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....
Nov 23, 2020•21 min•Season 1Ep. 140
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. T...
Nov 16, 2020•14 min•Season 1Ep. 139
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 tensionOn one hand,...
Nov 10, 2020•23 min•Season 1Ep. 138
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 basedThe laws that govern the administration of wills and intestacy (if you die without a will) is the St...
Nov 03, 2020•19 min•Season 1Ep. 137
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 t...
Oct 26, 2020•22 min•Season 1Ep. 136
Investment update: How to navigate current uncertaintiesThere 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 evid...
Oct 20, 2020•18 min•Season 1Ep. 135
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 e...
Oct 13, 2020•15 min•Season 1Ep. 134
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 ma...
Oct 06, 2020•20 min•Season 1Ep. 133
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 govern...
Sep 30, 2020•20 min•Season 1Ep. 132
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 nationa...
Sep 22, 2020•20 min•Season 1Ep. 131
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 ...
Sep 16, 2020•21 min•Season 1Ep. 130
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 mo...
Sep 10, 2020•21 min•Season 1Ep. 129
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 i...
Sep 01, 2020•18 min•Season 1Ep. 128
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 ex...
Aug 26, 2020•16 min•Season 1Ep. 127
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 mathI am a strong believer in only employing evidenced-based investment met...
Aug 19, 2020•17 min•Season 1Ep. 126
Slides - Click here Watch the video - click here 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, please leave a rating on your favourite podcast...
Aug 12, 2020•1 hr 6 min•Season 1Ep. 125
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 ...
Aug 05, 2020•24 min•Season 1Ep. 124
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 ap...
Jul 28, 2020•17 min•Season 1Ep. 123
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 firstI 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 20...
Jul 23, 2020•27 min•Season 1Ep. 122
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 coupl...
Jul 14, 2020•18 min•Season 1Ep. 121
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 laggingFirstly, let’s start with the good news. The good news is that ac...
Jul 08, 2020•19 min•Season 1Ep. 120
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 valueLet’s face it. We all want to get the best de...
Jun 30, 2020•16 min•Season 1Ep. 119
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 ov...
Jun 24, 2020•24 min•Season 1Ep. 118
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 propertyIt certainly doesn’t cost a lot of cash flow to borrow to invest in a residential property at...
Jun 16, 2020•18 min•Season 1Ep. 117
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 wo...
Jun 10, 2020•15 min•Season 1Ep. 116
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...
Jun 02, 2020•19 min•Season 1Ep. 115
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,...
May 25, 2020•21 min•Season 1Ep. 114
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 homeMost employees have been required to work from home over the past few months due to the COVID sh...
May 19, 2020•15 min•Season 1Ep. 113
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 pr...
May 13, 2020•16 min•Season 1Ep. 112
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 se...
May 05, 2020•15 min•Season 1Ep. 111
