July 2, 2021 Wealth Wine & Wisdom

July 2, 2021 Wealth Wine & Wisdom

Eddie Fenton. Happy New Year. Uh happy New Year. It's really what a financial year it's been a we would have thought who would have thought it again. Actually, one of my team members was saying it's her favorite word I don't even know how to pronounce it. What is it? What? What? Say that again. That's uh one of my favorite words is Es. End of financial. Yes. Oh, that's. Oh yeah. Okay. Alright. I get it because the end of financial year sales. now. It makes sense. It makes Okay. Alright. Well, we got a few people jumping on, folks. Welcome everybody. Good to see everyone here and he's just gone. He's there. He's back. Uh Jolly Good. Uh there's Allison as always. Welcome back to those who join us regularly. Good to see you guys. Uh Jason Andy here back in the saddle or in the wagon.

I don't know what they're saying is we're back. We're back together. Uh it's been a few weeks in a row where either Andy's been solo or I've been solo or just hasn't come together but uh happy to be back with you my friend and welcome back to those who are Coming back. Coming to see us. Hang out on a Friday at Wine and Wisdom. while we're getting all warmed up and people are jumping on quick. Do the intros, Andy Fenton, Jason Witten. It says down the bottom in our little name tags. uh and uh we've uh we've been holding a bit of a weekly debrief since the beginning of COVID helping our respective communities in the world of property and the Share market and in banking and equities and shares for over 20 years. Me and well, the real estate for years helping our clients and customers do the best they can and be safe but also be on it when it comes to investing.

So, you know, we've been debriefing for a while and certainly in and around the world of business owners is one of the the niches the worlds we play in as business owners ourselves as property investors ourselves and as equity investors ourselves. We got a little bit of uh a unique understanding of how a few of those things go together. So, we get together every Friday a debrief. Andy. We've got a few people diving in diving in today and uh Laura, good day. How are you? And Bob? Bob's here. Bob's a regular. Good to see you, Bob and Michelle.

Michelle's down in Melbourne. which is uh which is great. but not in lock down, right? It's uh it's a cruel and unusual twist of fate whereby I do believe it's a conspiracy theory. I'd I believe that uh the rest of Australia has just gone look, Melbourne's come out of lockdown so let all go into lockdown So, they can't travel anywhere because we were, we were thinking, oh, school holidays, we're off. We're going to go up to Queensland. We're going to go to and who would have thought, you know, because when it started happening, I was thinking, you know what? It's always in Northern territory. There's all and then Northern territory went into lockdown. I'm like, you can't be serious. It's unbelievable. Usually, the wall was originally built around Victoria to uh stop us from leaving and spreading the virus and then it was uh to keep everybody out. It's uh it's Unbelievable. So, we're we're still here. Not traveling. not in lockdown but not able to go anywhere.

There you go, Andy. Well, um a few people are jumping on now. So, good day Karen. Uh good day, Chris. How are you mate? And uh Dean's popping on by Andy, there's two of you right now in your screen and um which is wonderful. Um it's uh well you know, you can you can be pretty lucky, can't you? Well, I think uh here we go. We we could uh we could do the Dueling Dueling twos. You could you could put yours back and then we can have double Uh There you go. Oh well, Allison said she went to today. Um sorry about that Allison. Um there's not much out there, that's for sure. You'll just see, you'll just see all of the cadets doing their military stuff out there.

Absolutely. But folks, uh listen, uh as we do, we got a chance to sort of uh catch up with you guys and have a bit of a chat, have a bit of a yarn about uh what's going on and uh in our travels we we would try and make a little bit of sense of what we get up to on these nights and um we sort of get around to it in a few ways. First things we do is sort of debrief Andy, what's in the news. Um that way I gotta get my yeah. what's in the news? So Alright. Yeah. what's in the news So we'll have a little look at that uh in a minute folks and so to say what's in the news while we're doing that, we'd love you guys to sort of think of any questions that you might have.

Uh certainly we've had a few questions over the weeks and we've stored a few of those and he's going to talk about end of financial year and starting the new financial year. Also, things to remember to get off to the right start and maybe finish off um and uh also we've had a question about life insurance and the appropriate cover when borrowing. So, we're going to sort of jump on to that a bit later on as well and make sure you're here for that uh team because uh because it's uh it's an important one and then uh we might do some stuff like things you should know a little bit later on.

Just depends on how we get rolling but so that's the the gist of the show tonight folks. So Um what we uh what we do is try and give it a bit of structure. So, Andy and I don't waffle on um without aim because we do like to catch up but uh certainly what's in the news is always interesting Andy and uh I thought I might sort of jump in on this one and kick it off at my on my side and then uh you can uh have a little little nudge at uh you know what's going on for uh your neck of the woods but uh let me have AA bit of a look at in the news right now here.

Um in and around, you know, the property market. um and it's not necessarily uh hot off the press sort of stuff right now to be honest but um the reality is for many of us um finance is uh is um uh certainly for property investors, finances, something we gotta keep an eye on and uh there's something interesting going on with the amount of volume coming through. This is a chart. It's uh it's a little bit older but right now, we're seeing um huge amounts and and massive amounts of owner occupies back in the marketplace. Andy and uh a lot of people are thinking, oh well, that's that's great but uh it's actually loaded up with one style of owner occupy right now. I'm doing a little bit of a pop quiz ladies and gents a pop quiz.

Pop quiz. I love this. It's type of owner occupy is out there getting financed like there's no tomorrow like um um uh I don't know. I was trying to come up with uh a non rude uh um I just gotta come up with it. No, it's Friday. Just pretend like we've had a few more to drink. It's all over like a right up a drain pipe or whatever it might be. Um but uh yeah, I occupy you think oh gee, everyone's upgrading their home. um but that They're technically not the case. So, uh little pop quiz while we're having a bit of a chat. investors are still well behind the eight ball when it comes to finance recovery but Andy, what we are seeing and I've we've seen it probably for the last maybe you know, two to 3 months really good.

Um investor offerings interest rates and also flexibility in the investor space and one of the things that I do love when it comes to us as property investors is interest only offerings at the appropriate time the beginning of your lending and your acquisition phase not forever. You certainly want to reduce your debt at the appropriate time um but uh what I do know and both Andy and I, you know, help people with their budgets and their cash flows often. Um sometimes you can't do both. You can't you know, get the second property or the third property and pay off the debt at the same time because it consumes too much cash flow. So, uh sometimes you gotta balance it up, get the get the second or the third property and then get on to the debt reduction So, what we are seeing in this space with the investor, the investors making a comeback, Andy is that we're getting lots and lots of good offerings.

Again, we're getting the 90% offering back out there which I do like. certainly when you're in that first sort of one to three properties, getting your money working a bit harder and faster for you is great Um and the interest only offerings out there in the marketplace which are pretty good. Um you know, right now, I did this mathematics for one of our buyers. Uh we've got one in common Andy a client and The interest only calculation for them on a brand new property. Uh after tax, they're on, they're on a pretty good income. Uh it's 13 thousand $13000 positive cash flow in your pocket on a brand new property. You know, it's like, wow, that's just that's just mind blowing. So, you know, in the interest rates at 1.99% for 2 years, you know, so um interest only fixed.

Um so it's not too bad. So out there there's some of those offerings for the right for the person who's got the right circumstance Um that is coming back and uh is looking excellent. So, um it's kind of like not hot off the press news but it's certainly a bit of the news that I think everyone should be paying attention to right now uh out there in the marketplace and um certainly one I think we should uh we should keep an eye on the other thing is that uh I was I was talking about it this morning Andy in my um uh in my rant, my my morning Had a bit of a rant this morning and um I whack down in the bottom There You weren't running with you, Jason.

You don't do that. Uh maybe not. Maybe me but not maybe me but uh someone I know. Um that's not very good there. Um but you know, we um I was having a bit of a yarn this morning and talking about the media reporting and reporting on the property prices like it's the Share market literally every day. Yeah, it's gone up. you know, 1% or half a percent or whatever and I think I think it's ludicrous to look at the Share market that way folks or the property market that way like the Share market It's just, it's just not as fast even though Andy, we've talked about it speeding up. Um it's certainly not as fast as the stock market, right? So, um but one of the things that I was talking about and you and I have chatted about it for a while and he is that when property prices go up, and wages don't keep up the ability for property prices to continue to rise. um will be limited and there only there's only two things that can happen.

You can either reduce the cost which is the interest rates have gone down to two fifths of all or people's wages can rise. You know, one of those two, you know, interest rates coming down or wages going up um will allow people more buying power and capacity to buy. So, you know what's happening out there? There's a bit of rhetoric and I think um uh an uh an uneducated rhetoric around the property prices being reported like literally weekly and monthly and you know um even this little here. I have a look at what's happened. to date this year. You know, for 5 months and it's like, it's like, it's interesting but it's it's not the way to look at it but so, but my point is this one here, Andy um wages are still a challenge uh in our marketplace and um you know, fingers crossed our economy kicks kicks in the next 1218 months, 2 years 3 years when it comes to wage growth uh but property prices right now will start to splatter and see the likes of Sydney run out a bit of steam when it comes to property prices and wage compression and affordability and yields and so on.

So, you'll you'll see the rents come back up as what what I'm what I'm sort of saying uh for stuff in the news. So, we're already seeing rents to come back. um uh as why we go. So, I haven't been checking the chat. Um here we go. Oh, there you go. There you go. I was I was right. I was right into my uh my rant there but um uh Luke, I think You got it first. first off the uh off the off the rank.

Um there you go. Luke was saying, I know who those buyers are and he's dead, right? And it's the first time buyers have a look at that Andy. look at that. Um it's uh that was the boost after the GFC and HomeBuys, finance commitments and have a look at this almost almost identical, almost identical when it comes to the volume of first time buyers that have come out of the woodwork Um every 10 the old every 10 years, the government dust off the old Let's give the first time buyers a leg up.

And it works for uh for a few months and gets things party. It gets the party started again. So, you know, there you go. Um uh Luke, you're right on it, mate. Good job. Uh and uh away you go. So, it's an interesting one. Um uh as you go and you dive into the details of what is actually going on out there and you know, what sort of sort of happening because it's not, it's not the the the person who's got their home, they're not upgrading Andy. They're not, you know, selling this home and buying another one. It's the owner occupies that are driving that new homebuyer stuff which is fantastic. You know, the government let people have access to their super The government gave extra boosts. Um II just helped my brother out and he's ended up making money by buying a property with his like actually made money like after all said and done put ten grand in cash in his pocket. You're like, how's that? You know, you have a free house plus a ten grand cash bonus.

You know, Alright, it's going to be interesting. Looking back on this in 20 years time, isn't it? It will be, it will be, it'll be one of those moments that people will will refer to and go, look, this is where it started. Whatever that thing, whatever that thing is. Uh 7000 by then I reckon. oh man, I'll tell you, yeah, it'll be interesting but last but not the least, in this sort of space, one of those things I think uh I'm probably jumping on to sort of things you should know anyway folks but you know, since 2006, this is a chart.

Uh bit of a shout to Timmy Boyle. He's always uh supplying us with some a good chance. He's a he's a good fellow and uh I love his his uh his stuff that he he provides us but um um this is an interesting chart so we can see when property prices kind of quarter over quarter um have have posted like a negative return, right. And um you know, you and I have chatted about this Andy, you know, when the opera opera stuff came in a came in there and property prices like Property growth not prices but growth process of growth.

Momentum, you know, went on a slide and it and it posted the the largest negative growth. Um we've seen, you know in over um 20 years. So, since 2001. So, a lot of people sort of forgot about that one. Um wasn't wasn't as gnarly as uh as the GFC or or post GFC when the first time buyers were turned off um uh etcetera, etcetera.

So, but it's interesting we're back here now and we've got a little bit of positive momentum but the point is folks Property or growth happens in a positive and it happens in a negative which is all completely normal and natural. just like the Share market too. So, you know, that's my stuff, mate. Uh for what's in the news this week and uh we do have a few questions coming through but before we answer those, I think um uh I'll throw back to you and say what do you got for us mate? right. Well, uh it's uh it's not not overly sexy but uh I think it's what everyone should be uh should be. There we go. uh what we should be paying attention to at the moment and just uh uh a bit of a reminder because it is the new financial year and uh and there's changes. Well, they went ahead. Uh they're actually now so we've we've spoken about them for the budgetary changes but let's have a little bit of a crack at at what's going on.

The first one of the back is super ten uh super is now up to 10% which uh the business owners are not going to like too much and uh for all the journalists out there who are having pops at small business owners and saying that it's uh it's uh I've forgotten the terms that they used unethical behavior. You go and become a bloody business owner. Alright? So, uh unfortunately, for small to medium businesses during a period of time where it is for many businesses extraordinarily challenging. Um they're going to have to fork out an extra .5 percent into their employees wages.

So, I want to look out for here is depends on what your contract says uh and they're calling employees employers sneaky. They're calling them unethical. Um I reckon if you get legislation rights. then you need uh it's it's just the way that it is, right? You can't have it both ways. Uh so, look for those of you who want to know what's going on there. If you've got a salary which is a package. So, you've got $120000 package. well, then your wage will not go up. You will get more so but you will get less in your pocket and uh and that's the way that it should be from a contract perspective. The uh the government are actually Making a little bit of a noise and II. Don't know the full clip on it as yet because the noise is only just started. The government have come out and made some noise in and around the appropriate pass on and uh and so this is them trying to have a double dip at their legislation because uh ultimately the way that I've read it and the way that I understand it is that uh it is it is 10% super uh on your salary.

So if you've got a package that means that you get no more money but if you're not on a package, if you're a contract says, you know, $100000 plus super. Um then it's $100000 plus the $10000 instead of the nine and a half $1000. So good for the employees to go out there and have a look at your contracts. Those of you who are in small to medium business world or employees of small to medium businesses probably good to have the conversation with uh with your boss as well. Uh just so I remind them uh because they can be get busy and and make sure that they're they're on the button as well. Uh they can start budgeting for that but also just to on the front foot and have the conversation so that it's uh that you you just know where you stand better to uh better to have the conversation than uh than let it run. So, that's uh that's the first one and that one and he just quickly before you move on to the next one. Um uh I know it's only talk but there is talk about uh super going all the way to 12% isn't it twelve and a half percent over over the next decade and um you know again you and I talk about this all the time you know, When we talk about, you know, how much money this is in comparison to a percentage of your earning life.

Um you know, take super seriously gang. Uh you know, if you're receiving it, you know, it is an absolute golden opportunity to maximize your wealth into the future. if you understand what to do with it. So, um yeah yeah it's going you know it's nine and a half ten up to twelve is it twelve or twelve and a half They reckon by it by Sunday I'll keep on pushing it up because the figures are sort of sitting in and around if you want the type of retirement you need. it's somewhere between fifteen and is what you need to be packing away. Yeah. So, I reckon I'll just keep pushing that up.

So, I guess we'll wait and see. We've got multiple different government changes. uh likely before that happens or maybe Singapore is 20% Singapore's 20%. Yes. Yes. Yeah. But look that it will be it will have a bit of wage suppression if they do it too quickly and that's the thing that they've gotta be careful of because ultimately it's you know, businesses and if you're in small business uh you know, cash flow can be tight.

Uh somebody's gotta pay for it, right. It's I think that there'll be a combination where uh sometimes the employees are paying for it and then sometimes it'll be the employees are getting clipped on it. Uh so, I think it'll be interesting to see how that changes over time but for now at 100%, it's uh not 100%, it's 10%, it's 10% and you can take that as 100% correct. Uh it is 10% of your salary now so just have a conversation uh in and around it and and yeah get used to it. I mean there's so many funky things you can do with super now in that uh you can get apps.

You trade your own shares. You can buy some Tesla in there. If you're on the right platform. We've we've got a cracking platform that we use for a lot of clients that allows you to, you know, buy your own shares and things like that and uh from my perspective, it it it also gives you, I mean, I don't get professionals to assist with the management of it but um but you can you can kind of take some interest in some things that are interesting. you know, and some great stocks are like the Tesla and then you've got your off pays which everyone was you know buzzing around and I almost don't know anybody who didn't have some sort of a story about making some decent coin on Afterpay.

Uh so yeah, I pay attention to it. It's getting up. It's going to keep going. What's what's this Absolutely. I think that could be Brian if that's you, Brian, give us a shout out. You might be uh coming in via one of the Facebook groups but yeah. um yeah it's a more flexibility in Singapore for you so you can actually use it to purchase your home and for other things as well. So, um yeah it's an interesting one that's stuff. um you know You know, if we were to wax lyrical a little bit about um you know, our opinion on that sort of stuff like I'm a big fan of having somewhere like a super or other things where you could contribute to which is a lower a lower tax treatment and um certainly add some value to your own life.

You know, in in Australia and many places in the world, your home Um you know I think it's uh I think I read a stat the other day Andy up to 68% of the average Australians Wealth is in their own home and um Well, that's kind of good and scary at the same time. You know, we all know that you know, having your own home gives a sense of kind of, you know, pride, certainty, you know, emotional well being, whatever it might be. Yeah. if you're buying one in Sydney, I'll tell you, Well, now but yeah. Well, there you go. Awesome. Alright. Well, mate. um yeah. 1010. 100%. It's ten. It's on. Make sure you take your seriously gang. That's the that's the gig really at the end of the day and just on that mate because you you you mentioned the property side of the equation and and look II reckon it would be great to be able to bring some rules around to acquire property in there because as a part of a longer term wealth strategy that your principal place of residence is 100% there and there's same other little strategies that you can use A it's a tax-free asset and it's an asset.

It is an investment even though you live there but it's tax free, right? As long as you own it in your own name and it's your principal place of residence has been used as an investment property or those relevant disclaimers but uh but a lot of the time we we use that as part of strategies for clients in order to be able to maximize benefits, maximize the tax position uh and then utilize that with super strategies. So, you dwindle the super down and then you an intentional downsize uh built in there when you can't be bothered mowing, you know, out and feeding the cows or mowing large bits of lawn and all of that sort of just that goes along with this sort of larger properties or hovering uh four bedrooms that never get used anymore.

You know, all of those sorts of things. So, it's it really is and should be a part of the the overall wealth strategy for people for their longevity and uh I think that a lot of people miss it because I always go it's the house and that's what it is. It's not it's Another asset that's in the kiddie. Yeah, it's completely agree, mate. You know, it's almost, you know, this is not advice but you know, it's the idea of like sixty to seventy should be well funded by your super seventy to eighty should be well funded by the PPR downgrade, you know, um and then the spare capital that you've created between the two of the spare assets would absolutely fund eighty to 100. very very comfortably. So, you know, you know at the end of the day folks You know, whether we all realize it or not, right now, most of us listening in right now are going to live well beyond eighty or 90 years old and you know, we have to we have to fund it, don't we? We have to fund it.

We don't want to be miserable um at that back end of life. you know, what? I remember Billy Connolly saying, you know, you know, comedy skit Andy like, you know what? Why do I want it? bloody lettuce now and add five more years to my life when I'm not five. He That's rubbish. You go now and and drink and smoke right now because I don't care about adding 5 years when I'm eighty. I can't do anything with them. you know, like. Right. He's also, he's also been known to say I'm sick of people saying that uh that life is short. It is the longest bloody thing you will ever do. It's funny. That's good. There you go. So, that's number one. Here's some stuff that uh that is changing. Uh next uh sorry this year.

Uh so we've now got uh so if we have a look here, we've got a balance transfer cap. So it was $1.6000000 that you could have in super per person uh and then turn that into a potentially a tax-free income stream. It's now up to 1.7. So that is there. That's a massive one if you're in that uh in your if you're in that phase uh and If you're in and around that amount, then you should be looking at uh how you can manage that transfer balance cap. So, the 1.7 Tax-free Dollars in super once you're above the age of Sixty-five or above the age of sixty and retired was 1.6000000.

Now, you've got 1.7000000. Uh we're looking at preparing that with all sorts of strategies uh down the track that's uh absolute we've been got uh our non concession uh sorry a concession contributions cup and For those of you who get sick and tired of the government changing the name of these things every 2 minutes, it's it's had four different names.

It's four different names it's had since and you know what? You know what they changed nothing. Just the name Just the name. it was and I like the first one. It was a deductible contribution. you know, call it what it is. That's exactly what it is. Yeah, yeah. Yeah. It's a it's a deductible contribution or an un deducted contribution That to me was perfect but I've changed the bloody name four times. So anyway, concession contributions which is the contributions that are made by your employer or the contributions in which uh they attract a 15% tax on the way the super uh but ultimately it. You can claim a tax deduction to yourself if uh if you're contributing. So, you used to have a maximum amount here and this is a great tax planning strategy that people can use your concession contributions cap was 25 thousand. It's now up to 27 27 thousand 27500. Uh so that is great. I reckon this is going to continue to go up. I reckon it's uh it's a sure thing that this is going to go up and probably should be going up more aggressively.

Again it was Thirty-five then they brought it down to Twenty-five. Now they back up to twenty-seven and a half. It's like they just can't stop touching it. It's unbelievable. Like a like a little boy and that's it. now explain explain the next one because you know, a lot of people ask me about this Andy like the non concession like, you know, that's why that is. You can put X dollars in from money that you've already paid tax on. Yeah. And look and this is really interesting because there are there are strategies where we are called retribution strategies and uh I bordering on giving advice. If I went to in depth in it but uh what a lot of people don't know is you uh we actually have a death tax in Australia and a lot of people don't understand that and it was something I think it was keating who opened the door to it.

Uh it's a little while ago now and uh and my history is escaping me at the moment but um but money that has had a tax deduction that is sitting in super it is uh is class right is a is a is a taxable portion, right. Now, in the event of death and your super goes to a non dependent. So, somebody other than your partner or it's unlikely that it'll be children and your children have to be dependent on you financially dependent but uh if that goes to a non dependent, then they've got this thing and detriments tax and you never see it and nobody knows about it or very few people know about it.

The only people who realize it is that when they when they get given the check and they look at the super fun and they go, oh it's 100 thousand in super but I got a check for Eighty-five. Where'd the other part go see Annie detriments tax. So, one way that you can, you can get that, get rid of that is to have more untapped contributions to the fund and so these these are the non concession. So, the difference between concession and non confessional is that one is pretax. one is post tax. so, concession contribution is made on pretax dollars. So, from your employer or if you're self uh self employed person It's money from your company that you put into super and you haven't yet paid tax anywhere on it.

Uh a standard non concession contribution is where the money is coming from your personal bank account. So, you've already paid tax at your marginal tax rate and that money goes into super that it has no uh tax attributed to it as it goes into super. So, if you put 100 thousand in, there's $100000 that reflects in your balance zero tax and it forms a part of your tax free component of your super annuity fund. So, if you put one more in than you. $100000. You breach the gap or you trigger what's known as the the the the bring forward provision and uh and if there's a certain rules that you have to, you know, pass but if you're if you qualify, then you can make 3 years contribution in a single year. So, for example, there's some clients that we're using the strategy for now whereby we've just done $100000 in the in the last month coming up to the end of the year and we'll now put in because we can use 3 years into the future but then, you can't make another non concession contribution until after those 3 years are finished.

Yes, yes. and Andy one last little definition on that one which is um which is for a few people listening in maybe, you know, quite relevant. You can um you could use uh let's say you're at a point where you got 200 in your so you want to make sure you've got enough in there for a property. You've got some equity in a property somewhere you could take some equity from your property and contribute it. $100000 into your super as a non concession contribution to boost up your super to purchase a property in there, right? So, that's that's kind of this, you know, other than that's not advice, folks.

Andy Fenton

That's just, that's just like strategy or or um concepts but you know, that's applicable too, right? Yeah, yeah, absolutely. Absolutely and so people need to get smart now about how they're using the super because there's so many little they've called it the system but they've really just made it spat complex um and it's it it is it is really just I mean it it keeps people like you and me uh talking uh because we we obviously love diving deep into it but for your average sort of Australian that they've really made quite a meal of it and uh uh but it's worthwhile spending the time to wrap your head around because when you do then you'll start to see that the strategies are there but everything is longer term now Jace like it used to be you'd go and see a financial adviser just before you're about to retire and we just just go shuffle everything save huge amounts in tax and then bang.

You're you're off now in in order to achieve the same thing. nowadays, you actually have to plan 1015 years out and that's just the reality that that that the potential for you to do Incredible things is there that you've just got to be disciplined and you've gotta take the long journey and uh it is as simple as that. Love it mate. Um and uh obviously if uh a couple are together, you can you can combine these like concepts You know, 1.7 turns into 3.4 and so on, right? And you know, standard non confessional turns into, you know, um whatever it is is it uh 300 300, you know, 400 438 or something like that, you know, whatever those numbers add up to.

So, you know, like you said, you have to be smart, right? Yes. so that's H, Right For each member There's my hieroglyphics. Beautiful handwriting. Got that from the Penn School. Uh so, so yeah, 100%. That's it. So, you can uh you line up your strategies, get your houses in there, whatever you want. Uh that's up. Everything's up at the moment. Everything got indexed and largely wasn't even spoken about in the budget and the other thing to be aware of now as well uh is the eligibility for spouse offset uh contribution and the contribution which is uh basically it's sort of tax free. It's money that's gifted to you by the tax man or by the the Superman which whichever one you want to call it uh to match certain contributions that you make into Super. Now, you need to be below a certain wage threshold. So, this isn't for hiring higher income earners. This is for lower income earners uh but just be aware that those are now up to the balance transfer cap of the 1.7000000.

So that those are the key things that are actually changing in the world at the moment and everyone should be aware about and and really starting to figure out what that looks like for them and uh especially all of those people have gone out and made some uh some good money on a lot of the properties of recent. You can start to figure out well, how can you minimize your tax and uh and things like that getting into the future. So, be prepared. start planning. Alright, I love it. And that's uh that's that's my little what's in the news at the moment. Well, uh but you know, it's uh it's always nice to know that uh we have a few little uh strategic conversations worth having when it comes to this sort of stuff that's for sure.

Um but uh you know um we do have a few people on the old uh the questions. Any questions? we got uh we got a few people quite keen on asking us a few questions Andy but uh we have one here. Uh I'll sort of scroll back up the top and um the first one from Bob and he says like, what do you reckon Is it better to buy some shares now or um wait for the blood in the streets? You know, you and I are pretty well long-term investors. We're sort of like buy well and keep an eye on things Uh what are your thoughts in the Share market, mate? II think that uh and it's again, it's not sexy but it is pretty simple and uh you know, those people who want to time markets, you're going to be right or you're going to be wrong, right? And the markets uh I think it was Buffett who said um markets can remain irrational longer than most people can remain solvent.

Uh so it's true, isn't it? My take Oh, right there. Look. To be fair, we've we've made some incredibly good timely calls but a lot of the calls that we make are there's a significant amount of luck that goes along with them and there's some decisions that we've made previously that didn't quite line up and the trick I guess from the investment side of the equation is is just making sure that the strategic bets that you do take um don't detract in a large way that can add significant value when they do and uh and so being strategic about it but from my perspective in the markets, it's just you gotta constantly be investing uh and if you're constantly investing, you'll you'll ride all of the market cycles, alright? So, three $350 a week if you can punch that away and you get an average of about 7% return in 18 years, that's $700000.

Again, not not crazy sort of complex sort of stuff but then you don't need to worry about market timing. You don't need to worry about these things and um and then if you want to have a little bit of a punt on some on some stocks and things like that whereby you're going to go into more high risk happy days. you've got strategy that underpants it and the behind the scenes and then you can have a little bit of a play and and I'm a big fan of that II. think that if people really want to be investing, then have a little bit, have your fun account. have your your gambling account if you want to call it that something that you can have a bit of a punt which gives you a bit more education in regards to, you know, investing in general because one thing that I do know is as soon as people start to pick individual stocks or start to do those sorts of things, their interest levels go up.

They start watching. They start seeing trends. They start understanding markets a hell of a lot better. So, um you know, is it now look, my belief in our markets at the moment is that we've had trillions of dollars pumped into the system and I'm not sure that the price of the market's fully reflects that yet uh but here's the other thing is nobody really knows what the end result of that's going to be.

Nobody really knows where that's going to end and and then whether something else takes over because you know, we could go into a winter and just really kicks in and rips through and all bets are off that would scare the market. So, I know that I didn't give you the answer that you probably wanted Um it's spoken like a true politician. Andy, We're talking about this the other day. Ouch. Uh always be investing that that is I like that. Always be investing in it is true. You know, I think I think that's the thing Um and uh Bob sort of said the same about Property, right? So, you know and for me, I exactly the same thing. you know, your long-term strategy should always be happening. you know, buy some good things with some fundamentals and keep learning about what they are Um but your punt strategy, you know, maybe maybe you know, you've got you know, you gotta be a bit You gotta, you gotta something. That's that's that's topical and out there, you know, um maybe that's you know, 1% to 10% of your your capital but you don't risk too much.

you know, like the same with real estate. You know, it it goes where you want a foundation of you know, 345, 1 million dollars worth of good quality long-term, hold real estate but if you got a couple of hundred grand of equity that if it all went up in smoke tomorrow, it wouldn't end your world Yeah. Invested in some, you know, small developments or some joint ventures or something a bit more, you know, 1015, 20%, return potential but it carries the risk with it, right? So, it's the strategy is similar.

The implementation is is different and and that's I think that's where people get the implementation ideas mixed with the strategy. Andy, the strategy is by good quality things and keep doing it for a long period of time. right. Um and uh you know, I understand what you're trying to achieve. Yeah and you know, best way to protect yourself against market timing and market movements is inequities is to always be investing. okay? I can't stress that enough and what and it took me a while to learn it really because again, not sexy and it's not the big, you know, mind-blowing, investment banking type of change. the world approach but it's the most effective way by a country mile I'm an absolute country mile.

Always be investing and you will always end up better off and you will get, you will get the big booms and you'll you'll get the busts and the trick is to try and make sure that when you do have substantial amounts in there that you do, you know, take a bit of risk off the table when it's the right time to and certainly, we've taken some risk off the table now, uh a little little bit and uh but when we reep it when when markets sort of fall a little bit, we put it back in when uh when they run a little bit hot we we sometimes take a little bit of profit So yeah um always be investing Bob that's uh that's sort of my 2¢ worth. There you go. What what was that movie? There was a movie or be closing Um I can't remember what that was called but uh you know, always be investing.

I like that. Yeah. There you go. Um Karen sort of said, you know, as the banking sector looking to ease some of the squeeze on investors, policies, etcetera. Um certainly um certainly Karen, we're hoping for that but uh what's actually happened is interest rates have gotten lower which means servicing has been easier but the policies have not changed. They haven't been repealed. There's been there's been talk about it. Um but those policies are still in place. So, um It's to borrow but it hasn't been because of policy. That's just a direct answer. Right now, there are some options what we have seen is some new lending options come out that have nothing to do with policy in the in the non bank sector. Um Karen. so certainly like the light do loans are back in flavor uh and there's a few of the lenders, second tier lenders offering those up you know and it's going to run you between four and 6% interest rate in comparison to maybe, you know, two to 4% interest rate for a regular 180 loans.

So, that's uh that's what's happening in that space, buddy. Um you know, unfortunately, Andy and I have said this quite a lot, you know, being a business owner, um we don't get treated very well when it comes to lending which is a real pain in the **** Uh I just uh I just had a conversation Jason you know I mean and if they're probably watching so we're we're obviously not going to use the names but uh had the conversation and uh we were we're having a good old laugh at it but it's you know, it's pretty horrible stuff because here's the reality, great business employs quite a few people got a reasonable uh ATA debt sitting behind it and uh and I'm like, you know what? You're better off employing your partner paying her your wage, you take her wage and uh and then you get her to buy the house because the the bank will lend her the money but you've got you've got Buckley's chance of getting anything while you The ATA did.

It's like, yeah, get out and I'm like, that's just the way that it is, man. It's like but I just fire it and then I'm like, that's exactly right. It doesn't make any sense whatsoever. Zero sense. Yeah. yeah, yeah. No, it it is. it's uh it's crazy Andy but uh any business owners listening in, give us a shout out.

Andy and I can help you with that with those things if you need but uh yeah, unfortunately, can't can't stress it enough. I think if you're a business owner like you need to be chatting with somebody like myself or Jace just the out of absolute cluster that I've seen uh because business owners kind of get taken advantage of because one of the things that is true is that we're always time for. I've never met a business owner who's who's said that they've just got more money or more time on their. Well, actually I know one that's Julie Fletcher. Uh Julie Fletcher Fletcher. It's it's pretty damn rare and and so what ends up happening is that all of the documents just go in and you can get in some pretty horrific scenarios and uh and just a little bit of strategic stuff and and it might even just be a thirty-second conversation but uh yeah, a little bit of strategy can go a really really long way for small to medium business owners and uh and certainly when you've got good tax years, you gotta strike while the irons hot.

Absolutely strike while the irons hot and um here's here's the other thing about the lending as well is what's actually happened with the current book of the banks is because the property price have gone up reevaluating of the assets. their their capital has actually increased based on the leverage of their book. So, they've actually they're satisfying greater amounts of capital based on their capital adequate requirements. The RVR have reduced because the values have gone up. Yeah, there you go. Yeah, it's a bit more buffer and that's why you get paid the big bucks, right? That's why you can pay the big bucks. We're all over that. I'm not I'm not a I'm not a banker wanker anymore. Nothing more reform reform reform the past indiscretion Uh Luke just gave us a shout out. Any books that deep dive into property. So, uh look a bit of a plug for Sam Sager. Um uh he's uh he's got a number of books Track them down mate uh either on Amazon or ebay or um uh all the likes if you're in our mentoring program, Luke, you can grab them as part of the mentoring program but um the future of property investing in Australia um is one that uh Sam Yeah.

And Sags is my business partner. An absolute genius when it comes to the world of property and might uh track him down on uh Urban property Investor, his podcast and he's got about fifty episodes in now and my absolute gold, every single one of them. So, hopefully that helps you buddy. Um as you're going along, and um you know, make sure that you you dive into that.

It's great to hear that um that you're getting into some education or wanting to get some education because that's really at the end of the day the more you get to understand the markets that you're going to be investing in. You don't have to understand right down to the nitty gritty but the basics of them um the the good basics, not the media led stupidity um uh away you go. So, I tell you grab that mate. Um you know, it's a good read. Um certainly um and uh the other guy that I like mate um is probably one of the only other Property people that I would recommend uh in Australia Um Margaret Lomas.

She's she's quite a good um Property person. Uh she's quite conservative. So, um she comes from a bit more of an accountant financial planner background but if you sort of hedge your bets between Sam and Margaret, um you know, you'll probably end up in a good place I'm not sure whether I just got a uh an impromptu drive by just by I think I just got thrown under the bus a little bit. I'm not quite sure but uh yeah you gotta hedge your bets when it comes to um the the financial planning world and their love of property and you're a very rare uh you're a very rare person when it comes to the world of planning and so that there you go. Um um at the end of the day, the property world, I know, I know you're a big fan of property as well as you know, the combination of our asset classes.

So, you know, at the end of the day, I've I've really enjoyed you introducing me to uh some interesting things actually. So, I love love it all. Like I say, you don't always have steak when you go to the restaurant like you've gotta have you gotta have a few things on your plate to really enjoy the meal and uh and and look and on the education piece. uh that's a big applause for me because before I met Jace and clients used to talk to me about jumping into the property market a lot of the time where and a lot of them thought that I was trying to push them off it and I really wasn't but one of the things that I just found is I find astounding and it happens so regularly is that people spend more time figuring out what car they're bloody going to buy like there's more research about and you're not every single client that I've had outside of your world who's gone and bought an investment property Um and obviously, we don't advise on investment property but uh they've gone out and bought it.

They have done less research and I've literally gone and so tell me about that car. What's the new car? You got The Ford Ford? Yeah. Nice. Okay. so, how many cylinders? Uh it's five cylinders. So, what's the torque? Oh yeah. Yeah. 520 meters of torque and you know, but uh zero to 100. all of these bloody useless facts that I know about their car and then I spend the same amount of time asking them questions about the property and they're like Uh I paid 800 thousand for it and I forgotten what the monthly payments are. I don't know what it's for. Um Alright then and so my my standard rule with clients uh you know, before we started chatting, Jace was how long did it and and II go there first? Now, I was I strategically put the discussion about the car first and go, how long did it take you to figure that one out? you know and it's probably a couple of months I reckon I was I was deliberating of it but I've gone alright so you want to get an investment property.

It's taking a couple of months to pay it to buy an $80000 car. Now you want to buy an $800000 car and uh so My suggestion to you is you double the amount of time that you spent researching the car or in time to to buy ten because that's how much more money you're going to be spending and when you've done that much research, then you're probably willing and and a lot more you're walking in with your eyes open and uh that's sort of always been my advice.

So, kudos to you Um more people should take more interest when dumping more cash into things and uh it's a bloody lately. Yeah. Dead. Right, mate? You're dead, right? He uh I've got a few other ones here. Um yeah, Luke reckon that he likes that you went to forward first Andy. like it's sounds like Luke's a Ford guy. We uh we we just got we just got a ranger and uh.

Oh god I love it. It isn't just uh II feel. I feel like a man when I get into the car and there's something yes, We're going to get some hats from the Holden Brigade in a minute. We're going to move on. Well, Andy, I think III, think II said this to Shay but I I'll say to you like I was, I was um I was you and I were chatting about this.

Uh I was um looking at upgrading my car and um I was very keen on the Ford Raptor, and a very very similar to what you've got and um I was uh I was but the issue for me was it was a Ford um you know because I grew up as a Holden guy, right. So um you know it's uh it's like I really like the car but it's a Ford. If we could take the sticker off and put another sticker on, I'll probably buy it. I remember it well, I remember it well. I was a Ford XF man First, first proper car. that wasn't a paddock bomb. It was uh it was a Ford F I could see you in the Ford F. Yeah, absolutely. Absolutely. Megan. Yeah, went nice and fast. Oh, I love that car. Half a million Ks in that sucker. That's so good. My first car was a Holden HQ and three on the tree. It was a beast. It was a it was a good with a with a straight six.

Uh it was fun. There you go. I did, I did have a station wagon once the uh the Kingswood and uh I'll tell you what, I think I've I think that that car is still got a little bit of my back skin on it because uh we're driving it down from Cara up in uh uh up in a it was a 50° day completely forgot about it. Went for a swim in the swimming hole, came back and sat down in the car and you can hear the back It's sizzling the leather bucket seats.

Uh yes, indeed. That that that's such a it's such an Australian thing came gave us a shout out. You know, what's the RVR on that type of lending? Um you know, you can get up to 80% Lending and Light do. Um so that's perfectly fine. Um 80% 80% works you you do you do get a bit of uh you have to pay a little bit of um LI at that at that level as well. So if it's under 70% with light do you don't pay the other but if it's over 70% you do so you know, There are some options out there when it comes to those things as well. So, keep an eye on those. Give us a shout out if you need some help. Um Andy, which financial agency is reasonable for SMS F loan. Um so, do you, do you have any opinions on the SMS F Lending World? I do know there's about five or six lenders out there that that do reasonably good SMS lending at the moment but LBR and S MSF Lending to be safe for probably sixty to 70% um is probably where you want to land it.

80% Lending. It says that on the stickers but it's very rare um and you probably wouldn't want to push to that level anyway with your your investment properties but um any any feedback on that, any thoughts on that one? No, I just a mirror that you know, you want to be conservative with your Lv also that the cost of the interest is is significantly higher. Um I'd you know it should come down over time but uh there's enough complexity in there that you want to keep it reasonably low because What makes sense, doesn't it? If you're paying twice the interest rate or even three times the interest rate, if you got a loan for half as much, you're probably going to be in a similar sort of cash flow position and uh when it comes to super uh cash, cash flow is uh is king and you just gotta watch that one because you just don't want to put yourself into a position where by uh uh somebody moves out, you don't get the cash in and then you're forced to put money into your super funds and you might be quite young.

Uh you just want to avoid that at all costs like you can do it but then that's just money that you're going to tie up and and ultimately if Just being a little bit more conservative can conserve you really, really well. Depends on the deal. It depends on your circumstances or on the cash in Too early. Andy. Yeah, that's that's my opinion. uh and uh and it's just give yourself flexibility and options Yes. Um very important question though. Um this one's probably the most important one yet. So, Andy, did you have long flowing hair Um back in the day? you know, me in a previous life, I had uh I had I had hair down to here and it was uh it's super super curly my hair used to be and so I'm going to this fat rings uh long ago with my chubby little belly.

Um I was super fit. I was I was playing for a Victorian in hockey and Uh So, I was I was super fit but I just just had a little bit of puppy fat on me. Didn't didn't go up until a little bit later on and at one point in time, Jason, it was peroxide uh down to here as well and uh I was a great musician at that point in time and uh at the hair started to grow out. So, we started growing up so it was peroxide from here down to that. I reckon I reckon Margo could probably provide us with a couple of photos. Margo, I'm giving you a I'm giving you a photo challenge on that one.

We we we just look through some of them the other day and I'm like, there's some photos that you'd never see the light of day there. I can tell you. uh II certainly uh matched you on that one. Andy, I had uh I had a very sporty mullet that was peroxide blonde. very Jason. Donovan Ash um back in the day. So uh there you you I can't I can't throw too much **** your way.

Right. Well, your style style definitely died in my hands. I can tell you that much. It was uh It was uh I just want to look back on pictures of me with girlfriends and I'm thinking what was going through your head woman? Like, honestly, look at him. Uh there's not much has changed. I reckon. I reckon that's probably a good way to end the night actually. Um uh uh I'll get it. because it is the uh it is that time of the year so with with us and with our clients this time of the year, it's the end of the financial year and so we use it for a reassessment of of everything.

So, ideally what you should be doing now is you should be looking at your entire financial foundation. right. So, you should be having a look at all of these different areas and here we go. You should be having a look at all these different areas in your life over the coming month, month and a half, maybe 2 months uh cash flow, budgeting, your mortgages, your super, your investments, your insurance, personal insurance. Uh we didn't answer those insurance questions but maybe we'll get to that next week.

Um the tax and accounting property portfolios, equipment leasing, legal wills, convincing, estate planning, all of those sorts of things. This is really what you need to be looking at. Uh right and starting to assess what the year ahead has planned for you and if you follow the rhythms that we provide. Uh so we split the year up into uh into quarters. We we're thinking about bringing it down to thirds um but at the moment it's in quarters and it's uh in January it's all about New Year's resolution. It's all about um having a look at your cash flow but also replanting what what is the number one focus for the year What are we going to be focusing on financially and setting the year up in line with your 1015 20 year uh plan? Then, when it comes to April, you've heard us say it before.

It's uh March, April. It's tax time for us because we want to start early and get prepared for it in July. That's when we look at what we call a foundational review. So, this is where you want to be looking at all of these different areas of your life and understanding. do I need to decrease my insurance? Do I need to increase it? You know, where is is my mortgage? Do I look at refinancing soon? Uh the beauty about doing stuff like that uh now as well is and now is a little bit different to normal years.

Most people are rushing to get their stuff in for the end of financial year. So, typically, brokers can actually have a little bit of a downtime after July, August. So, it's a really good time to get in to them as well. If you want to increase the levels of your fight, keep topping it up every two 3 years. Yeah, refinancing it, putting the money in the offset account uh and doing all those sorts of things. So, my big tip for everybody here of things that you should know is that this is time to be looking at your financial foundation, Understanding how it fits in with the greater scheme, the greater plan that you've got and really focusing in on any areas that just need tweaking.

You don't have to adjust all of it. You just need to look at it and just see how it fits in and I almost, I promise you, you'll look at at least one of them and you'll go. Yes. Thanks, Andy. Yeah, we should be tweaking that a little bit and uh and so now is the perfect time to do that uh because then later on the year we get into then shuffling and looking at our investments and things of that nature. So, that's just my little 2¢ worth. There's a little tip of something that you should know and something that you should be doing right now is the end of financial year.

Um that's a great tip. Certainly uh bringing it back into focus for us all is um is always worth doing at uh certain sections of the year. So, um a great uh good shout out that's for sure and what I might do if uh if anyone's listening in, I might get you to come as a guest thought we might be able to do it today but maybe Monday or Tuesday again, maybe drop by on uh on Wealth Coffee chats and we can talk about that life insurance borrowing thing because that's um that's something that comes up a bit and uh I think that'll be a great uh a great chat when it comes to those things, man.

So, um 100% that'll be that'll be awesome. Well, great to chat with you folks. Um thanks for joining us. I appreciate you guys popping by and supporting the channel and supporting us and supporting you and uh great to see you guys in there. Um as we're going along and um you know, giving us some questions. Ask one question. I'm going to answer that for you next week. So, um keep an eye out. Um keep you coming back. I know you pop by on uh on uh on Wealth Coffee Chats as well, mate. We'll see you Monday morning Heartache. Alright, It's all it's all for you. I'll get you right on. That one is building the work done to be added to expensive investment property. schedule. I'll copy that one as we go. Good on you gang. Um great to have you guys hanging out on a Friday night. You guys have fun. Have an awesome weekend. Thanks for joining us Andy. One Wealth and Wisdom done again for another week.

Cheers. Cheers, everyone. Join us again next week. Um good night. It's a good night for him. Good night.

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