Hello, and welcome to the Australians Money Puzzle podcast. I'm James Kirby. Welcome aboard everybody, and welcome aboard to a special edition of this podcast because it's a pretty special day here at The Australian. We are launching a Wealth Vertical now. A Wealth Vertical is a digital unit within The Australian and it's going to be all about wealth in all its dimensions. And many of the people that you know and are familiar with from the podcasting myself
and James Gerard, of course Stuart Williams. You here on Tuesday's Property podcast. You're going to see and read a lot more from them in The Australian, and you're going to hear a lot more from them in the podcast because we are widening the offering basically substantially, so seizing the opportunity to I've asked the Wealth editor of The Australian, Julianne Spragged, to come on the show. She's going to tell us about what's happening. And then when she's done that,
we're going to do something we haven't tried before. We're actually going to talk about our own investing because both of us have been in financial journalism most of our lives and we have I hope, learned some very interesting things that we do want to tell you about.
Hi Julianne, Hi James, thanks for having me on.
Greater Have You on Marshafield has going to be Confession's going to be a confession session.
Well partially confession and hopefully occasionally a part of celebration. Tell us first, what's happening with Wealth on the Australian and how our offering in all its multi media wonderfulness is going to change.
It is exciting.
We had some research that came through said lots of people want to be financially independent. People want to be able to have this job because they want to have a job for it to be a joy and not a chore. And the concern though, is that a lot of people aren't as financially literally as they want to be. They don't know where to go to get a lot of this information. They might see their mates or their friends and they're getting ahead, or they've got investment portfolios
and things. I don't know the how, the why, the what, and so what we want to do is create this one stop hub, a place where you can get trusted information. So that's no matter what stage of the financial journey you are on. So there'll be information about investing, property, investing, superannuation, retirement planning, all those bits about that are very important for your life. But I don't know about you, James, but you just get caught up, don't you.
Yeah, you do. And we've always had a lot of material and there's always like there's always been a good materia coming in different ways in different parts is such a big operation. And then we have podcasts, and then we have like Baron's Top Advisors, we have videos and we haven't put them all in the one place before, so I think that's part of it. So I do I recommend all the listeners have a look at this. It's launching today and I don't think there's ever been anything quite like it in media.
Can I just say true for your listeners who love to listen to you. Twice Withightly on the Money Puzzle, we have put together a video series so that one to see James Kirby in real life.
We did it on before we started the show. We were just laughing. The day we did it was the worst day I can ever remember. Weather wise, I should say, but we all flew in to do this video, folks, and it was just so bad. It was unreal, and we were all late, and all the flights, the two flights before me were canceled on the two after. I mean, it was a miracle that I got actually to that
session at all. But the videos will be on this site, and we've done a whole series of masterclass videos which capture some of the sort of core areas of in and I recommend them to you. They will be distributed, or at least they'll be published. To see the sequential fashion in the days of head So look out for that now, Juliane, since I've got you in the hot seat, let's do this. I've been awfully careful on this show over.
I mean, we launched a show in twenty twenty three, and I only kind of respond when we have listener questions. I respond, So if someone says, do you have shares in something? I'll answer. But I've never really expounded upon my portfolio on air before. I'm happy to do it on this show. We split it into shares here in the first segment, and then we might talk about property, and then we might talk about super which shares. It's interesting Eric Johnson and I were just talking in the
office today. Eric's course associated her business. He was talking about it's the Compseck was launched thirty years ago this week and he'd been talking to the guy who launched at Michael Katz and it was extraordinary about Compsack and nap Trade and the other online brokers. When they came in,
they changed everything. Because I don't know when you bought your first shares, but the day I bought shares the first time, I bought two shares five hundred dollars to each one Pacific Dunlop and National Australia Bank, and I had to go in. I was twenty five. I had to go in and sit in the reception of Potter Warburg in Collin Street, and some unfortunate stockbroker came out
and talked to me about what I was doing. And the diversification of my portfolio was that I bought two shares rather than one, and one was terrific National Australia Bank. It doubled in price and the other one went almost to nothing. So it was a very good early adventure in shared trading. Can you remember your first shares.
I can remember the first discussion about shares. It was my dad and I think I was eighteen or nineteen at the time, so of an age where shares had little value to me. You know, it was it was you know, it was a time where you're studying university and out at the pub and it was I'm trying to remember which iteration it was, but it was Telstra. Oh, yes, Now I don't know if yeah, I don't know if it's T two or T three.
Yeah, one of the floats.
It was one of the floats.
And Dad was saying to me, you've got to get in, You've got to get these shares. And I said, well, how much do I have to spend? And he said two thousand dollars and I just I can still remember just saying.
To him, you are crazy.
That is a lot of money and I'm not going to be doing that. I look back and think, well, just as well, that was Telstra. Imagine if he was recommending CBA or something to me. I wish that I had spent the two thousand dollars on CBA back then. So I didn't buy shares. I came to it later. I remember one of the first shares.
We ever bought. My husband and I it was.
And we'll get to property soon, but we were Actually it was sort of boom times in Perth. It was to two thousand and six, two thousand and seven around.
Them, the mining boom.
Mining boom was in peak property prices. It felt like they were doubling every few weeks. They weren't, but that's what it felt like when you were here. We were trying to get our first place, and so we were at a housing estate. It was roughly about thirty kilometers north of Perth, and you had to camp out to get the land. Wow, it was seven nights in the back.
Of a ute.
Wow like plots, I know, Yeah, that's like a story from the gold Rush.
One hundred percent. It was one hundred percent. And I just remember seeing that.
The property developer of the estate that we were buying in was Pete and I was seeing this and I could just I was like, day, I'm making so much money and I can't believe I have to be sleeping in the back of a You ticket land, we should buy shares, and so we did buy shares in the developer. I look back on that now and think that's probably not.
The smartest thing to do. I was probably doubling down.
On the investment.
We bought the land and he bought the developer.
I probably should have for people to do that, though. They gravitate towards what they understand. If the factory at the corner over your street seems to be going great, and you realize it's on the stock exchange, then if I don't you, it's like bottom up investing. I actually had a marvelous example of bottom up investing. I was involved in a startup which was called well Mid Clothes,
and it was an online clothing retailer. They had been going for a while and they got in a widget basically a piece of software called after pay, and they put it on, they installed it or whatever one evening, and the next morning they got all these orders that they'd never got before. And I remember thinking, that's very interesting. There's like hard evidence from the ground bottom up, if
you know what I mean. I knew the top down, and I knew the story from top down, and we all know that the view of the market or whatever, you know, the big picture. But when I heard that, I remember thinking, this is no joke. This after fably is something and that was an example. I remember getting into after Pay and it went really well and it was a really good investment. And that was something that came through almost like you know the street. But that doesn't happen very often, can I.
Ask you though? And sorry, we're going to go down. We'll go down different rabbit holes.
But say so, if you got on too after pay early, goodbye, good tip by you. What happened then in the pandemic after pay dropped, there was a it just dropped like a star. I can't remember exactly what it went down to, about eight dollars or something like that, that's right. And I remember being pretty smug because I didn't buy after pay, and I remember thinking, hah, I knew this was all sort of smokes and mirrors and this is all going
to be cactus and toast. And then it just rebounded nothing else because ye locked down and everyone started shopping. That's right, you know, ended up at one hundred bucks or something.
To it was magnificent, stark. That is a magnificent trade. Really, I mean it was always wild and I didn't stay till the end, you know, so you always leave something out of the table. But was probably what are the best stocks they ever bought from me? I probably got out. I did get out too soon, but it was a terrific stock. I did well, you did well.
I did well, So to your point, and maybe that's the lessons here for people if they want to start investing in stocks, is maybe it is smart to invest in what you know or have a sense of what the market is. So the one I did well on was coals. So this was before West Farmers bought Coals, and I remember going there Coals. I still have my coal's name badge from my university job on the delicatessen. No one will slice purtidos thinner than I can slice it.
Fel oh, very fantastic.
But it was went gym up so before West Farmers had bought Coals. Obviously it's on its own ownership now, but it was in the Doldrums. It wasn't a great supermarket, and I can just remember thinking this is a duopoli, that this there's not enough supermarkets in this country and it's not going to be down in the Doldrums forever. So I remember getting in early and the West Farmers came in and then spruced her.
Up best farmers come in and paid an enormous amount for it, right smack at that two hours before GFC. So I think one of the things that's useful folks about share investing is ideally if you can if you do understand the stock, it helps enormously at least your connection to it is better. Anyone can start and play. Basically you can buy a stock or two stocks this. You can always buy exchange traded funds as well, which
is what I generally meant. If someone says to me what stocks should I buy and they don't know anything, they've never done anything, I always say, buy an exchange traded fund by the AX.
I'll ask you about that now, though, because I'm in this basket where I think I need to do better with my stocks.
You know, I've just sort of almost.
Played with them rather than proper investing anythink and ATF the way to go. Atfs have exploded so much that I now find them incredibly confusing. There's almost too many ETFs. Which one are you're back?
Yeah, they've drifted from the original proposal. Absolutely. The original proposal was really good, you know, it was by the market. Just buy the ASX two hundred or buy the S and P five hundred plus vanilla, and whatever happened to that market happened to your ETF. So if you both the ASX two hundred ETF a year ago, you'd have made fourteen percent, because the ASX two hundred med fourteen percent in the twelve months to June thirty, being you know,
ten percent plus four percent for your dividends. I think that's still the dominant model. The problem is with these guys, you know, Julianne, they can't sit down and leave good alone. They got to keep coming up with things, right they you know, there's seven hundred people in Vanguard. What did they all do? Well? Guess what? They get new ideas and they go into the boss and they say, hey, boss, guess what, I've got something in mind that would be
really good. And so that ETF thing is drifting. So I think when we talk about ETFs on the show, certainly I always make the points plain vanilla ETFs, and I would say to most people most of the time,
if you're starting with shares, ETFs are great. And if they had been around when I was starting buying shares, it would have been so much better than buying two shares, one of which turned out to be great and one of which turned out to be useless, and you don't that's the sort of risks you don't want to take.
If you could go back in time, just pretend that ETFs where they, you would have bought an index ATF I would.
I would suggest to anyone starting get some ETFs, hold them for a year, start to understand how it all works, Watch how you get your dividends come through, and how it works with tax and everything else, and get a handle on it. And you've you know, you're taking very little risk because you're just taking you're just buying the market. And then after a while, when you're a bit more sure of it, it doesn't have to take forever. It could
take six months, it could take a year. Then you can start to strike out and you can say, okay, this time, I'm going to buy direct shares because personally, I think ten shares is about as much as anyone should have. That's as much as you can hold in your head. Really, I should be if you've got I always say, if you've got chairs, I should be able to ask you what are they and how much are they today? And unless you're you know, got a photographic
memory or something. I reckon about ten shares is about as much as the one should have, and it is enough. It can really you can diversify. You can buy banks and miners and tech companies and everything else. That's something I would say. The other part I would say is that at a certain point you've got to get serious about shares if you're a long term investor, especially if you're thinking of building your own portfolio or your self managed super fund, and at that point then you don't
have to have a connection with them. It's all about the numbers, you know, It's all about is this share good value? At the moment it's the old Roger Montgomery thing about value and Roger of courses. Another person's off and on the show rights for the Australian will be involved in our new vertical. He's whole thing that you know, you're buying a piece of a company, you're buying a little TV bit of the company. So what really matters is their company and how is the company going.
My problem, I reckon is because we're in newsrooms and we cover a lot of stories. We cover a lot of stories about stocks that go absolutely bananas. They deliver incredible returns. But for every one of those stories, we're all doing stories or when things go wrong, yes, and we should when he's a collapsing and share prices are tanking, and so it does leave you sort of kind of clinging to the sidelines because you don't know which way to go.
You know too much, You almost know too much.
I have threatened to do it, and maybe for this new vertical I should. I was going to create a list of when I had met a billionaire or rich.
This does.
My former job was editing rich lists for the Financial Review, and I look at some of the share price growth and I think, if I had bought shares when I met that rich list, yes, would I be in fact talking to you on this podcast today at the book, James, I'm not sure. I was with Andrew Forrest in the Pilborough in two thousand and six having a look at what would become four to Skew Metal screwp. He's looking at the dusty Pilborough.
And oh, what a great story, Yeah, and.
Asking me whether it is the most beautiful thing I've ever seen. And I'm looking at a concrete pylon in the middle of nowhere, and I'm thinking I've seen prettier things, you know, but I could see why he.
The share is republic a dollar or something at the time, I think that could have been less.
Yeah, pretty sure. I emailed someone just.
The other week actually, just to get a comment for a story, and I said, oh, I just want to look back the last time, you know, we'd spoke properly, and it was a couple of years ago. And if I had bought shares in that particular company, Promedicus, I think I worked out if I bought a thousand shares, I would have my three hundred thousand dollars. You know what I could have should at James.
Well, as you say, the thing is, it's all about risk. So if you buy the ETFs, this is the minimum risk approach to shares, and then after that it's a question of the more risk you take, then the more likely you will have volatility. And volatility, as you know, folks, basically means it's going to go way up or way down. So for every pro Medicus, there's ninety nine little medical device companies that go nowhere. And maybe we'll leave it just there, because that's the point we really want to
make about shares. We'll have a break and we will come back and we will talk about what everybody loves to talk about. Property. Back in a moment. Hello, Welcome back to the Australians Money Puzzle podcast. James Kirby here
with Julianne Spragg. Julian is the Wealth editor of The Australian, and we are talking on the occasion of the launch of a new Wealth vertical on The Australian, which is going to be really terrific and I'm delighted to see it because it's basically putting a lot of effort and investment and people into the area that we've been working on here for some time on the Money Puzzle, and the Money Puzzle too actually, as I say, is effectively
being relaunched inside this Wealth vertical. This week you'll see a lot more episodes, some new voices involved here, and we'll do some shows a wider nature than we've been
doing to this point. Now. As you know, Tuesday's Property Show is becoming very popular and I've dealt with property for a long time and one of the things I want to talk to Juliane about is again something of a confessional in the way that we talked about shares there, and by the way in the first part we were all very smart talking about how the shares we had that were great and that there were big winners. I do want to mention that I've had some absolute duds.
I had Great Southern Plantations, which was one of the worst shares in the history of the world. And even at the moment in my little ten portfolio, I have I think a dud, and I just won't sell it because it keeps teasing me that it's going to get better, which is Ramsey Healthcare hearing me loud and clear, Ramsey Healthcare. Now on the property, you can't make mistakes on property like you can make mistakes on shares, can you, Julianne, It's a different story. It's a big commitment. That's the
first thing, isn't it to explain to people. It's a big commitment. It's illiquid, it takes a lot of effort, it takes a lot of commitments. I mean, you needed an almost like you almost need like a settled lifestyle and a really clear model to do property. You can't play with it like you can play with shares.
I think also it's the sums of what's involved. At the beginning our shares, you might be able to sort of do five ten thousand or build up to a fifty thousand or one hundred thousand portfolio. As I mentioned earlier, when we brought out the shares and the property developer, we were camping out for this block of land at the time. And I know people who are looking into property now will be thinking, oh, heavens, I wish I
could get a block of land for that. But I think the block of land was around two hundreds, two hundred and twenty thousand, something like that, and that, just for me in my twenties was an extraordinary sum of money. The loon hadn't built the house on it yet you got to build the house, and it's what I just remember thinking, this is so much debt and how are we going to manage every little penny.
Yeah, you're taking on a burden. You are taking on a burden when you buy a house. It's really hard. I mean, in my family, we're at that point where my adult kids are starting to look at the property market. And you know, the thing is the course, the prices. When I say the prices, I'm not saying that in a vague, sort of simplistic way. What I mean is the price of property as a multiple of the income that they are making, or anyone is making, has changed
so immensely that it really has changed the game. I met out that the first house a boat in Melbourne as a home was an inner city cottage basically, and it was three and a half times my income income. My income at the time was fifty grand and I could buy a house in inner city in Melbourne for three and a half times my income the same house to buy that house stay, which is there, if someone wanted to buy it at three and a half times their income, they'd have to make three hundred thousand dollars
a year. And the thing is, how many people make three hundred thousand dollars a year? Not many. And so the point I'm making is it's become so expensive, and I mean that in a very thorough way. I mean that as a multiple of income, as a measure internationally, as a measure historically. And you've did something recently, bar was it UBS where they were making the point that our wealth is so tied up now in property.
Yes, so UBS sort of tracked global wealth and in one of their most recent reports. It does highlight Australians really are some of the wealthiest people on the planet. And I find this really interesting when you read it, because I think if you talk to most people and said, you know, you're really rich in global terms.
People you don't feel rich.
It is because it's all tied up in these assets and you've got debt attached to it and all those sorts of things. But what ubs that They made the point that there's a disproportionate amount of wealth tied up in property for Australians without property prices are some of the highest in the world, and so our wealth is tied in to that. And then we have this conundrum.
So as you mentioned, so you were able to get into property three four times your earnings, your kids now have to have ten eleven times earnings.
That's right, And how.
Do we fix that? How do you fix that problem? And so I'm approaching this so my daughter's much younger, orders six, and if property prices keep going how they have been going, I love her daily, But does that mean she's with me for life, for the end or what am I doing?
Now?
Their deposit will be larger than the value of the homes we bought. I mean, that's happening already. It is. It's really tough. And I mean, and my guys do turn around to me and they say yeah, yeah, and they're saying like, I don't know if I want to do this, And of course I am saying you must, because it's not going to get cheaper. I'm sorry, but it's not going to get cheaper. Well.
I spoke to a property developer.
This was before I actually had my daughter, and he said to me, he said, oh, are you planning to have kids? And my face must have had This was such a random thing to ask me for you know, we're doing this news interview. And said, I don't need to pry. I'm just the reason I'm asking is that
you need to have a plan. So for every child you have, you should have an investment property for that child, because then you'll need to sell that investment property to provide the deposit for your children to get into the property market.
This was his thing.
Yeah, And I mean, it's a terrible, brutally rational way to approach it, but it's true.
So I just had one child and I haven't bought the investment property, but we are looking into it because it's sort of thinking about where to go.
With that, and in a way, we're chasing our tails, so we all run off and we stretch ourselves to buy investment property so that we can catch up with the property prices. We are pushing the prices higher by investing in property, but we're doing it because we're worried that prices will be so high for our own kids when they go to buy home. It's hard work, but I'm a pragmatist at heart, and I think that's it, right,
that's the game. So the game is there, and what we're hoping to do on the show always is help and inform people what is going on out there, insights into what you can really how you can play it.
Yeah, with everything that we've just spoken about, so these are conversations that happen around dining room tables across the country, and it's not lost on the politicians. And I do wonder if you've got labor in control. They obviously a few years back, tried to float, you know, run up the flagpole different ideas on changing capital gains tax and yet a whole bunch of other things, and it didn't go down. Very well. I do wonder if we're in
an environment. You know they're going after now super and we'll get to a super discussion soon. But whether you think that some of these tax leaders and trying to work on a policy sense to get properly markets tamed will be on the agenda.
I mean, they've been re elected with an enhanced majority. If they are ever going to tackle this issue, this is the time to tackle it. I think there's an appetite for it, and I think even people who are totally pro investment know that the system is terribly upside down and it favors older Australians against younger Australians. The super system does, but so does the property system, and it favors homeowners over renters beyond a doubt. You can
have a ten million dollar house on Sydney Harbor. You can have a twenty million dollar house on Sydney Harbor and you can get the pension that is. So that's something that could be reassessed and we know Tanya Plipper six Social Services Department is looking at that. We know that they're looking at the Labor Party is looking at capital gains tax. Again, that's property if you hold a property for more than a year, you only have to
pay twenty five percent CGT. That discount is I think that I think these are I think these are sitting ducks actually, Juliana. I think that this is where they're gonna this is where they're going to peel wealth taxes from. And it's all again it's around property. And of course it's around property because going back to what you said at the start, that's the cornerstone of our wealth. But you know, we are getting to a point where it's
I would say it's backfiring. But if you are an investor now and you buy an apartment in Sydney for a million dollars and you're getting two percent rental yield and you're that's hopeless. It's hopeless. I mean as an investment, everyone loses, the rental losers they're paying so much. The investor loses, they're paying so much for the property. The yield is going to be really low, and then the game becomes almost exclusively a game of hoping you get
the capital gains tax at the end. So I think something has to crack here.
I agree, Yeah, I think it's just going to be what, Yeah, what is it?
Going to be well, we will be covering that very closely. Indeed, don't you worry, we will not miss a beat on that one on property and property taxes. But you know, I've had lots of people on the show. We talk about tax and we talk about the restraints if you like, that are in place for investors, and you will always have restraints. And when you have a labor government in particularly for a second term, they have a very clear agenda and often that agenda is not pro investor. Occasionally
it can be. Under certain under the Keating regime, he managed to do both. I don't think it's pro investor at the moment in any way under say Jim Chalmers. But when you have people on the show that I've talked to, the one thing that I find with the is they kind of whatever the obstacles are, they're determined to overcome them. They will say I'm going to do it anyway.
Yeah.
So with what we know, and there's probably changes of that, there's going to be political pressure to do something. And you mentioned so you've got your there's adult kids.
In your house and one of them is looking at property.
Yes, yes, indeed, what's your.
Advice and how are you trying to guide them?
My advice always is that that there's two entirely different issues in property. One is buying a home and one's buying an investment in property. If you're buying a home, a lot of things that we talk about on the show are have to be seen through that filter, because there's this enormous thing if you buy a home. Number one, you're not paying rent anymore. If you buy a home, you immediately enter the privileged arena of the property owner.
In Australia, where there is an where there's exemption from capital gains tax, where even when you get when you're older, there's an exemption from the pension. The whole system is loaded in favor of the homeowner. And that's why I support things that some people think are controversial, like, for instance, tapping super to buy a home. But the way I look at it is the system is so tilted in favor of the homeowner. It would be much more important to own a home than to have an extra twenty
or fifty grand or whatever in super. If it's coming down to that, then really the home is so important. So I kind of separate that very and you can buy an apartment. The point I'm making there is that we know houses are much much better investments and apartments in the main, But when you're buying a property as a home, the first thing, and the major thing is to just buy it. Do it, do it, don't be I was thirty three when we bought our first home. Because I'd lived all around.
The world, I would say that I agree with you, But because when I look back, I think, gosh that one of the top tips for people would be to talk to me about when I'm buying property and then run the other way.
I have this.
Uncanny ability to buy at the top.
That's perth for you.
No, it's very sickly, it's perfectly.
It is notoriously so.
But if I look back, it doesn't really matter, because it does. I would have made a lot more money if I had not bought at the top. But it goes down and then it comes back up again, and it goes up, and then it goes down and it goes up. So if I had never have gotten on the property ladder, it would be eyewatering to think about trying to do it. Now.
That's right, I know, it's really that is the thing I'm saying to people on the show all the time, just start and as you say, if it's a home, it's so different. Okay, you know you've got a mortgage. Okay, last year was really good. For what's happening this year. All prices are down. You don't care about that. It's your home. You're living there and years past and you know, guess what, every five years it's higher than it was
at the start of the five year period. So yeah, it's a different things.
And you get in.
I still remember that very first distill mentions. It was twenty five thirty k's out of Perth. You know, it was a frontier types. The fences hadn't even been built yet. You know, the first week in this house, this is.
Everyone did everyone have a rifle of a rifle beside them?
It was Actually, it was so fantastic because you got to know your neighbors in this camp at this random situation. We've got seven nights out to get the land, and then you all built the houses together and there's this real camaraderie. But I remember the first summer in that house. It's person it's the out of suburbs, and so we
didn't have money for the air. We had no air conditioning for the first couple of years, and for summer we so I bought these two dollars water bottles, the spray water bottles, and we had a pedestal fan at the foot of the bed and you would just lie back and you'd wait for the fan to just kind of get near you, and then you go sprits.
It splits the water bottle and.
Then you just get this spray of water to try and help you sleep, you know, in those forty degree days.
Good for you. So you did it the hard way, telling us you did it. You did it the hard way.
You know sometimes and I know this gets thrown around a little bit, but you sort of think it's just you do sort of sometimes you've got to kind of roll up your slaves, do it tough for a bit and get in and then find your way.
Now we're not still in that.
We sold that property and you know we've moved to Melbourne and Sydney and back again. Many properties down the line now. But we do talk to people gens to get frustrated that there's a sense that everything has to be perfect.
Yes, and Stewart Williams on the show has said more than once. He doesn't say this young he doesn't stand back and say this younger generation aren't prepared to do it tough. But what he does say is that people are much more skeptical and cautious about the renovator opportunity than they used to be. That's because, among other things, there was a shortage of treaties in COVID and some people got terribly caught, and there was a thirty percent
inflation of course in building materials. But that is over now. But is that part is over broadly, But there's still that fear in the market about not just about renovating a house, but whether your plans can be execut in the way that you think because of both shortage still some residual shortage of trades and the price going up all the time.
In defense of the younger generation, I will say in our coverage coming up in this new Wealth body of call that we're launching, keep an eye out.
We've got a story. We've chattered this. I want to say, kid, but it's twenty six. He's not a kid. He's twenty six year old, and he has made sacrifices.
All of his friends have gone out and you know, there are music festivals and are off doing things or they've got new cars, and he hasn't done any of that. He's sort of head down the backside up, and he's got quite a few investment properties and counting.
He's just really rolled up his slaves. So we'll yeah, story to life.
Yeah, okay, look forward to seeing that one. All right, Now, what we might do here. We've talked a little bit about shares and starting and shares and what you must do to get going in the share market. We've talked a little about property and how to start in property and that, as I say, there enormous division between a home and an investment property. And we didn't talk much about investment property except to say obviously investment property is
a different game out together. It's just basically about the price. So the price you make your profit when you buy. You manage it as best you can for as little cost as you can, and that is a different game than buying a home. In the last second, if we're going to talk about super because this is often where it all rose for everybody. The reason you are investing, as Julie Anne said at the start, and I do
sincerely believe this. It's a great way to be. You can enjoy your job a lot more if you don't have to worry about whether you need to be paid or not. That's one thing. The second thing is that we're all going to need super. It's become extremely expensive for what the country. As Julie Anne said at the start of the show, what sort of super are you going to have? How are you going to start it, how are you going to approach it? Let's talk about that in a moment ago. Hello, Welcome back to The
Australian's Money Puzzle podcast. James Kirby, Associate Editor Wealth on The Australian, talking to Julie An Spragg, the Wealth editor of The Australian, on the occasion of the launch of our Wealth vertical on The Australian, which we, by the way, have been working on for a long time. Julianne has been working on this since April April, and it's now.
About that very first I came across worked at the Financial Review and then had a since talkback radio believe it or not, James, and then took up this opportunity. Yeah, it feels nice to be back on the tools to be honest with the mar headphines, it's.
A wonderful thing that journalism has that sort of widened, that we can do videos and we can do podcasts and we can write as we always did. And this is what this vertical is all about, getting you the reader or the listener or the viewer, and getting what
we know through in different ways. Now this segment, I just want to talk about super And the first thing you need to know, folks, is that I have gone separate ways on super She's with big super, a big super fund, which just sends her a statement every now and again. Or she can go online and she says, oh, there you are. It's gone up again. Isn't that nice? And I do my own So I have a self managed super fund since two o sixty year before the GFC. Who I caught it tights, Yes, So.
So then I mean, you know where you live, so you can send your own statements this that's fair enough because this is real confessional time. This is such a confession. I don't think I've got a statement from my super fund in probably three years because we moved.
Yes, So that gives you.
An understanding of how little I have paid attention.
And you would be in a very large group of people who are not engaged, as they say, with their super fund.
Why what would I be when I have so much going on in my life, James?
But what I love about this job.
So I've started here, We're building the New World vertical, getting across a lot of this information. And what's coming across clear to me is people start to really care about their super when they hit the mid fifties, because in your mid fifties, you're thinking about we want to retire and what.
Is that balance? What to do?
And I think we have a real I don't know if it's an issue because I think there's a compulsory superannuation system was set up that there's now a lot of people are younger people who will have these balances going forward. But I do feel like there's this moment where we have to get people a little bit more interested and engaged because you can make all these little micro decisions along the way that can really reckon.
And I've on evenly focused on it. I reckon because of this job.
Yes, yes, well, And the other thing is people, Yeah, as you say, look, you can try all you like, but you know, when I was twenty five or thirty or probably thirty five. As for super, I didn't care. I did not care. I mean, to me, it was unimaginable that it would ever be an issue. As you say, I think around maybe when you have kids, well maybe when you have kids you sober up in so many ways, but you certainly sober up in terms of money, and you say, ooh gosh, I'm going to have to have
money if I want to. You know, it's almost My approach had always been I want to have money because I want to get that out of the way. I just don't want it to be an issue. I don't want to be worrying about that. I don't want There are plenty of other things I want to do. I don't want it to be an obstacle because in my experience I often found that people it was people who actually didn't manage money very well that talked about it the most.
Yeah, I think I come at it from a point of view of I'm a fiercely independent person. Anyone who knows me will tell you that. And I also so I feel like carry that with money habits in that I don't want to have to rely on anybody else. I don't want to have to rely on the government to provide a pension for me. Right, if they want to throw money my way, we can have a whole other conversation. I think there needs to be quite a big overhaul some of it, particularly that the middle class
welfare that goes out. There's this sense I feel like we've bred entitlement, you know, through GFC and then the pandemic.
This sent majority of every situation depends on the system. Two and a half many people get a pension.
Yeah, I would like to be able to just be confident enough that we've got things sitting there.
But I will say that I think you're right. I think in your twenties.
Or thirties, it seems like it's this sort of it's not fake money, but because you don't get to see it, touch it, feel it, it gets quarantined. You can't touch it until you're back. When you're in your twenties, you feel like you have to be a real old person. And then you sort of, as you mentioned, you have kids, you get focused on it, but you've got to raise children, and you might then now be in a situation where your kids are a bit older. You've got aging parents,
you need to look after them. The superannuation system, James, I think it's actually quite complex. It's simple but complex at the same time, it's not simple.
It's it's absolutely battery in its complexities, and it's full of interns.
Yeah, there's some simple there's some simple things you can do, but there's there's complexity of the system. And I think because it just seems all too hard and we're all too busy, then you just sort of push it in the.
Yes it's too hard basket. But as you say, yeah, and certainly I think the irony is, of course, if you certainly get interested in fifty five. I don't want to say it's too late, but it's there is a danger that it's too late, because it's all about compounding and it's all about it's all about starting early. And that's one thing about the compulsitory system, which I by the way, I think twelve percent is too high, but because everyone must buy law, I do, yes, Why do
you think it's too hot? I think at that point we are getting to a level where people should have more control of their own money. I think a compulsory system was good. I thought it was useful. I think it's climb too high at this stage. There's no way it should go any higher than this. There's still you know, there's still talk it was supposed to go to fifteen
percent in the area and it's not. You know, I think in some ways there's all sorts of other things around it, that there are other issues that people should be able to spend their money on. Well, there's an element of sort of patriarchal sort of thing here. You know, we know what's good for you, but it is actually their money.
It's more the what you want is these nest eggs at the end, right, you want to make sure that we have enough money?
Yes, at the end?
Gosh, where do we go?
And all these conversations. I think there needs to also just be an overhaul of the oversight of Super. I think Super was set up as this retirement saving scheme and now it's what is it, four point two trillion dollars under management?
That's right, with no regulator.
We've seen the collapse of first Guardian and Shield and I honestly the pits of my stomach that's not going to be the last. And less governments and regulators start to really pay closer attention.
There are the falling over each other. But the problem is there isn't actually someone, There is no single regulator charge with watching super and it's a four trillion dollar system anyway, So we digress.
But so let's go back to I'm not in my fifties. Yeah, thank you for noticing.
So what's look at you?
So now now that I think, now that I'm thoroughly engaged, what should I be doing then with my super?
Well, I really do think you should. Well, first of all, make off your mind how you want to live when you're older. Are you happy? You don't have to do anything? You can just you can have a government pension if you want it, I know, but it's there. So I think about how much should you have in super? Well, actually you don't have to have anything, right as a government pension that's not enough for most people. After that, then it's a question of how much do you want?
I mean, I say, the twelve percent is I think the limit really on compulsory super. But having said that, I would have always contributed over and above the mandatory level because personally I wanted to have as much SUPER as possible in my.
So now that makes more sense to me because I thought you were sort of advocating that we don't need to be saving as much as we did. It's more for you about the context. So it's like you should be in control of your money and where you're investing.
Actually that's me. And again that was part of the thing with the South managed super fund for me. And I started it in two o six and I started it with sixty thousand dollars, which is approximately one fifth of the amount I would recommend that you start super Fun with today. How about that? Yeah, so there you are the confidence of it, which is the confidence of
youth personally. I set it up because we were setting up a startup which was called Eureka Report, which you sit around and it was all about, well, the core of it was about self managed super funds for them, and I thought, if you're going to have a job like running a publication based on that, you should walk the talk. And so I started once so I could learn it and really know what it was when I wrote about it and that sort of thing, and that's
why I did it. I had actually been involved in Big super I had actually been on the Fairfax super Fun board as a employee representative when I was a little baby reporter on BRW, I suppose it was. That was very interesting. It was really interesting to see how big super works. Yeah, and I learned a lot, and I learned a lot of its failings.
Is the only reason I mean a big super fund is so I wanted to find a financial planner that was going to be fefa service. So I remember at the time, it was sort of two thousand dollars paid for someone to do that because I didn't want to be tipped into all these products because they were getting kickbacks and this. And we got this financial plan done up, and this advisor said, this fund will be a good fund for you with all the growth. You know, I'm
paying someone for the advice. Great, and we set it all up and I have done nothing else.
I was wondering where you're going to say that. I wonder how often that happens. People go into planners, they spend thousands, and they get in on the documents, they stick them in the drawer and go, yeah, we really should do that.
It's on a USB stick.
Then the insurances were connected to it. It always you know, it was very thorough at the time. Yeah, and then you know, we you know, we got on with life, we were on this journey. Then you know we're going on IVF journey and so that if you want to know where to go.
And so this is what I'm trying to say.
Why I think it's really exciting that we've set up the world vertical is I think there's a lot of people who are in a similar situation where life just gets hectic and chaotic and busy, and you try your best and you set things up, and then there's there's timeshe we think, Okay, I probably need to smarten up here, probably need to pay more attention to this.
As you mentioned, James.
Like, it's about what you want into the future, and I would like to have a really lovely retirement or.
Even if I'm not retiring.
So I do say to people one of the lessons I have from the rich list is I don't really retire. There's lots of people who could have retired very early and they don't. They found their passion and they work and all those sorts of things. So it's not necessarily about not working, but it's also working because you want to or you've got passions and those sorts of things. And being financially independent. I think that's at the core.
That's terrific and I think that's what it's all about. That's what that verticul is all about. And folks, that's what the show is all about. The money puzzle. You know, Julian was talking about advice and by the way, get advice. Of course, get advice. Here's the thing. It costs on average three to four thousand dollars a year to get financial advice in Australia, and that is, by the way, a minimum figure because the number of advisors is shrinking rapidly.
I mean there's only half the number there was ten years ago in the market. The point I'm making is that this show exists for you, and the people on this show are talking to me and talking to you through me on all aspects of investing and the listener questions we do every week. I get top advisors in to answer those questions. That's what the show is all about. It's about you and where you're going. And this article
will be very much in the same area. And I'm hoping that if you do listen to the show, come and have a look at the vertical on the Australian. It launches today. It's something that has never been tried on the Australian or across financial media, and I think it's going to be really useful. All right. I think we might leave it there, Julia, and great to have you on the show.
Okay, So I've got a laundry list here, so I need to go and fix up my super work on an investment property, probably build that share portfolio.
Look, I think maybe in the journey, maybe I'm gonna have to do you know, the juliannesparrag diaries or something like that, like things that I've just learned from starting here and being focused more on the personal side of wealth.
As you mentioned.
So we've both been financed journals for the really long period time.
You know this stuff.
But you know better than the mechanic with the broken down car. You know I've got.
The trick is to get started, isn't it. The trick is to get started, all right? Terrific. Now, folks, keep those emails rolling, love to see them. And as I said, if you're sending in a question, send in two or three at the same time. I love to see a couple of questions from the same listener. It makes a lot of sense. It's very efficient as well. The email is the money puzzle at the Australian dot com dot au talk to you soon.
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