiring a portfolio of more than three investment properties. However, I fail to see how this could work and think this is a high-risk approach.

You either have to acquire several low-value properties (and are therefore you are likely to compromise the asset quality, meaning they aren’t investment-grade) or, if you are buying investment-grade property, you must borrow a significant amount of money. I have seen profiles of investors (in property magazines) who have $2 million to $3 million in loans when their family income is between $100,000 and $150,000 p.a. in total. This is a very high-risk approach and a recipe for disaster in my opinion. Given the immense amount of credit tightening over the past 1 to 2 years, it would be difficult to access this level of financing anymore (which is a good thing).

Think about debt

Debt is a great servant but a very bad master. You must control it, not the other way around. Therefore, when borrowing to invest in property you must conservatively assess your capacity to be able to service the debt and sleep at night regardless of the variability in interest rates and repayments.

Also, you need to have a debt exit strategy. That is, how will you repay the debt when you retire? I typically like my clients to have little to no debt when they enter retirement because, at this stage of life, they will be very sensitive to interest rate changes (because their only income source is investment income).

Therefore, if an investment strategy involves borrowing a lot of money to invest, you must also develop a plan for how you will reduce debt before retirement. This might be achieved through gradual debt repayment funded from your surplus cash flow, the sale of investments on or after retirement (property or shares) or drawing a lump sum from super – or a combination of these things. The point is, you must have a clear debt repayment strategy.

Constructing your investment property portfolio

You need to consider a few factors when constructing or planning out what types of properties you will include in your property portfolio. These factors relate to diversification of your portfolio and include:

1) Diversifying geographically
Spread your properties among different suburbs and market segments, and even consider investing in different capital cities. The idea behind this is that markets do not grow uniformly so, by diversifying geographically, you will hopefully smooth your return (growth). Growing your asset value will allow you to access further equity to assist you in building wealth.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> How many properties do you think you need to own to generate enough wealth to fund a comfortable retirement? Most people think they need more than 3 properties to become independently wealth.

Of course, the answer will be different for everyone because it depends on your income, existing assets, time until you retire, goals and other factors. However, having been involved in developing hundreds of investment strategies (possibly more than a thousand), I can tell you that 90 per cent of people need to hold somewhere between one or two investment-grade properties. It is unusual for an average person to need to invest in three or more properties.

Quality is the key

Indeed, the number of properties is not really the most relevant measure. In fact, its meaningless. More important is the quality of the assets that you own and the amount of equity you have in them. I would prefer to own only one sensational investment property compared to three average ones.

Maybe it’s a sales pitch

Some books and property promoters suggest that investors should aim for acquiring a portfolio of more than three investment properties. However, I fail to see how this could work and think this is a high-risk approach.

You either have to acquire several low-value properties (and are therefore you are likely to compromise the asset quality, meaning they aren’t investment-grade) or, if you are buying investment-grade property, you must borrow a significant amount of money. I have seen profiles of investors (in property magazines) who have $2 million to $3 million in loans when their family income is between $100,000 and $150,000 p.a. in total. This is a very high-risk approach and a recipe for disaster in my opinion. Given the immense amount of credit tightening over the past 1 to 2 years, it would be difficult to access this level of financing anymore (which is a good thing).

Think about debt

Debt is a great servant but a very bad master. You must control it, not the other way around. Therefore, when borrowing to invest in property you must conservatively assess your capacity to be able to service the debt and sleep at night regardless of the variability in interest rates and repayments.

Also, you need to have a debt exit strategy. That is, how will you repay the debt when you retire? I typically like my clients to have little to no debt when they enter retirement because, at this stage of life, they will be very sensitive to interest rate changes (because their only income source is investment income).

Therefore, if an investment strategy involves borrowing a lot of money to invest, you must also develop a plan for how you will reduce debt before retirement. This might be achieved through gradual debt repayment funded from your surplus cash flow, the sale of investments on or after retirement (property or shares) or drawing a lump sum from super – or a combination of these things. The point is, you must have a clear debt repayment strategy.

Constructing your investment property portfolio

You need to consider a few factors when constructing or planning out what types of properties you will include in your property portfolio. These factors relate to diversification of your portfolio and include:

1) Diversifying geographically
Spread your properties among different suburbs and market segments, and even consider investing in different capital cities. The idea behind this is that markets do not grow uniformly so, by diversifying geographically, you will hopefully smooth your return (growth). Growing your asset value will allow you to access further equity to assist you in building wealth.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 93d4bddd-9865-4b3b-94a3-128b9cababa7 Thu, 18 Oct 2018 10:24:00 +1100 774 wemyss,investopoly,property investment,financial planning, 1 44 false How to structure your will, testamentary trusts, avoid fights and what else to do How to structure your will, testamentary trusts, avoid fights and what else to do The two certainties: death and taxes

There are two unfortunate certainties in life; death and taxes. And, unfortunately, tax cannot be avoided (legitimately) even by dying.
Australia is one of the very few countries in the world that has no death taxes. However, although there is no tax levied on the property of a deceased person, there may be tax consequences flowing from the dealings with the deceased assets.

This blog outlines some of the key considerations you must address.

The deceased estate

When a person dies, an executor or administrator takes control of their assets. The executor named under the (valid) Will is known as the legal representative. An administrator is appointed by the probate court when a will does not exist.

A deceased estate is not a separate legal entity but a relationship between the executor/administrator and the beneficiaries – much like a trust. The deceased estate would comprise of all assets owned by the deceased as at the date of death – except for any assets owned as joint tenants, superannuation and any assets held in a discretionary trust.

A Will covers matters such as how the assets should be shared amongst family members and other beneficiaries, trusts to be established subsequent to death, bequests to charities and institutions and funeral instructions.

A Will is a legal document and therefore should be drafted by a lawyer preferably one who practices in the area of Wills and Probate and has tax knowledge – or at least a lawyer who would work in conjunction with an accountant who is familiar with the tax treatment of such estates.

What if you don’t have a will?

If you die intestate, the Supreme Court will decide who will be your administered and who will benefit from your estate. Dying intestate creates a lot more work, cost and stress for the people you leave behind. It also might result in people benefiting from your estate who you don’t want to benefit. Therefore, for the sake of a relatively small cost and to ease some of the stress on your family, it is always best to have a valid and up-to-date will.

If you’re a single and have little assets and no special beneficiaries, a cheap will kit will probably sufficive. However, if you have any significant assets or liability, children, a spouse and so on, you really need personalised legal advice.

Taxation of assets received from a deceased estate

Death is generally not a trigger point for taxation. Assets owned by the deceased are passed onto beneficiaries without any immediate capital gains tax consequences. When an asset passes to a beneficiary, the beneficiary becomes the owner of the asset and generally inherits the same cost base and tax treatment of the deceased.

For example, if you were to inherit the main residence of the deceased, you would be eligible for the main residence CGT exemption, if the property is sold within 2 years. If you were to inherit an investment property held by the deceased, and sell it at a later stage, your cost base would be the purchase price (plus costs) initially paid by the deceased person.

Controlling assets from the grave

Often people wish to regulate the time/age their beneficiaries obtain control of the estate. For example, it is best to avoid a situation where a beneficiary inherits a substantial amount of money when they are not mature enough to make prudent financial decisions, may be under the influence of an addiction (such as gambling or drugs) or at risk of a relationship breakdown. The best way to accommodate these risks is to provide your executor with clear instructions and e

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> The two certainties: death and taxes

There are two unfortunate certainties in life; death and taxes. And, unfortunately, tax cannot be avoided (legitimately) even by dying.
Australia is one of the very few countries in the world that has no death taxes. However, although there is no tax levied on the property of a deceased person, there may be tax consequences flowing from the dealings with the deceased assets.

This blog outlines some of the key considerations you must address.

The deceased estate

When a person dies, an executor or administrator takes control of their assets. The executor named under the (valid) Will is known as the legal representative. An administrator is appointed by the probate court when a will does not exist.

A deceased estate is not a separate legal entity but a relationship between the executor/administrator and the beneficiaries – much like a trust. The deceased estate would comprise of all assets owned by the deceased as at the date of death – except for any assets owned as joint tenants, superannuation and any assets held in a discretionary trust.

A Will covers matters such as how the assets should be shared amongst family members and other beneficiaries, trusts to be established subsequent to death, bequests to charities and institutions and funeral instructions.

A Will is a legal document and therefore should be drafted by a lawyer preferably one who practices in the area of Wills and Probate and has tax knowledge – or at least a lawyer who would work in conjunction with an accountant who is familiar with the tax treatment of such estates.

What if you don’t have a will?

If you die intestate, the Supreme Court will decide who will be your administered and who will benefit from your estate. Dying intestate creates a lot more work, cost and stress for the people you leave behind. It also might result in people benefiting from your estate who you don’t want to benefit. Therefore, for the sake of a relatively small cost and to ease some of the stress on your family, it is always best to have a valid and up-to-date will.

If you’re a single and have little assets and no special beneficiaries, a cheap will kit will probably sufficive. However, if you have any significant assets or liability, children, a spouse and so on, you really need personalised legal advice.

Taxation of assets received from a deceased estate

Death is generally not a trigger point for taxation. Assets owned by the deceased are passed onto beneficiaries without any immediate capital gains tax consequences. When an asset passes to a beneficiary, the beneficiary becomes the owner of the asset and generally inherits the same cost base and tax treatment of the deceased.

For example, if you were to inherit the main residence of the deceased, you would be eligible for the main residence CGT exemption, if the property is sold within 2 years. If you were to inherit an investment property held by the deceased, and sell it at a later stage, your cost base would be the purchase price (plus costs) initially paid by the deceased person.

Controlling assets from the grave

Often people wish to regulate the time/age their beneficiaries obtain control of the estate. For example, it is best to avoid a situation where a beneficiary inherits a substantial amount of money when they are not mature enough to make prudent financial decisions, may be under the influence of an addiction (such as gambling or drugs) or at risk of a relationship breakdown. The best way to accommodate these risks is to provide your executor with clear instructions and e

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss c7198b2d-fd9b-4528-9775-9aae22c2e09e Thu, 11 Oct 2018 11:22:00 +1100 815 investopoly,investing,wemyss,wills,testamentary trust,asset protection 1 43 false Asset protection: when to be concerned and what to do Asset protection: when to be concerned and what to do The last thing you want to happen is that you work hard throughout your whole career, invest successfully and then lose a large amount of your wealth due to an unexpected event. Therefore, asset protection is just as important as asset accumulation. Asset protection is a subject that most investors fail to consider, don’t get good advice on and/or take the wrong advice. The goal of this blog is to give you an overview of the key risks people typically need to consider and what to do about them.

Be careful who you ask for advice

Over the past few months I have come across a few people that have paid a lot of money (over $5,000) to lawyer or accountant for asset protection advice. In every case, they ended up with a complex and convoluted structure which they arguably didn’t need.

My advice is simple. Get independent advice before paying anyone a lot of money for asset protection advice. Someone is independent when they have no asset protection services to offer you other than their advice. Independent financial advisors are typically the best source of advice as they rarely set up structures (such as companies and trusts) or provide legal services. That is, they have no vested interest in the advice given.

Asset protection risk: Self employed

If you are self-employed, you might be exposed to additional risks. There are two important points to consider:

§ Firstly, your risk is that you get sued. You must ensure that you have the correct business insurances in place including, product liability, warranty and indemnity, business interruption, WorkCover insurance, professional indemnity, public liability and so on. Also, you must ensure that your business is structured correctly so that your liability is limited (e.g. trading company with the shares owned by a discretionary trust). Make sure that you don’t leave any retained profits in the trading company – the company must have as fewer assets as possible.

§ Secondly, typically, there are only two risks that directors of companies can be held personally liable for being; trading whilst insolvent and not maintaining a safe workplace. Therefore, if you are a director of a trading company make sure you receive up-to-date financial reports and if you don’t understand them, ask questions or get advice. If your business maintains a higher risk workplace (e.g. manufacturing, construction, etc.), make sure you are confident that you are maintaining a safe workplace.

Asset protection risk: Occupational risks

It is true that certain occupations carry a higher level of risk. A good example is obstetrics because an error or mistake whilst practicing could result in a lost life. Even so, it is important to consider the depth and history of professional indemnity insurance cover. This cover is typically very deep, and the experience of personal loss is very limited – almost non-existent – even for the highest risk occupations. The most likely situation where personal loss could be experienced is if one’s actions were considered ‘criminally negligent’. Therefore, if you conduct yourself in a prudent and professional manner it is probably unlikely that you need to be concerned about suffering loss because of your occupation.

Asset protection risk: Property investors

Property investors could be exposed to additional risks such as a tenant or guest suffering an injury whilst attending your property. Also, certain properties carry higher r

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> The last thing you want to happen is that you work hard throughout your whole career, invest successfully and then lose a large amount of your wealth due to an unexpected event. Therefore, asset protection is just as important as asset accumulation. Asset protection is a subject that most investors fail to consider, don’t get good advice on and/or take the wrong advice. The goal of this blog is to give you an overview of the key risks people typically need to consider and what to do about them.

Be careful who you ask for advice

Over the past few months I have come across a few people that have paid a lot of money (over $5,000) to lawyer or accountant for asset protection advice. In every case, they ended up with a complex and convoluted structure which they arguably didn’t need.

My advice is simple. Get independent advice before paying anyone a lot of money for asset protection advice. Someone is independent when they have no asset protection services to offer you other than their advice. Independent financial advisors are typically the best source of advice as they rarely set up structures (such as companies and trusts) or provide legal services. That is, they have no vested interest in the advice given.

Asset protection risk: Self employed

If you are self-employed, you might be exposed to additional risks. There are two important points to consider:

§ Firstly, your risk is that you get sued. You must ensure that you have the correct business insurances in place including, product liability, warranty and indemnity, business interruption, WorkCover insurance, professional indemnity, public liability and so on. Also, you must ensure that your business is structured correctly so that your liability is limited (e.g. trading company with the shares owned by a discretionary trust). Make sure that you don’t leave any retained profits in the trading company – the company must have as fewer assets as possible.

§ Secondly, typically, there are only two risks that directors of companies can be held personally liable for being; trading whilst insolvent and not maintaining a safe workplace. Therefore, if you are a director of a trading company make sure you receive up-to-date financial reports and if you don’t understand them, ask questions or get advice. If your business maintains a higher risk workplace (e.g. manufacturing, construction, etc.), make sure you are confident that you are maintaining a safe workplace.

Asset protection risk: Occupational risks

It is true that certain occupations carry a higher level of risk. A good example is obstetrics because an error or mistake whilst practicing could result in a lost life. Even so, it is important to consider the depth and history of professional indemnity insurance cover. This cover is typically very deep, and the experience of personal loss is very limited – almost non-existent – even for the highest risk occupations. The most likely situation where personal loss could be experienced is if one’s actions were considered ‘criminally negligent’. Therefore, if you conduct yourself in a prudent and professional manner it is probably unlikely that you need to be concerned about suffering loss because of your occupation.

Asset protection risk: Property investors

Property investors could be exposed to additional risks such as a tenant or guest suffering an injury whilst attending your property. Also, certain properties carry higher r

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 5b6bfe00-d71a-465a-abcd-868e0263b333 Thu, 04 Oct 2018 11:55:00 +1000 719 investopoly,asset protection,wemyss,investing,financial advice, 1 42 false Does minimising your taxes impair your ability to borrow? Does minimising your taxes impair your ability to borrow? Paying minimal tax probably appeals to most people. And as tax is often our biggest lifetime cash outflow, it might seem logical that minimising it is a great way to build wealth. However, I’m going to suggest that perhaps you need to pay more tax to build wealth. A higher tax bill typically means you have a higher income and therefore a higher borrowing capacity.

I have seen lots of people cut their nose off to spite their face by focusing on the wrong things at the wrong times. Sometimes tax minimisation is more important than borrowing capacity maximisation. However, the reverse can also be true too. You must understand when to focus on one and not the other – particularly in this very tight credit environment.

The wealth impact of minimising your taxes

Even a modest increase in your income can translate to a significant increase in your borrowing capacity. For example, if your taxable income increased by $37,000 from $150,000 to $187,000 it would increase the amount of tax you pay by approximately $15,000. However, I estimate that this higher income will increase your borrowing capacity by approximately $300,000. This additional borrowing capacity might be the difference between affording an entry-level investment-grade property at say $500,000 versus a higher-grade property for say $800,000. A higher-grade property should, in the long-run, result in a higher capital growth rate. The difference between the value of these two properties in 10 years’ time could easily be more than $500,000 in today’s dollars[1].

I am sure that the investor that buys the better-quality asset (at $800,000) won’t even think about the higher tax bill he had to pay 10 years earlier. This is why it’s important to take a long-term view when making financial decisions.

Minimal tax = minimal borrowing = big disadvantages?

Every now and then we receive enquiries from people that operate their own businesses and report very little taxable income (BTW, I’m not certain their tax minimisation strategies are always legal). These people then complain that the banks won’t lend them any money. I have no sympathy for people in this situation as you can’t have it both ways.

Putting aside the moral and ethical obligation to pay our fair share of taxes, we also must realise the opportunity cost resulting from self-sabotaging your own borrowing capacity. Doing so retards your ability to borrow to invest and therefore build wealth. In the past, this was less of an issue with low-doc loans. However, these days, no such options exist so if you decide to report a low taxable income then your borrowing capacity will be equally low.

Timing your tax minimisation strategies

There are several strategies that tax advisors might employ to legally reduce your taxable income including:
  • Delaying the billing/receipt of income until after the end of the financial year;
  • Prepaying expenses or bringing forward expenses into the current financial year;
  • Claiming a portion of your personal expenses for business use e.g. home office, phone, car and so on; and
  • Distributing income to people outside of your immediate family.

As the above list demonstrates, in any one year many people have the capacity to legally influence their taxable income and their decisions can have a material impact on their borrowing capacity. For example, some lenders only want to see one years’ worth of tax returns (most recent year) whereas others will work on the average of the last two years. Therefore, in order to maxim

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Paying minimal tax probably appeals to most people. And as tax is often our biggest lifetime cash outflow, it might seem logical that minimising it is a great way to build wealth. However, I’m going to suggest that perhaps you need to pay more tax to build wealth. A higher tax bill typically means you have a higher income and therefore a higher borrowing capacity.

I have seen lots of people cut their nose off to spite their face by focusing on the wrong things at the wrong times. Sometimes tax minimisation is more important than borrowing capacity maximisation. However, the reverse can also be true too. You must understand when to focus on one and not the other – particularly in this very tight credit environment.

The wealth impact of minimising your taxes

Even a modest increase in your income can translate to a significant increase in your borrowing capacity. For example, if your taxable income increased by $37,000 from $150,000 to $187,000 it would increase the amount of tax you pay by approximately $15,000. However, I estimate that this higher income will increase your borrowing capacity by approximately $300,000. This additional borrowing capacity might be the difference between affording an entry-level investment-grade property at say $500,000 versus a higher-grade property for say $800,000. A higher-grade property should, in the long-run, result in a higher capital growth rate. The difference between the value of these two properties in 10 years’ time could easily be more than $500,000 in today’s dollars[1].

I am sure that the investor that buys the better-quality asset (at $800,000) won’t even think about the higher tax bill he had to pay 10 years earlier. This is why it’s important to take a long-term view when making financial decisions.

Minimal tax = minimal borrowing = big disadvantages?

Every now and then we receive enquiries from people that operate their own businesses and report very little taxable income (BTW, I’m not certain their tax minimisation strategies are always legal). These people then complain that the banks won’t lend them any money. I have no sympathy for people in this situation as you can’t have it both ways.

Putting aside the moral and ethical obligation to pay our fair share of taxes, we also must realise the opportunity cost resulting from self-sabotaging your own borrowing capacity. Doing so retards your ability to borrow to invest and therefore build wealth. In the past, this was less of an issue with low-doc loans. However, these days, no such options exist so if you decide to report a low taxable income then your borrowing capacity will be equally low.

Timing your tax minimisation strategies

There are several strategies that tax advisors might employ to legally reduce your taxable income including:
  • Delaying the billing/receipt of income until after the end of the financial year;
  • Prepaying expenses or bringing forward expenses into the current financial year;
  • Claiming a portion of your personal expenses for business use e.g. home office, phone, car and so on; and
  • Distributing income to people outside of your immediate family.

As the above list demonstrates, in any one year many people have the capacity to legally influence their taxable income and their decisions can have a material impact on their borrowing capacity. For example, some lenders only want to see one years’ worth of tax returns (most recent year) whereas others will work on the average of the last two years. Therefore, in order to maxim

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 9e4f1861-86b4-4d4e-904c-d38a21ba48cd Wed, 26 Sep 2018 12:25:00 +1000 582 investopoly,wemyss,minimising tax,maximising borrowing capacity,investing, 1 41 false Specific risks facing property investors at the moment and 4 tactics to mitigate them Specific risks facing property investors at the moment and 4 tactics to mitigate them Significantly tighter credit, the potential abolition of negative gearing and increase in the capital gains tax rate, falling property prices, new apartment supply… these are some of the head winds facing property investors today.

Given these challenges should you give up and not invest in property? I don’t think so. In fact, good investment opportunities tend to reveal themselves during times where there is negative sentiment and/or uncertainly.

I would like to share with you four tactics that you can employ to mitigate many of the above risks and ultimately enjoy quality long-term returns.

Tactic 1: Invest with owner-occupiers

It is prudent to invest in a location and type of property that suits owner-occupiers equally as well (if not better) than investors. By doing so you increase your pool of prospective purchasers which will help drive property price appreciation. Also, if future changes in tax legislation negatively impact investor demand, the owner-occupier market will still underpin demand for your investment property.

The chart below from CoreLogic (from 2016) sets out the percentage of units and houses owned by investors. Most inner-city high-rise residential towers are often marketed to investors and due to the sheer quantity of these apartment towers, they are probably responsible for skewing the percentages somewhat. However, this sector is a good example of one that you must avoid like the plague – for lots of reasons including that fact that this it is dominated by investors.

Chart: https://www.prosolution.com.au/wp-content/uploads/2018/09/Corelogic-units-v-houses.png

Tactic 2: Invest before 2020

The Shorten government has stated that its ban on negative gearing and higher capital gains tax rate will only apply to properties that are purchased after a yet to be determined date. That is, these new rules will not apply retrospectively to property you already own. Assuming the election occurs in May 2019, I expect that it will take at least one year to draft and pass legislation. As such, perhaps the earliest practical start date for these new tax rules would be 1 July 2020. Therefore, if you purchase an investment property before this date you will still enjoy the current negative gearing benefits and 50% capital gains tax discount.

Tactic 3: Level up on quality

As discussed in my recent article in The Australian newspaper, if the ALP’s tax policies are implemented as proposed, they will reduce the after-tax long-term return on property by 26% from 12.6% p.a. to 9.3% p.a.

The best way to mitigate the negative impact of higher taxes is to generate higher returns. And you cannot expect above-average returns from below average quality assets. Therefore, you absolutely must invest in the highest quality assets that you can afford.

In my book, Investopoly, I talk about how notionally there are sub-grades with the class of investment-grade properties and these will have an impact on the potential investment returns that you can enjoy. I have provided and excerpt below (click to enlarge).

Book: https://www.prosolution.com.au/wp-content/uploads/2018/09/investopoly-grades.png

Tactic 4: future-proof your loan structur

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Significantly tighter credit, the potential abolition of negative gearing and increase in the capital gains tax rate, falling property prices, new apartment supply… these are some of the head winds facing property investors today.

Given these challenges should you give up and not invest in property? I don’t think so. In fact, good investment opportunities tend to reveal themselves during times where there is negative sentiment and/or uncertainly.

I would like to share with you four tactics that you can employ to mitigate many of the above risks and ultimately enjoy quality long-term returns.

Tactic 1: Invest with owner-occupiers

It is prudent to invest in a location and type of property that suits owner-occupiers equally as well (if not better) than investors. By doing so you increase your pool of prospective purchasers which will help drive property price appreciation. Also, if future changes in tax legislation negatively impact investor demand, the owner-occupier market will still underpin demand for your investment property.

The chart below from CoreLogic (from 2016) sets out the percentage of units and houses owned by investors. Most inner-city high-rise residential towers are often marketed to investors and due to the sheer quantity of these apartment towers, they are probably responsible for skewing the percentages somewhat. However, this sector is a good example of one that you must avoid like the plague – for lots of reasons including that fact that this it is dominated by investors.

Chart: https://www.prosolution.com.au/wp-content/uploads/2018/09/Corelogic-units-v-houses.png

Tactic 2: Invest before 2020

The Shorten government has stated that its ban on negative gearing and higher capital gains tax rate will only apply to properties that are purchased after a yet to be determined date. That is, these new rules will not apply retrospectively to property you already own. Assuming the election occurs in May 2019, I expect that it will take at least one year to draft and pass legislation. As such, perhaps the earliest practical start date for these new tax rules would be 1 July 2020. Therefore, if you purchase an investment property before this date you will still enjoy the current negative gearing benefits and 50% capital gains tax discount.

Tactic 3: Level up on quality

As discussed in my recent article in The Australian newspaper, if the ALP’s tax policies are implemented as proposed, they will reduce the after-tax long-term return on property by 26% from 12.6% p.a. to 9.3% p.a.

The best way to mitigate the negative impact of higher taxes is to generate higher returns. And you cannot expect above-average returns from below average quality assets. Therefore, you absolutely must invest in the highest quality assets that you can afford.

In my book, Investopoly, I talk about how notionally there are sub-grades with the class of investment-grade properties and these will have an impact on the potential investment returns that you can enjoy. I have provided and excerpt below (click to enlarge).

Book: https://www.prosolution.com.au/wp-content/uploads/2018/09/investopoly-grades.png

Tactic 4: future-proof your loan structur

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 5f08e5cf-da5f-4b3f-805e-a0ac990c38a1 Thu, 20 Sep 2018 13:36:00 +1000 983 negative gearing,investopoly,wemyss,property investing,building wealth, 1 40 false Stories about how tax and financial advice are so interrelated Stories about how tax and financial advice are so interrelated According to the ATO, over 70% of people engage the services of a tax agent/accountant. However, according to Blackrock, only 15% of Australians have a relationship with a financial advisor.

I believe that many people would benefit from having both. In fact, to crystallise the most value it is imperative that they have a close working relationship. To make my point, I would like to share some real-life stories about how integrated financial advice and tax advice can be and the value created when the approach is seamless.
I believe that lots of people are missing a lot of financial opportunities simply because they don’t have the right advisors. This is such an easy problem to solve. The key point of this blog is that tax and financial planning are so heavily interrelated and if not looked after properly, many opportunities could be missed.

Real-life stories

I could list all the pros and cons of having an advisory team that can provide both financial and tax advice, but I think that is both boring and relatively unconvincing. Instead, I have shared some stories below about some clients we have worked with recently. Whilst their financial circumstances are all different, I think they do demonstrate how interlinked tax and financial advice can be.

Use of tax losses

I was working on a plan for a new client. He has made some investment in the past that didn’t work out how he had hoped, and as a result had a lot of carried forward tax losses in a unique type of trust (hybrid discretionary trust and not a type we would typically recommend using). Part of the client’s financial plan included investing in shares and I wanted to investigate whether we could somehow utilise these carried forward tax losses.

The manager of our tax business was able to quickly review the trust deed, arrange a lawyer to draft documents to change the structure of the trust and confirm we can use the losses. This helped me finalise the plan (share investments will be owned by the trust) and has resulted in a great saving for the client and far less tax compliance risk for the client.

Start super pension to save tax

Whilst preparing SMSF financial statements for some clients, our accountant noticed that one of the members just had a birthday and as such reached her preservation age. He came and spoke to me and asked if we should therefore convert her account into pension phase as it then attracts a zero tax-rate. Of course, I agreed. A close working relationship, and our strong focus on finding ways to add value, have resulted in a perfect outcome for this client.

Structure of investments

This client was self-employed and had a company with a reasonable amount of retained profits in it. If we paid the profit out of the company (via declaring a dividend), the client would have paid more tax. Whilst formulating their investment strategy, our accountant and I considered how best to utilise these “trapped” profits. Considering we were going to recommend the client invest in a property, we advised the client to purchase that property as tenants-in-common such that the company owned 20% of the property and the clients owned the rest (in personal names). This allowed the clients to put that money to good use without crystallising additional tax liabilities (and it helped them avoid messy Div. 7A loan compliance issues).

Structure of super contributions to ensure you get a tax deduction

If you are self-employed, making super contributions can become messy and if you get it wrong, you might miss out on a tax deduction. Often, from a financial planning

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> According to the ATO, over 70% of people engage the services of a tax agent/accountant. However, according to Blackrock, only 15% of Australians have a relationship with a financial advisor.

I believe that many people would benefit from having both. In fact, to crystallise the most value it is imperative that they have a close working relationship. To make my point, I would like to share some real-life stories about how integrated financial advice and tax advice can be and the value created when the approach is seamless.
I believe that lots of people are missing a lot of financial opportunities simply because they don’t have the right advisors. This is such an easy problem to solve. The key point of this blog is that tax and financial planning are so heavily interrelated and if not looked after properly, many opportunities could be missed.

Real-life stories

I could list all the pros and cons of having an advisory team that can provide both financial and tax advice, but I think that is both boring and relatively unconvincing. Instead, I have shared some stories below about some clients we have worked with recently. Whilst their financial circumstances are all different, I think they do demonstrate how interlinked tax and financial advice can be.

Use of tax losses

I was working on a plan for a new client. He has made some investment in the past that didn’t work out how he had hoped, and as a result had a lot of carried forward tax losses in a unique type of trust (hybrid discretionary trust and not a type we would typically recommend using). Part of the client’s financial plan included investing in shares and I wanted to investigate whether we could somehow utilise these carried forward tax losses.

The manager of our tax business was able to quickly review the trust deed, arrange a lawyer to draft documents to change the structure of the trust and confirm we can use the losses. This helped me finalise the plan (share investments will be owned by the trust) and has resulted in a great saving for the client and far less tax compliance risk for the client.

Start super pension to save tax

Whilst preparing SMSF financial statements for some clients, our accountant noticed that one of the members just had a birthday and as such reached her preservation age. He came and spoke to me and asked if we should therefore convert her account into pension phase as it then attracts a zero tax-rate. Of course, I agreed. A close working relationship, and our strong focus on finding ways to add value, have resulted in a perfect outcome for this client.

Structure of investments

This client was self-employed and had a company with a reasonable amount of retained profits in it. If we paid the profit out of the company (via declaring a dividend), the client would have paid more tax. Whilst formulating their investment strategy, our accountant and I considered how best to utilise these “trapped” profits. Considering we were going to recommend the client invest in a property, we advised the client to purchase that property as tenants-in-common such that the company owned 20% of the property and the clients owned the rest (in personal names). This allowed the clients to put that money to good use without crystallising additional tax liabilities (and it helped them avoid messy Div. 7A loan compliance issues).

Structure of super contributions to ensure you get a tax deduction

If you are self-employed, making super contributions can become messy and if you get it wrong, you might miss out on a tax deduction. Often, from a financial planning

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss bff99234-4e92-478f-87eb-cea2f7e47d09 Thu, 13 Sep 2018 10:42:00 +1000 972 investopoly,wemyss,tax and financial advice,save tax,build wealth, 1 39 false How to not get ripped off. Questions to ask before you pay for a financial plan How to not get ripped off. Questions to ask before you pay for a financial plan Over the past few weeks I have seen a couple of financial plans produced by firms that have experience in providing advice on investing in residential property (i.e. not the traditional managed fund/shares type advisors).

Unfortunately, the quality of the advice was very poor and not worth the fees paid in my opinion. It upsets me to see people pay several thousands of dollars for financial advice and receive virtually nil value. Therefore, I wanted to write this blog to tell people what questions to ask before paying for any financial advice.
Before I get to the questions, there are usually two failings with poor quality financial advice:

Potential problem # 1: Limited in scope

In most situations, limited financial advice is risky. Advice can be limited to a specific asset class (e.g. only consider shares or property but not both) or be limited to a specific investment such as superannuation.

A useful analogy is going to the doctors but telling your GP that they can only examine the left side of your body. No doctor could ever be confident with their diagnosis as they wouldn’t know what they may have found if they could have examined your whole body. That’s why when it comes to quality financial advice, you really need to consider if limited advice will be worth paying for. Often, it is what you don’t know that can hurt you the most.

Potential problem # 2: Just a guise to sell you a product

Continuing with my medical analogy above, would you feel comfortable going to a doctor that could only prescribe one type of medication?

If a financial advisor can only recommend one type of investment (be it shares or property or something else), then there should be no surprises when they recommend that you should invest in that asset too. As Warren Buffett says, “you never ask your barber if you need a haircut”.

However, what if you have already decided to invest in a particular asset class? Even then I think it’s prudent to seek advice from a financial planner that can consider all types of investments. The reason being is that if you have missed something (i.e. if you were not aware of an issue that might compromise your investment success). Surely you would want to learn about it before jumping into an investment and costing yourself in lost time or money?

I am very careful to not let my clients self-diagnose. That is, a new client might come to me and say; “we have decided to invest in property”. However, I always ask myself, is property the right asset class for them?

Here are some questions I suggest you ask…

Below I list some questions that you can ask any advisor before agreeing to pay them a fee. The answers to these questions will hopefully help you understand if there are any limitations or hidden agendas behind the advice that you may subsequently receive.

What strategies will you compare or consider?

Any experienced financial planner should be able to highlight two or three strategies that you might be able to utilise. Alternatively, and often just as useful, they might be able to articulate which investment strategies or asset classes are definitely not appropriate for your circumstances (and why).

In this answer you aren’t looking for definitive advice – as the advisor hasn’t had any time to complete any analysis and financial modelling. However, you’re looking for evidence that the advisor has the knowledge and experience to consider various approaches, asset classes and strategies.

Ask for a copy of some advice that they have issued in the past month?

Ask to see a copy of some adv

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Over the past few weeks I have seen a couple of financial plans produced by firms that have experience in providing advice on investing in residential property (i.e. not the traditional managed fund/shares type advisors).

Unfortunately, the quality of the advice was very poor and not worth the fees paid in my opinion. It upsets me to see people pay several thousands of dollars for financial advice and receive virtually nil value. Therefore, I wanted to write this blog to tell people what questions to ask before paying for any financial advice.
Before I get to the questions, there are usually two failings with poor quality financial advice:

Potential problem # 1: Limited in scope

In most situations, limited financial advice is risky. Advice can be limited to a specific asset class (e.g. only consider shares or property but not both) or be limited to a specific investment such as superannuation.

A useful analogy is going to the doctors but telling your GP that they can only examine the left side of your body. No doctor could ever be confident with their diagnosis as they wouldn’t know what they may have found if they could have examined your whole body. That’s why when it comes to quality financial advice, you really need to consider if limited advice will be worth paying for. Often, it is what you don’t know that can hurt you the most.

Potential problem # 2: Just a guise to sell you a product

Continuing with my medical analogy above, would you feel comfortable going to a doctor that could only prescribe one type of medication?

If a financial advisor can only recommend one type of investment (be it shares or property or something else), then there should be no surprises when they recommend that you should invest in that asset too. As Warren Buffett says, “you never ask your barber if you need a haircut”.

However, what if you have already decided to invest in a particular asset class? Even then I think it’s prudent to seek advice from a financial planner that can consider all types of investments. The reason being is that if you have missed something (i.e. if you were not aware of an issue that might compromise your investment success). Surely you would want to learn about it before jumping into an investment and costing yourself in lost time or money?

I am very careful to not let my clients self-diagnose. That is, a new client might come to me and say; “we have decided to invest in property”. However, I always ask myself, is property the right asset class for them?

Here are some questions I suggest you ask…

Below I list some questions that you can ask any advisor before agreeing to pay them a fee. The answers to these questions will hopefully help you understand if there are any limitations or hidden agendas behind the advice that you may subsequently receive.

What strategies will you compare or consider?

Any experienced financial planner should be able to highlight two or three strategies that you might be able to utilise. Alternatively, and often just as useful, they might be able to articulate which investment strategies or asset classes are definitely not appropriate for your circumstances (and why).

In this answer you aren’t looking for definitive advice – as the advisor hasn’t had any time to complete any analysis and financial modelling. However, you’re looking for evidence that the advisor has the knowledge and experience to consider various approaches, asset classes and strategies.

Ask for a copy of some advice that they have issued in the past month?

Ask to see a copy of some adv

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 32c41593-201f-4c48-88fe-f6d615758007 Thu, 06 Sep 2018 10:48:00 +1000 1121 investopoly,wemyss,financial advice,financial plan,property investing,shares 1 38 false Do Bill Shorten's policies spell the end for property investors? Do Bill Shorten's policies spell the end for property investors? All the clowning around in Canberra last week is likely to have increased Shorten’s chances of winning the next election. Given the ALP’s proposed changes to negative gearing and capital gains tax, will these policies spell the end for property investor?

Why the change?

According to the ATO[1], approximately 2 million Australians invest in property and 61% of them claim negative gearing benefits. Negative gearing occurs when you borrow to invest in a property and the income from that property isn’t enough to cover the expenses and interest related to that property investment. That loss helps reduce your total taxable income resulting in a lower income tax liability.

According to the ALP, higher income earners benefit the most from negative gearing. The ALP report that The National Centre for Social and Economic Modelling estimate that the top 20% of income earners enjoy around half of the negative gearing benefits.

What is the ALP proposing?

Labor is proposing to scrap negative gearing on any investments in established property that are made after a yet-to-be-determined date. Existing property investments will be grandfathered. Negative gearing on new-build properties will still be permitted. If you do invest in established property after the yet-to-be-determined date, you will be able to carry forward the income losses and offset them against future property income or capital gain.

The ALP is also proposing to increase the rate of Capital Gains Tax (CGT). Currently, if you own an investment for more than 12 months and make a capital gain on sale, you only pay tax (at marginal rates) on 50% of the net gain. The ALP is proposing to reduce the discount such that the CGT liability will be on 75% of the net capital gain. Again, existing investments will be grandfathered.

What is the impact on the after-tax return?

The impact of these taxation changes on the internal rate of return will be material. Internal rate of return is an estimate of the profitability of a potential investment. The internal rate of return under the current tax laws on a $750,000 investment in property is 12.6% p.a.[2] Adjusting for the proposed ALP changes reduces the internal rate of return to 9.3% p.a. That is, the proposed tax changes wipe out 26% of the after-tax investment return! The reason is that the carrying cost is higher (because there’s no negative gearing benefit) and the investor pays a higher rate of CGT when they sell.

How will these changes impact property markets?

You don’t have to be a Rhodes scholar to work out that demand for property investment is almost certain to fall materially if these changes are implemented.
The chart below compares the volume of owner-occupier and investment dwelling finance commitments with the median house price (average of Melbourne and Sydney) since 2000. It demonstrates that housing prices are heavily impacted by both investment and owner-occupier housing finance commitments.

If the demand for investment housing finance was to fall it is likely that it would have a negative impact on property price growth.
Property prices in locations where the majority of dwellings are owner-occupied will be somewhat insulated from the risk of price falls. Conversely, investor-owned dense locations will likely be impacted more severely.

It is likely that some of the additional cost to hold a property investment will be passed onto renters – so its reasonable to expect that rents will rise as a result of these proposed changes.

A property developer and spruikers dream!

The fact that new-build properties will still receive negati

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> All the clowning around in Canberra last week is likely to have increased Shorten’s chances of winning the next election. Given the ALP’s proposed changes to negative gearing and capital gains tax, will these policies spell the end for property investor?

Why the change?

According to the ATO[1], approximately 2 million Australians invest in property and 61% of them claim negative gearing benefits. Negative gearing occurs when you borrow to invest in a property and the income from that property isn’t enough to cover the expenses and interest related to that property investment. That loss helps reduce your total taxable income resulting in a lower income tax liability.

According to the ALP, higher income earners benefit the most from negative gearing. The ALP report that The National Centre for Social and Economic Modelling estimate that the top 20% of income earners enjoy around half of the negative gearing benefits.

What is the ALP proposing?

Labor is proposing to scrap negative gearing on any investments in established property that are made after a yet-to-be-determined date. Existing property investments will be grandfathered. Negative gearing on new-build properties will still be permitted. If you do invest in established property after the yet-to-be-determined date, you will be able to carry forward the income losses and offset them against future property income or capital gain.

The ALP is also proposing to increase the rate of Capital Gains Tax (CGT). Currently, if you own an investment for more than 12 months and make a capital gain on sale, you only pay tax (at marginal rates) on 50% of the net gain. The ALP is proposing to reduce the discount such that the CGT liability will be on 75% of the net capital gain. Again, existing investments will be grandfathered.

What is the impact on the after-tax return?

The impact of these taxation changes on the internal rate of return will be material. Internal rate of return is an estimate of the profitability of a potential investment. The internal rate of return under the current tax laws on a $750,000 investment in property is 12.6% p.a.[2] Adjusting for the proposed ALP changes reduces the internal rate of return to 9.3% p.a. That is, the proposed tax changes wipe out 26% of the after-tax investment return! The reason is that the carrying cost is higher (because there’s no negative gearing benefit) and the investor pays a higher rate of CGT when they sell.

How will these changes impact property markets?

You don’t have to be a Rhodes scholar to work out that demand for property investment is almost certain to fall materially if these changes are implemented.
The chart below compares the volume of owner-occupier and investment dwelling finance commitments with the median house price (average of Melbourne and Sydney) since 2000. It demonstrates that housing prices are heavily impacted by both investment and owner-occupier housing finance commitments.

If the demand for investment housing finance was to fall it is likely that it would have a negative impact on property price growth.
Property prices in locations where the majority of dwellings are owner-occupied will be somewhat insulated from the risk of price falls. Conversely, investor-owned dense locations will likely be impacted more severely.

It is likely that some of the additional cost to hold a property investment will be passed onto renters – so its reasonable to expect that rents will rise as a result of these proposed changes.

A property developer and spruikers dream!

The fact that new-build properties will still receive negati

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 6e4e5de0-d1c7-4a04-84f3-3f02e0db2e28 Thu, 30 Aug 2018 10:16:00 +1000 915 investopoly,alp,negative gearing,capital gains tax,property investing,wemyss,bill shorten, 1 37 false Why you should never contribute your own cash into a property investment Why you should never contribute your own cash into a property investment I typically strongly recommend to property investors to never contribute any cash into an investment property acquisition. I’m not suggesting that you should blindly borrow more and therefore pay more interest. What I am suggesting is that if you have cash to contribute towards an investment that you do so indirectly using an offset account.
Contribute cash into the offset instead

Instead of contributing your cash and only borrowing the difference (i.e. what you need), I suggest that you borrow 100% of the property’s cost and deposit any cash savings in a linked offset account. Let me explain using a simple example.

Peter buys an investment property for $600k and has $275k of cash to contribute towards this investment. The total cost of Peter’s property (including stamps, etc.) is $635k so Peter needs to borrow $360k. However, I would recommend that Peter borrow $635k and then deposit his cash ($275k) in an offset account. This means that he would only pay interest on the net difference (i.e. $360k) but he has crystallised the maximum tax-deductible loan.

Peter should be able to borrow $635k if he has equity in other property – whilst being careful to avoid cross-securitisation.

Here’s why it makes sense

There are a number of benefits associated with borrowing the maximum and depositing cash into the offset – some of which are discussed below:
1. It reduces your risk because it means that you have ready access to a large amount of cash savings in case of emergencies such as a change in personal circumstances, unexpected large property expenses and so on. Peter can withdraw the $275k of cash from the offset without any restrictions. Maintaining access to your cash is critical to ensuring you have a safe financial buffer.

2. Your circumstances might change in the future (employment, illness/accident, etc.) and/or the banks rules might tighten (reduce the amount they will lend you) which might negatively impact your borrowing capacity. I have always recommended that the best time to borrow is when you don’t need it. Therefore, if you have the opportunity to lock in a higher loan now, take it. This maximises your current and future options and costs you nothing.

3. As noted above, it crystallises the maximum tax-deductible loan. You only have one opportunity to set the maximum tax-deductible loan and that is when you first purchase an asset. You will have to live with how you finance the asset initially for the rest of the asset’s ownership period. That is, Peter cannot contribute his $275k of cash and then say one year later, change his mind and increase the loan from $360k to $635k to pull his cash out again – because the purpose for what he uses the additional funds will determine whether the loan is tax deductible or not.

Let me share a story about two clients. When we met these client’s, the husband was retired, and his wife was still working. They wanted to buy an investment property and had a large deposit – about 80% of the property’s value. We counselled them to borrow the max and put the cash in the offset (as described above). They couldn’t see any benefit as they thought since they were in (or near) retirement, that they probably won’t need the money (i.e. no changed or planned changes in circumstances). Despite this, they thankfully followed our advice. A few years later they unexpectedly decided to relocate i.e. move homes. This relocation required them to spend more. They easily facilitated this by drawing cash from the offset account. This meant that they didn’t need to borrow mor

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> I typically strongly recommend to property investors to never contribute any cash into an investment property acquisition. I’m not suggesting that you should blindly borrow more and therefore pay more interest. What I am suggesting is that if you have cash to contribute towards an investment that you do so indirectly using an offset account.
Contribute cash into the offset instead

Instead of contributing your cash and only borrowing the difference (i.e. what you need), I suggest that you borrow 100% of the property’s cost and deposit any cash savings in a linked offset account. Let me explain using a simple example.

Peter buys an investment property for $600k and has $275k of cash to contribute towards this investment. The total cost of Peter’s property (including stamps, etc.) is $635k so Peter needs to borrow $360k. However, I would recommend that Peter borrow $635k and then deposit his cash ($275k) in an offset account. This means that he would only pay interest on the net difference (i.e. $360k) but he has crystallised the maximum tax-deductible loan.

Peter should be able to borrow $635k if he has equity in other property – whilst being careful to avoid cross-securitisation.

Here’s why it makes sense

There are a number of benefits associated with borrowing the maximum and depositing cash into the offset – some of which are discussed below:
1. It reduces your risk because it means that you have ready access to a large amount of cash savings in case of emergencies such as a change in personal circumstances, unexpected large property expenses and so on. Peter can withdraw the $275k of cash from the offset without any restrictions. Maintaining access to your cash is critical to ensuring you have a safe financial buffer.

2. Your circumstances might change in the future (employment, illness/accident, etc.) and/or the banks rules might tighten (reduce the amount they will lend you) which might negatively impact your borrowing capacity. I have always recommended that the best time to borrow is when you don’t need it. Therefore, if you have the opportunity to lock in a higher loan now, take it. This maximises your current and future options and costs you nothing.

3. As noted above, it crystallises the maximum tax-deductible loan. You only have one opportunity to set the maximum tax-deductible loan and that is when you first purchase an asset. You will have to live with how you finance the asset initially for the rest of the asset’s ownership period. That is, Peter cannot contribute his $275k of cash and then say one year later, change his mind and increase the loan from $360k to $635k to pull his cash out again – because the purpose for what he uses the additional funds will determine whether the loan is tax deductible or not.

Let me share a story about two clients. When we met these client’s, the husband was retired, and his wife was still working. They wanted to buy an investment property and had a large deposit – about 80% of the property’s value. We counselled them to borrow the max and put the cash in the offset (as described above). They couldn’t see any benefit as they thought since they were in (or near) retirement, that they probably won’t need the money (i.e. no changed or planned changes in circumstances). Despite this, they thankfully followed our advice. A few years later they unexpectedly decided to relocate i.e. move homes. This relocation required them to spend more. They easily facilitated this by drawing cash from the offset account. This meant that they didn’t need to borrow mor

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 397e6939-bec5-4ef2-ab16-49323f91bb36 Thu, 23 Aug 2018 17:22:00 +1000 546 investing,investopoly,wemyss,property investing,borrowing 1 36 false ATO crackdown on work related deductions and business expenditure ATO crackdown on work related deductions and business expenditure Whilst historically ATO audits were targeted at big business and the wealthy, this has changed. Now more than ever, individuals, business and self-managed superannuation funds are at risk of being selected for an audit, investigation or review. The Tax Commissioner, Chris Jordan has confirmed the ATO has been instructed to undertake random audits targeting over claiming of business expenditure and work-related deductions.

The ATO is using real-time data to compare taxpayers with others in similar occupations and income brackets, to identify higher-than-expected claims related to expenses including vehicle, travel, internet and mobile phone, and self-education.

Innocent until proven guilty tends to be the ATO’s presumption. So, even if your books are squeaky clean, this won’t stop a random ATO enquiry! These audits don’t only involve emotional stress but can disrupt your business or work and can cost a significant amount for extra accountancy, bookkeeping and if necessary, legal fees.

The ATO’s Golden Rules

The ATO has provided three rules in determining whether the deduction your claiming is eligible:
1. The taxpayer must have incurred the expense themselves – and not have been reimbursed.
2. The expense must be incurred in gaining or producing assessable income.
3. The claim must comply with the substantiation rules – i.e. all records must be kept.

Remember, the onus of proof is on the taxpayer. It is important to know what you’re eligible to claim before lodging your tax return and to make sure you don’t claim more than what you’re entitled to. For example, it’s a myth that you can claim the standard $150 laundry expense for having a work uniform, or the $300 work related expense without having incurred the expense or the 5,000-kilometer motor vehicle claim.

While the ATO will certainly be looking at unusually high claims for work-related expenses of all types, car expenses and clothing and laundry expenses are the two categories which will receive the most scrutiny.

Having a uniform doesn’t automatically mean you’re eligible for a deduction

Expenditure on conventional clothing is generally not deductible. For clothing to be deductible, there must be sufficient nexus to the income earning activity. This means the clothing must distinctively identify the wearer as a person associated with a particular profession, trade, vocation, occupation or calling.
There is no standard laundry deduction of $150

Although there is no substantiation exception for deductions for washing, drying and ironing if the amount doesn’t exceed $150, this does not automatically provide taxpayers with a standard deduction of $150. The taxpayer must still be able to verify that they actually incurred the expenditure.

No standard deductions for 5,000 kilometres

Although there’s substantiation exception for claims made under the cents per kilometre method — capped at 5,000 kilometres, this does not represent a ‘standard deduction’. The taxpayer is entitled to a deduction only for kilometres actually travelled in the course of producing assessable income. Travel between home and work is generally not deductible.

The substantiation exception means that there is no requirement to keep detailed records in a logbook or similar. However, you must still be able to verify that you undertook the purported trips for a work purpose, and that the kilometres claimed reflect the distances actually travelled by car during those trips.

Don’t be aggressive to save a couple $$ in tax

The mindset that everyone cheats a little, is one that the ATO won’t tolera

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Whilst historically ATO audits were targeted at big business and the wealthy, this has changed. Now more than ever, individuals, business and self-managed superannuation funds are at risk of being selected for an audit, investigation or review. The Tax Commissioner, Chris Jordan has confirmed the ATO has been instructed to undertake random audits targeting over claiming of business expenditure and work-related deductions.

The ATO is using real-time data to compare taxpayers with others in similar occupations and income brackets, to identify higher-than-expected claims related to expenses including vehicle, travel, internet and mobile phone, and self-education.

Innocent until proven guilty tends to be the ATO’s presumption. So, even if your books are squeaky clean, this won’t stop a random ATO enquiry! These audits don’t only involve emotional stress but can disrupt your business or work and can cost a significant amount for extra accountancy, bookkeeping and if necessary, legal fees.

The ATO’s Golden Rules

The ATO has provided three rules in determining whether the deduction your claiming is eligible:
1. The taxpayer must have incurred the expense themselves – and not have been reimbursed.
2. The expense must be incurred in gaining or producing assessable income.
3. The claim must comply with the substantiation rules – i.e. all records must be kept.

Remember, the onus of proof is on the taxpayer. It is important to know what you’re eligible to claim before lodging your tax return and to make sure you don’t claim more than what you’re entitled to. For example, it’s a myth that you can claim the standard $150 laundry expense for having a work uniform, or the $300 work related expense without having incurred the expense or the 5,000-kilometer motor vehicle claim.

While the ATO will certainly be looking at unusually high claims for work-related expenses of all types, car expenses and clothing and laundry expenses are the two categories which will receive the most scrutiny.

Having a uniform doesn’t automatically mean you’re eligible for a deduction

Expenditure on conventional clothing is generally not deductible. For clothing to be deductible, there must be sufficient nexus to the income earning activity. This means the clothing must distinctively identify the wearer as a person associated with a particular profession, trade, vocation, occupation or calling.
There is no standard laundry deduction of $150

Although there is no substantiation exception for deductions for washing, drying and ironing if the amount doesn’t exceed $150, this does not automatically provide taxpayers with a standard deduction of $150. The taxpayer must still be able to verify that they actually incurred the expenditure.

No standard deductions for 5,000 kilometres

Although there’s substantiation exception for claims made under the cents per kilometre method — capped at 5,000 kilometres, this does not represent a ‘standard deduction’. The taxpayer is entitled to a deduction only for kilometres actually travelled in the course of producing assessable income. Travel between home and work is generally not deductible.

The substantiation exception means that there is no requirement to keep detailed records in a logbook or similar. However, you must still be able to verify that you undertook the purported trips for a work purpose, and that the kilometres claimed reflect the distances actually travelled by car during those trips.

Don’t be aggressive to save a couple $$ in tax

The mindset that everyone cheats a little, is one that the ATO won’t tolera

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss c9be320f-b7c8-492d-bf17-b27caa76bb7a Tue, 14 Aug 2018 11:32:00 +1000 551 investopoly,ato,tax,tax deductions,wemyss 1 35 false What makes a better investment? A house or apartment? What makes a better investment? A house or apartment? Last week, I highlighted some evidence that indicates investment-grade apartments in Melbourne are perhaps intrinsically undervalued. The topic of this week’s blog is all about whether a house or apartment makes a better investment, specially:

1. If your investment budget is $1.3 million or more, should you invest in one house or two apartments?
2. If your investment budget is in the range of $700k and 800k, should you invest in an investment-grade apartment in a blue-chip suburb or a house further away from the CDB (or in a regional town)?

Of course, my commentary and suggestions below are general in nature and may not apply to your financial situation. Therefore, it is important to obtain independent financial advice. Here are a few considerations that you must take into account:

Apartments are susceptible to the impact of future development

The number of houses in a blue-chip suburb are somewhat fixed. That is, typically, there is no more than one house per block (excluding the odd townhouse development which is rarer in high land value, blue-chip locations). However, the number of apartments in a geographical location can change significantly over several years. All you need is one or two large developments and that can dramatically impact the supply of apartments. Whilst new-build apartments are vastly inferior assets from an investment perspective, their existence can retard capital growth.

The advantage of investing in a house is that supply is relatively fixed. This ensures that the imbalance between supply and demand (in an investment-grade location) remains in the investors favour. That is, if supply is fixed and demand is increasing, you will typically benefit from price appreciation.
If you have multiple assets, you have more flexibility

The advantage of investing in two apartments as opposed to one house is that you have greater flexibility in the future, particularly as you get closer to retirement. For example, if you invest in two apartments at age 45 (which might be 15 years prior to your planned retirement) then you will be able to sell one apartment after you have retired and use the cash proceeds to repay the debt on the other apartment. This may result in you retaining one apartment with no (or very little) debt thereby generating a good income stream to supplement your super.

Spread your eggs across many baskets

Another advantage of owning two apartments as opposed to one house is that you can diversify geographically. Different geographical locations and micro-markets will perform differently at different times. Tying a lot of your wealth up in one asset creates a lot of concentration risk which might not be a prudent thing to do.
One of the greatest advantages of direct property is control

One downside to investing in an apartment is that you have less control over the asset. That is, common areas are managed by an Owners Corporation. The Owners Corporation makes important decisions by vote at an annual general meeting. Some motions require a unanimous resolution meaning all owners must agree – which can be difficult to obtain. Some examples of challenges that investors have endured include not being able to maximise the value/use of the land (surplus car parking could have been sold but agreement could not be reached), updating the title type to improve the property’s marketability and value but agreement could not be reached, etc.
The best way to mi

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Last week, I highlighted some evidence that indicates investment-grade apartments in Melbourne are perhaps intrinsically undervalued. The topic of this week’s blog is all about whether a house or apartment makes a better investment, specially:

1. If your investment budget is $1.3 million or more, should you invest in one house or two apartments?
2. If your investment budget is in the range of $700k and 800k, should you invest in an investment-grade apartment in a blue-chip suburb or a house further away from the CDB (or in a regional town)?

Of course, my commentary and suggestions below are general in nature and may not apply to your financial situation. Therefore, it is important to obtain independent financial advice. Here are a few considerations that you must take into account:

Apartments are susceptible to the impact of future development

The number of houses in a blue-chip suburb are somewhat fixed. That is, typically, there is no more than one house per block (excluding the odd townhouse development which is rarer in high land value, blue-chip locations). However, the number of apartments in a geographical location can change significantly over several years. All you need is one or two large developments and that can dramatically impact the supply of apartments. Whilst new-build apartments are vastly inferior assets from an investment perspective, their existence can retard capital growth.

The advantage of investing in a house is that supply is relatively fixed. This ensures that the imbalance between supply and demand (in an investment-grade location) remains in the investors favour. That is, if supply is fixed and demand is increasing, you will typically benefit from price appreciation.
If you have multiple assets, you have more flexibility

The advantage of investing in two apartments as opposed to one house is that you have greater flexibility in the future, particularly as you get closer to retirement. For example, if you invest in two apartments at age 45 (which might be 15 years prior to your planned retirement) then you will be able to sell one apartment after you have retired and use the cash proceeds to repay the debt on the other apartment. This may result in you retaining one apartment with no (or very little) debt thereby generating a good income stream to supplement your super.

Spread your eggs across many baskets

Another advantage of owning two apartments as opposed to one house is that you can diversify geographically. Different geographical locations and micro-markets will perform differently at different times. Tying a lot of your wealth up in one asset creates a lot of concentration risk which might not be a prudent thing to do.
One of the greatest advantages of direct property is control

One downside to investing in an apartment is that you have less control over the asset. That is, common areas are managed by an Owners Corporation. The Owners Corporation makes important decisions by vote at an annual general meeting. Some motions require a unanimous resolution meaning all owners must agree – which can be difficult to obtain. Some examples of challenges that investors have endured include not being able to maximise the value/use of the land (surplus car parking could have been sold but agreement could not be reached), updating the title type to improve the property’s marketability and value but agreement could not be reached, etc.
The best way to mi

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss e95ff155-92be-4bda-a602-34ffceef30c4 Thu, 09 Aug 2018 12:03:00 +1000 1042 investopoly,wemyss,property investment,investment-grade,apartments 1 34 false Evidence is mounting that investment-grade apartments are positioned to appreciate Evidence is mounting that investment-grade apartments are positioned to appreciate I wrote this blog in February suggesting that I thought investment-grade apartments were intrinsically under-valued. Well, according to Jarrod McCabe, director of Wakelin Property Advisory, “the investment-grade apartment market in Melbourne is showing signs of growth this year”.

My view that apartments are intrinsically under-valued has become even stronger over the last 6 months and I would like to share a few reasons why.

House prices have appreciated significantly over the past 5-10 years and maybe that’s changing

As this chart suggests, house price growth has become significantly stronger than apartment growth over the last nine years. The median house price appreciated by 6.8% p.a. on average over that period compared to 4.1% p.a. for apartments.

Since citing this chart in February, anecdotally, it would appear that demand for investment-grade houses in Melbourne’s blue-chip suburbs peaked towards the end of 2017. Buyer demand in this sector of the market has been less buoyant in 2018. This suggests that perhaps this growth cycle (all markets move in cycles) has ended. Maybe the trend will turn around and apartments will generate stronger growth than houses?

Tightening credit means people can borrow less

The credit environment is very tight (as I have noted many times previously) and that has put downward pressure on people’s borrowing capacities. I estimate that most people’s borrowing capacities has reduced by between 20% and 40% (sometimes more) over the past few years. This means more people will be priced out of the housing market (in prime locations) and be forced to consider invest in a one or two-bedroom apartment instead.

Supply of new-build apartments

The supply of new-build apartments will have an impact on overall median data and supply-demand fundamentals. However, the geographical concentration of new developments is what you must consider. Capital city data is less meaningful.

For example, in Melbourne, there has been a lot of new apartment development in Prahran and South Yarra but that seems to be slowing down now. However, suburbs such as Richmond and East Melbourne currently have a lot of large construction projects in progress and this will likely have a negative price impact on established, investment-grade apartment prices in those locations in the shorter-term.

Property price growth is rarely linear

This week, I was reviewing the performance of a property that a client has invested in recently. The property is located in Richardson Street, Carlton North. The chart below tracks its sales transactions from 1975 through to 2018, some 43 years of data.

You will notice that over this time there have been three growth cycles. The first cycle lasted 18 years and generated 12.9% p.a. of growth. After that period the property didn’t do very much for 11 years. And then the most recent growth cycle has been for 14 years generating 12.7% p.a. This property may continue to appreciate for a few more years to come – maybe this cycle hasn’t ended – no one knows.

Importantly, the overall appreciation of this property over the last 43 years averages out to be 9.6% p.a. – which is what you would expect from a quality investment-grade property. In the long run, I think it is reasonable to assume that this property will continue to generate similar returns over the next 43 years.

However, my point is tha

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> I wrote this blog in February suggesting that I thought investment-grade apartments were intrinsically under-valued. Well, according to Jarrod McCabe, director of Wakelin Property Advisory, “the investment-grade apartment market in Melbourne is showing signs of growth this year”.

My view that apartments are intrinsically under-valued has become even stronger over the last 6 months and I would like to share a few reasons why.

House prices have appreciated significantly over the past 5-10 years and maybe that’s changing

As this chart suggests, house price growth has become significantly stronger than apartment growth over the last nine years. The median house price appreciated by 6.8% p.a. on average over that period compared to 4.1% p.a. for apartments.

Since citing this chart in February, anecdotally, it would appear that demand for investment-grade houses in Melbourne’s blue-chip suburbs peaked towards the end of 2017. Buyer demand in this sector of the market has been less buoyant in 2018. This suggests that perhaps this growth cycle (all markets move in cycles) has ended. Maybe the trend will turn around and apartments will generate stronger growth than houses?

Tightening credit means people can borrow less

The credit environment is very tight (as I have noted many times previously) and that has put downward pressure on people’s borrowing capacities. I estimate that most people’s borrowing capacities has reduced by between 20% and 40% (sometimes more) over the past few years. This means more people will be priced out of the housing market (in prime locations) and be forced to consider invest in a one or two-bedroom apartment instead.

Supply of new-build apartments

The supply of new-build apartments will have an impact on overall median data and supply-demand fundamentals. However, the geographical concentration of new developments is what you must consider. Capital city data is less meaningful.

For example, in Melbourne, there has been a lot of new apartment development in Prahran and South Yarra but that seems to be slowing down now. However, suburbs such as Richmond and East Melbourne currently have a lot of large construction projects in progress and this will likely have a negative price impact on established, investment-grade apartment prices in those locations in the shorter-term.

Property price growth is rarely linear

This week, I was reviewing the performance of a property that a client has invested in recently. The property is located in Richardson Street, Carlton North. The chart below tracks its sales transactions from 1975 through to 2018, some 43 years of data.

You will notice that over this time there have been three growth cycles. The first cycle lasted 18 years and generated 12.9% p.a. of growth. After that period the property didn’t do very much for 11 years. And then the most recent growth cycle has been for 14 years generating 12.7% p.a. This property may continue to appreciate for a few more years to come – maybe this cycle hasn’t ended – no one knows.

Importantly, the overall appreciation of this property over the last 43 years averages out to be 9.6% p.a. – which is what you would expect from a quality investment-grade property. In the long run, I think it is reasonable to assume that this property will continue to generate similar returns over the next 43 years.

However, my point is tha

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss a6fa0830-78c2-4cfd-a9ab-ae5befdfa5f3 Thu, 02 Aug 2018 10:38:00 +1000 868 investopoly,wemyss,property investing,investment, 1 33 false New data: Interest rates, super returns and more New data: Interest rates, super returns and more Some interesting information and data has been released this week which I would like to discuss with you.

Variable mortgage rates will probably rise soon

Interest rates that apply to interbank lending have increased significantly since the beginning of the year. These benchmark rates are used to set the banks borrowing costs. This benchmark rate has increased significantly compared to the RBA’s cash rate as depicted in the chart below (from Montgomery). Essentially, this means it costs more for the banks to borrow. Between approximately one quarter and one third of the banks mortgages are funded through facilities that are linked to these short-term indicator rates. Therefore, it has been estimated that the banks cost of funds have increased by circa 0.10% p.a.

Various second tier lenders such as ING, BoQ, IMB, Citibank, Bank SA, and ME Bank have already increased variable rates.

Pressure will be on the Big 4 banks to follow. However, I suspect that they haven’t increased yet because they are worried about the inevitably bad press that it would attract – particularly for the bank to move first. That said, if these higher costs persist then they might have to lift variable interest rates sooner rather than later (probably by around 0.10% p.a.).

Can you afford principal and interest repayments?

There has been a bit of press lately about a possible looming credit risk i.e. interest only loans converting to principal and interest repayments which might put negative pressure on borrowers cash flow.

If you have a loan on interest only repayments that is approaching its expiry date, you have a few options. You should consider whether you are better off with principal and interest repayments – see this blog. If not, speak to us and we can investigate whether you can roll over to a new 5-year interest only term with your existing or a new lender. Do it sooner rather than later to avoid the risk of being caught by any future changes or credit tightening.

The Reserve Bank (RBA) and interest rates
The main thing holding back the RBA from increasing the cash rate is the rather ‘benign’ inflation rate – including the very low wage inflation rate. The inflation (CPI) numbers for the June quarter were released yesterday and, whilst inflation is only just within the RBA’s target band of 2% and 3%, the main driver of the recent increase was petrol prices. Overall, there’s nothing in the CPI numbers that suggests the RBA will increase interest rates this year or possibly next year.

The best performing super funds for the 2018 financial year
Researcher, Chant West this week released its list of top-performing super funds for the 2017/18 financial year.

I have been very pleased with the performance of the low-cost, indexed model portfolio that we use to invest our clients super. It has retuned 11.52% p.a. over the past year after investment fees.

The median returns by industry funds was 10.3% p.a. compared to 9.0% p.a. for retrial funds. This confirms the Productivity Commissions findings that retail super funds (such as AMP, Colonial, BT and MLC) are typically characterised by higher-fees and lower-returns. If your super is invested with a retail fund, then my advice is to find a better super fund (but get advice before you do as you must consider exit fees, timing,

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Some interesting information and data has been released this week which I would like to discuss with you.

Variable mortgage rates will probably rise soon

Interest rates that apply to interbank lending have increased significantly since the beginning of the year. These benchmark rates are used to set the banks borrowing costs. This benchmark rate has increased significantly compared to the RBA’s cash rate as depicted in the chart below (from Montgomery). Essentially, this means it costs more for the banks to borrow. Between approximately one quarter and one third of the banks mortgages are funded through facilities that are linked to these short-term indicator rates. Therefore, it has been estimated that the banks cost of funds have increased by circa 0.10% p.a.

Various second tier lenders such as ING, BoQ, IMB, Citibank, Bank SA, and ME Bank have already increased variable rates.

Pressure will be on the Big 4 banks to follow. However, I suspect that they haven’t increased yet because they are worried about the inevitably bad press that it would attract – particularly for the bank to move first. That said, if these higher costs persist then they might have to lift variable interest rates sooner rather than later (probably by around 0.10% p.a.).

Can you afford principal and interest repayments?

There has been a bit of press lately about a possible looming credit risk i.e. interest only loans converting to principal and interest repayments which might put negative pressure on borrowers cash flow.

If you have a loan on interest only repayments that is approaching its expiry date, you have a few options. You should consider whether you are better off with principal and interest repayments – see this blog. If not, speak to us and we can investigate whether you can roll over to a new 5-year interest only term with your existing or a new lender. Do it sooner rather than later to avoid the risk of being caught by any future changes or credit tightening.

The Reserve Bank (RBA) and interest rates
The main thing holding back the RBA from increasing the cash rate is the rather ‘benign’ inflation rate – including the very low wage inflation rate. The inflation (CPI) numbers for the June quarter were released yesterday and, whilst inflation is only just within the RBA’s target band of 2% and 3%, the main driver of the recent increase was petrol prices. Overall, there’s nothing in the CPI numbers that suggests the RBA will increase interest rates this year or possibly next year.

The best performing super funds for the 2018 financial year
Researcher, Chant West this week released its list of top-performing super funds for the 2017/18 financial year.

I have been very pleased with the performance of the low-cost, indexed model portfolio that we use to invest our clients super. It has retuned 11.52% p.a. over the past year after investment fees.

The median returns by industry funds was 10.3% p.a. compared to 9.0% p.a. for retrial funds. This confirms the Productivity Commissions findings that retail super funds (such as AMP, Colonial, BT and MLC) are typically characterised by higher-fees and lower-returns. If your super is invested with a retail fund, then my advice is to find a better super fund (but get advice before you do as you must consider exit fees, timing,

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss 152f28aa-186c-4a91-b205-9a1eea882303 Thu, 26 Jul 2018 10:00:00 +1000 771 investopoly,wemyss,investing 1 32 false Are you a spender or saver? Are you a spender or saver? Are you a spender or saver? Do you find it hard to stick to a budget? Do you find it difficult to save towards a goal? For some people, saving money comes easy to them. For others, it’s like pulling teeth.

You might need to adopt a different investment strategy depending on your answers to the above questions.

Success requires some income

Surplus cash flow is oxygen for any financial strategy. Without it, no financial strategy can survive. As I have said in the past, it is critical that you contribute a certain amount of your income towards building your financial future every fortnight, month and year. It is virtually impossible to build wealth without surplus cash flow. Therefore, if you are spending as much as you earn, you cannot expect to get ahead financially.

Basic steps

Most people are smart enough to realise that wasting money is stupid. The problem however, is that if you don’t know where your money is going how do you know if you’re wasting it or not? And that is the most common mistake that people make – not knowing where their money is going. Worse still, I find that most people consistently underestimate how much they spend. If you’re underestimating how much you spend, then possibly you’re also underestimating how much money you’re wasting. You cannot manage what you do not measure. Therefore, at an absolute minimum you must sit down every six months to understand exactly where your money is going – even if it’s at a high level. In my new book Investopoly, I have dedicated a full chapter to helping people improve their cash flow management. I provide a screenshot (click to enlarge) of page 34 below which sets out how to review your last three months of expenditure.

If you’re a spender

There are a couple of investment strategies that spenders will find it easier to stick to. The key theme in all of them is to do what Warren Buffett tells us to do which is to “invest first and then spend what’s left over”.

Idea 1: Make additional super contributions

One thing you can do is contact your payroll department and ask them to deduct a certain amount of money from each pay and contribute that into super (as a concessional contribution). This is also a tax effective strategy as any contributions are taxed at 15% instead of your marginal tax rate (for people earning less than $200,000 per annum).
Technically, depending on your age and financial position, it may not be a high priority for you to make additional super contributions. For example, maybe it’s more important for you to repay your home loan. However, if the reality is that you would just spend the money that you could have otherwise contributed into super (and not make extra home loan repayments) then perhaps making additional super contributions is a good thing for you to do i.e. forced savings mechanism.
Consider this case study to demonstrate how effective it can be:

Susie is a 30-year-old earning a salary of $100,000 a year. Therefore, she is already contributing $9,500 per annum into super (i.e. her employer’s contributions). If Susie contributed an extra 3.5% p.a. of her gross salary (i.e. $3,500 p.a. or $67 per week), by age 60, her super balance would be 32% higher ($965,000 versus $1.27 million). That is a big reward for a relatively small sacrifice that will probably go unnoticed i.e. no adverse impact on your standard of living.

Idea 2: Borrow to invest in property

Borrowing to invest is a good forced savings mechanism. I’m not suggesting

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Are you a spender or saver? Do you find it hard to stick to a budget? Do you find it difficult to save towards a goal? For some people, saving money comes easy to them. For others, it’s like pulling teeth.

You might need to adopt a different investment strategy depending on your answers to the above questions.

Success requires some income

Surplus cash flow is oxygen for any financial strategy. Without it, no financial strategy can survive. As I have said in the past, it is critical that you contribute a certain amount of your income towards building your financial future every fortnight, month and year. It is virtually impossible to build wealth without surplus cash flow. Therefore, if you are spending as much as you earn, you cannot expect to get ahead financially.

Basic steps

Most people are smart enough to realise that wasting money is stupid. The problem however, is that if you don’t know where your money is going how do you know if you’re wasting it or not? And that is the most common mistake that people make – not knowing where their money is going. Worse still, I find that most people consistently underestimate how much they spend. If you’re underestimating how much you spend, then possibly you’re also underestimating how much money you’re wasting. You cannot manage what you do not measure. Therefore, at an absolute minimum you must sit down every six months to understand exactly where your money is going – even if it’s at a high level. In my new book Investopoly, I have dedicated a full chapter to helping people improve their cash flow management. I provide a screenshot (click to enlarge) of page 34 below which sets out how to review your last three months of expenditure.

If you’re a spender

There are a couple of investment strategies that spenders will find it easier to stick to. The key theme in all of them is to do what Warren Buffett tells us to do which is to “invest first and then spend what’s left over”.

Idea 1: Make additional super contributions

One thing you can do is contact your payroll department and ask them to deduct a certain amount of money from each pay and contribute that into super (as a concessional contribution). This is also a tax effective strategy as any contributions are taxed at 15% instead of your marginal tax rate (for people earning less than $200,000 per annum).
Technically, depending on your age and financial position, it may not be a high priority for you to make additional super contributions. For example, maybe it’s more important for you to repay your home loan. However, if the reality is that you would just spend the money that you could have otherwise contributed into super (and not make extra home loan repayments) then perhaps making additional super contributions is a good thing for you to do i.e. forced savings mechanism.
Consider this case study to demonstrate how effective it can be:

Susie is a 30-year-old earning a salary of $100,000 a year. Therefore, she is already contributing $9,500 per annum into super (i.e. her employer’s contributions). If Susie contributed an extra 3.5% p.a. of her gross salary (i.e. $3,500 p.a. or $67 per week), by age 60, her super balance would be 32% higher ($965,000 versus $1.27 million). That is a big reward for a relatively small sacrifice that will probably go unnoticed i.e. no adverse impact on your standard of living.

Idea 2: Borrow to invest in property

Borrowing to invest is a good forced savings mechanism. I’m not suggesting

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at questions@investopoly.com.au

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

]]> Stuart Wemyss aa93ede3-cfed-44e3-8e07-a0629487578c Wed, 18 Jul 2018 10:00:00 +1000 718 investopoly,wemyss,cash flow,saving 1 31 false Should you make additional super contributions? Should you make additional super contributions?