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...
Aug 14, 2019•20 min•Season 1Ep. 80
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 ...
Aug 07, 2019•13 min•Season 1Ep. 79
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 ...
Aug 01, 2019•17 min•Season 1Ep. 78
To watch the full presentation, go to https://www.prosolution.com.au/recovering-property-market/ My new book out in mid-2026: To join the pre-order waitlist and get a bonus. More info go to: https://prosolution.com.au/book-preorder-bonus Do you have a question for the podcast? Email us at questions@investopoly.com.au . If you're interested in working with our team and me, discover how we can work together here: https://prosolution.com.au/family-office-services If this episode resonated with you,...
Jul 24, 2019•21 min•Season 1Ep. 77
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 regulatorsUntil now, the banks have remained relatively silent about the government’s crackdown on lending standar...
Jul 17, 2019•15 min•Season 1Ep. 76
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....
Jul 09, 2019•19 min•Season 1Ep. 75
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...
Jul 03, 2019•16 min•Season 1Ep. 74
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 taxpayersI recently spent a few weeks travelling around France. It is so easy to get around. Its roads are...
Jun 25, 2019•13 min•Season 1Ep. 73
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 prov...
Jun 19, 2019•18 min•Season 1Ep. 72
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: What is the impact on investors (in dollar terms)? What impact will these changes have on the property market - prior to 1 Jan and after? Is there anything existing property investors should do now? Will these changes ...
May 16, 2019•21 min•Season 1Ep. 71
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 ...
May 09, 2019•15 min•Season 1Ep. 70
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 adviceTo give advice about a mortgage, borrowing capacity, interest rates, products and so on the ...
May 02, 2019•13 min•Season 1Ep. 69
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 inves...
Apr 26, 2019•8 min•Season 1Ep. 68
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. ...
Apr 18, 2019•27 min•Season 1Ep. 67
“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...
Apr 11, 2019•14 min•Season 1Ep. 66
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 c...
Apr 03, 2019•18 min•Season 1Ep. 65
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 tha...
Mar 27, 2019•15 min•Season 1Ep. 64
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 marke...
Mar 20, 2019•14 min•Season 1Ep. 63
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 import...
Mar 12, 2019•16 min•Season 1Ep. 62
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 g...
Mar 06, 2019•17 min•Season 1Ep. 61
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 matte...
Feb 28, 2019•18 min•Season 1Ep. 60
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 ...
Feb 19, 2019•18 min•Season 1Ep. 59
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...
Feb 12, 2019•15 min•Season 1Ep. 58
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....
Feb 06, 2019•15 min•Season 1Ep. 57
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...
Jan 30, 2019•16 min•Season 1Ep. 56
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’ a...
Jan 23, 2019•15 min•Season 1Ep. 55
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 tru...
Jan 16, 2019•12 min•Season 1Ep. 54
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. ...
Jan 10, 2019•11 min•Season 1Ep. 53
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 peop...
Dec 12, 2018•16 min•Season 1Ep. 52
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 Prof...
Dec 05, 2018•12 min•Season 1Ep. 51
