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The career choices that matter for long term wealth · The Money Puzzle

0:10
Speaker 1: Hello, and welcome to the Australian's Money Puzzle podcast. I'm
0:13
Speaker 1: James Kirby, welcome aboard. I got something quite different in
0:17
Speaker 1: mind for you today because we talk a lot about investing,
0:22
Speaker 1: but you know, you need money to invest. And for
0:25
Speaker 1: most people, that's going to be linked with your career
0:29
Speaker 1: and your salary and the way you manage your career,
0:32
Speaker 1: you navigate your career and the choices you make. My
0:35
Speaker 1: guest today is Jackie Clark. She's an advisor. She's a
0:40
Speaker 1: confidant of some of the wealthiest families in Australia. She's
0:44
Speaker 1: on the board of the BKI Group, the Milliner Families
0:48
Speaker 1: BKI Group, and an author of the book, How to
0:52
Speaker 1: Stop Worrying About Money. How are you, Jackie?
0:54
Speaker 2: I'm great, James. Fabulous to be here with you today.
0:57
Speaker 1: Great to have you on the show again. You know,
1:00
Speaker 1: I'm just thinking back at once upon a time I managed,
1:03
Speaker 1: you know, a sizable group of journalists and we used
1:06
Speaker 1: to do these little coaching sessions with them, various things,
1:10
Speaker 1: you know, how to write, how to deal with difficult
1:12
Speaker 1: situations or whatever. Just basically go into a meeting room
1:15
Speaker 1: and have these sessions. But the one I did that
1:18
Speaker 1: I thought was most important was how to navigate your career.
1:23
Speaker 1: And because some careers have a very obvious pathway and
1:27
Speaker 1: some don't, and maybe more often than particularly now, most
1:33
Speaker 1: don't because it's so fluid. So I thought the theme
1:37
Speaker 1: that we could talk about today is this, the career
1:41
Speaker 1: choices that matter most to building long-term wealth. I've never
1:46
Speaker 1: done this on the show before. I won't say I'm
1:48
Speaker 1: skeptical about doing it, but I am cautious about doing
1:52
Speaker 1: it because it's one of those kind of rubbery areas
1:54
Speaker 1: where there may not be a lot of facts and
1:57
Speaker 1: figures and data, which we do like on the Money
1:59
Speaker 1: Puzzle podcast because we're investors. But So let's begin. I mean,
2:03
Speaker 1: where do you want to start? What do you think
2:05
Speaker 1: is the most important thing for people to know about
2:08
Speaker 1: that key issue? What's the outstanding point you wanted to
2:11
Speaker 1: make about career choices that matter most?
2:14
Speaker 2: Look, there's so many and there's probably two completely different
2:18
Speaker 2: spectrums that we can come at this from. Let's talk
2:21
Speaker 2: about here and now. And what I see is that
2:25
Speaker 2: a typical pay jump, if you like, if you change
2:28
Speaker 2: companies is generates about a 9% increase in income. Now
2:33
Speaker 2: somewhere between 5% and 10% is the statistic.
2:36
Speaker 1: That's very interesting.
2:37
Speaker 2: It's quite significant.
2:39
Speaker 1: Is it significant? Is 10% significant?
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Speaker 2: Well, you know, it depends, like you said, about career paths.
2:44
Speaker 2: So you and I have been with organisations or I
2:47
Speaker 2: had been for a long time and I chose to
2:49
Speaker 2: stay in an organisation because there was quite a clear
2:52
Speaker 2: defined career path where I could continue to rise and
2:56
Speaker 2: through the ranks and earn a greater income. It's not
2:59
Speaker 2: always that clear today, and certainly professional services has changed
3:03
Speaker 2: a lot. But if you couple that potential wage increase
3:08
Speaker 2: with something like wage growth, which is sitting around 3.2%,
3:13
Speaker 2: And we've got inflation. The last quarter's inflation result was, what, 3.6%. Yeah,
3:17
Speaker 2: which is even, Stephen.
3:18
Speaker 1: It makes no difference.
3:19
Speaker 2: Yes, but you start to say, hmm, so do I
3:22
Speaker 2: have to get the job moved to help pay the mortgage?
3:25
Speaker 2: And there's lots of trade-offs. And I think the other
3:28
Speaker 2: thing is if I've got a house full of millennials
3:31
Speaker 2: or Gen Xers, or Gen Zers, sorry, I'm the Gen Xer,
3:34
Speaker 2: but the Gen Zers who are more likely to work
3:37
Speaker 2: for themselves are more likely to have something like 20
3:40
Speaker 2: jobs in their lifetime or more. It's a completely different approach.
3:44
Speaker 2: It's almost like an experiential thing that you start somewhere,
3:48
Speaker 2: you learn a new skill, you get new opportunities, you
3:52
Speaker 2: go somewhere else for a new experience. Again, I went
3:55
Speaker 2: on a different career path, which pretty much had me
3:57
Speaker 2: just following, building skills out, but following a path to
4:02
Speaker 2: some extent. Right.
4:03
Speaker 1: I mean, in my world... People would say, oh, I've
4:06
Speaker 1: got a job offer. And invariably it was outside, right?
4:09
Speaker 1: Outside the media because it pays twice as well, particularly
4:12
Speaker 1: financial and corporate comms and that sort of thing. It
4:15
Speaker 1: would pay more, dollar for dollar, all the way back,
4:17
Speaker 1: always did. And I would always say, listen, what are
4:20
Speaker 1: you doing? What's this? You've been offered a job. Are
4:23
Speaker 1: you going to take the first job, the first person
4:24
Speaker 1: who ever rang you? Are you just going to jump
4:27
Speaker 1: and take that job? Or do you think it through?
4:29
Speaker 1: And maybe this is the listener's experience, right? It doesn't
4:33
Speaker 1: matter where they are, right? Maybe they're in a bank.
4:35
Speaker 1: Maybe they're in a building company. It doesn't matter. Same
4:39
Speaker 1: issue comes up. They say, well, I've been told the
4:43
Speaker 1: only way I can get a pay rise is to
4:44
Speaker 1: change jobs. So what's your advice to the listener in
4:48
Speaker 1: this situation?
4:50
Speaker 2: Yeah, look, not unlike you, I spent a lot of
4:52
Speaker 2: time mentoring and coaching people through the tap on the
4:55
Speaker 2: shoulder that came usually from a contact on LinkedIn. Perhaps, again,
5:01
Speaker 2: looking at trends, you know, in the 90s and early 2000s,
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Speaker 2: the job mobility was really significant. It has actually dropped
5:11
Speaker 2: quite considerably. And I think there are factors that are
5:14
Speaker 2: influencing why people aren't moving now like they used to.
5:18
Speaker 1: Oh, yes. I didn't know this, Jackie. Is this like documented?
5:21
Speaker 2: Yes, it's quite significant. It is well documented. Job mobility
5:25
Speaker 2: is quite well documented. And it's come off a cliff.
5:29
Speaker 2: And you could say that there was a bit of
5:31
Speaker 2: a jostle around COVID, which I think we can all
5:34
Speaker 2: appreciate the adapting of the work patterns. But I think
5:37
Speaker 2: what shifted again was this issue around job security. Now,
5:41
Speaker 2: you only have to open up the Australian and see,
5:44
Speaker 2: think of the big headlines, KPMG, Atlassian.
5:48
Speaker 1: Yes, the white collar.
5:49
Speaker 2: Yeah, a lot of big redundancies occurring. Is this AI?
5:54
Speaker 2: But actually... are people becoming more conservative? And I think
5:58
Speaker 2: they are. Again, coming back sort of full circle to
6:02
Speaker 2: your question, where we work is a lever that is
6:05
Speaker 2: in our control. We can't control interest rates. We can
6:08
Speaker 2: control to some extent our spending, but actually the bigger
6:12
Speaker 2: lever is our income. And so, yeah, sure, switching for
6:16
Speaker 2: a pay rise may work in your favor, but there's
6:19
Speaker 2: lots of things to take into consideration when you're doing that.
6:22
Speaker 2: And I'd ask the question, What have you done to
6:25
Speaker 2: secure a pay rise in the organisation that you're currently in?
6:28
Speaker 2: And would you be more satisfied actually having that conversation
6:33
Speaker 2: before you then make the leap?
6:35
Speaker 1: Spell them out. What are the things? And I imagine, Jackie, again,
6:39
Speaker 1: I'm guessing, but I imagine job mobility, you know, terrific
6:43
Speaker 1: in your 20s. Probably in your early 30s. And then
6:46
Speaker 1: it really starts to dry up because everyone thinks you're
6:48
Speaker 1: being paid probably more than you are. But everyone, the
6:53
Speaker 1: job offers, they thin out the higher up the chain
6:56
Speaker 1: you go. I mean, that's just mad.
6:57
Speaker 2: Yeah, they do.
6:58
Speaker 1: But tell me, what should people consider then when they
7:01
Speaker 1: are at this juncture?
7:03
Speaker 2: Yeah, and there's lots of life stages that will have
7:06
Speaker 2: you either sit, it's a bit like that reason or season,
7:08
Speaker 2: you know, stay with a job, you've got young kids,
7:10
Speaker 2: you've got childcare, you stick with your job because you've
7:13
Speaker 2: got that regular income coming in. Perhaps when kids get older,
7:16
Speaker 2: you start to think, well, I could have a bit
7:18
Speaker 2: more flexibility. Do I need to rely on that income?
7:21
Speaker 2: Is that an opportunity for me to change? So I
7:23
Speaker 2: think the other thing is just recognising not only the
7:28
Speaker 2: life changes, but do you need to develop a new skill?
7:32
Speaker 2: Are you going to grow in this job that you're in?
7:35
Speaker 2: Is there another opportunity within that business or do you
7:37
Speaker 2: need to go somewhere else? So you've got to, I mean,
7:40
Speaker 2: I think people have to do their numbers because it
7:43
Speaker 2: can feel like a safety net being an employee in
7:47
Speaker 2: a business. The minute you decide to make a move,
7:51
Speaker 2: you may interrupt your superannuation. You might have some time off.
7:55
Speaker 2: You may not have, you know, there's things like long
7:57
Speaker 2: service leave and people these days are taking things like
8:00
Speaker 2: sabbaticals when they've been with organisations for a longer time.
8:04
Speaker 2: You may lose access to those benefits if you continue
8:08
Speaker 2: to chop and change your role. So, look, there's pros
8:10
Speaker 2: and cons in it. But the big opportunity is have
8:13
Speaker 2: you asked? your current employer for a pay rise. And
8:16
Speaker 2: that's something that you need to think very carefully about.
8:19
Speaker 1: Okay. How do you do that?
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Speaker 2: Yeah. Well, apart from booking an appointment, which I think
8:24
Speaker 2: is the best thing first with the boss or the person.
8:27
Speaker 1: Who's most likely responsible.
8:28
Speaker 2: Okay.
8:29
Speaker 1: How do you do it? Tell us how you do it.
8:31
Speaker 1: So someone's listening. They're good. They have a good job.
8:34
Speaker 1: They're interested in investing. They're keen. They know they're good.
8:38
Speaker 1: How do they do it?
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Speaker 2: Well, I'd rewind. I'd say, do you know what the
8:42
Speaker 2: performance objectives are in your role? And can you document
8:45
Speaker 2: how you've met or exceeded those? So preparation is the
8:49
Speaker 2: key to success here. You book in the appointment. In
8:52
Speaker 2: the process of doing that, you give them the heads
8:54
Speaker 2: up that you're coming to talk about a pay rise. Yes.
8:57
Speaker 1: Okay. Interesting.
8:58
Speaker 2: Try and pick your timing well, like not the week
9:00
Speaker 2: after they've announced a redundancy program.
9:02
Speaker 1: Friday afternoon. Not then. Friday afternoon, three o'clock.
9:06
Speaker 2: And then you go in actually with well-documented achievements, but
9:11
Speaker 2: also do your market research. So there's a lot of
9:14
Speaker 2: publicly available information about the type of role you're in
9:17
Speaker 2: or where you're aspiring to go in terms of what
9:20
Speaker 2: what people get paid or ask your peers, find out
9:23
Speaker 2: what they're being paid.
9:24
Speaker 1: I don't know. I don't know how to tell you either.
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Speaker 2: Oh, you'd be surprised. So some organizations, I've certainly worked
9:29
Speaker 2: in them where it's been wildly talked about. I think
9:32
Speaker 2: what you find is junior people in an organization talk
9:35
Speaker 2: about it over lunch. The more senior people get, it
9:38
Speaker 2: gets kept a little bit secret. You would know from
9:41
Speaker 2: my experience being a partner at Deloitte that all of
9:43
Speaker 2: the partner income was disclosed every year to every partner.
9:47
Speaker 1: Yeah.
9:47
Speaker 2: So you knew exactly what the person in the office
9:50
Speaker 2: next to you is paying.
9:51
Speaker 1: Or ironically, if you're in the public service, it would
9:53
Speaker 1: be very similar, right?
9:54
Speaker 2: Exactly. You agree to, you agree.
9:55
Speaker 1: To, whatever.
9:56
Speaker 2: And to be honest, I think the banks are similar.
9:58
Speaker 2: You start to look around, you might find there's definitely
10:00
Speaker 2: particular levels for.
10:02
Speaker 1: It's interesting. I want to just tell the listeners the story.
10:05
Speaker 1: When I was starting as a journalist, in those days,
10:09
Speaker 1: it was marvelous because there was so little corporate comms.
10:12
Speaker 1: It was so loose. You could get to anybody. And
10:14
Speaker 1: I met the The CEO of ANZ Bank. And I
10:19
Speaker 1: sat on a park bench with him. This would not
10:22
Speaker 1: happen today, right? The CEO of ANZ Bank would not
10:25
Speaker 1: sit on a park bench with a journalist unless he
10:27
Speaker 1: had like 10 assistants. Anyway, he looked at me and
10:30
Speaker 1: he said, how much do you want? I didn't tell him.
10:33
Speaker 1: And he made a guess, you know. And I was amazed,
10:36
Speaker 1: like he was so close. You know, I can't remember
10:39
Speaker 1: what it was, but he was so close. He was
10:40
Speaker 1: like 5% off. And I remember thinking, wow, you know,
10:44
Speaker 1: now I see why this guy's the CEO of a bank. So,
10:46
Speaker 1: but as you say, perhaps at certain levels, everyone's within 10%
10:50
Speaker 1: of each other. Okay. Now, I like what you said
10:52
Speaker 1: that you document your achievements. You're clear on your objectives.
10:56
Speaker 1: You tell them that you want to pay rise. And
10:58
Speaker 1: that's what the meeting is going to be about. Now,
11:01
Speaker 1: experience suggests this often happens. The person on the other
11:06
Speaker 1: side of the desk says, yep. That's perfectly reasonable, I think.
11:09
Speaker 1: That sounds, yeah, I mean, that's justified. Absolutely, James. We'll
11:13
Speaker 1: get back to you, okay? Three months passed. Nothing's happened.
11:17
Speaker 2: No, no, no.
11:18
Speaker 1: Okay, part two, what happens? What do you do?
11:20
Speaker 2: Well, I think there's a step in the middle there,
11:22
Speaker 2: which is you don't leave that meeting without agreeing at
11:27
Speaker 2: the meeting the timing for a follow-up.
11:29
Speaker 1: Oh, I like that.
11:30
Speaker 2: Yeah, and the other thing is that you can document
11:33
Speaker 2: the conversation. So an email to recap what was covered is,
11:37
Speaker 2: in that conversation. Now, this can kind of be tranche
11:41
Speaker 2: one as well, because the other strategy that's been used
11:44
Speaker 2: with me many a times was bringing in the offer,
11:48
Speaker 2: like the counter offer, essentially, from another organisation. Now, you
11:51
Speaker 2: don't lead with that. I wouldn't necessarily lead with that.
11:54
Speaker 2: I think if you've been with an organisation for.
11:56
Speaker 1: A while, you demonstrate your performance.
12:01
Speaker 2: Yeah, because I mean, one of the biggest challenges you
12:04
Speaker 2: would imagine, you're sitting in a job you're working away,
12:07
Speaker 2: the guy comes in, the new guy arrives and he's
12:09
Speaker 2: being paid 10% more than you, which I saw that
12:12
Speaker 2: every day. And that's that typical pay bump that we
12:16
Speaker 2: were talking about. It still occurs, but perhaps less so
12:19
Speaker 2: now because less people are moving.
12:21
Speaker 1: I like that. This is good. This is good.
12:25
Speaker 2: Okay.
12:25
Speaker 1: Now, I've got another one for you. The person at
12:29
Speaker 1: the other end of the table says, That's very reasonable,
12:32
Speaker 1: absolutely justified. I'll tell you what, yeah, we can't do
12:35
Speaker 1: it at the moment, you know, because the budget is
12:36
Speaker 1: so tight. It's an annual cycle. We do all the
12:38
Speaker 1: pay rises in August. So you're going to have to
12:40
Speaker 1: wait six months. What do you say to that?
12:42
Speaker 2: That's a great question. And I have had to say
12:46
Speaker 2: that many times. And all that you can do in
12:50
Speaker 2: that situation is either accept it or go seek an alternative,
12:54
Speaker 2: which is then the contra, which is an offer from
12:57
Speaker 2: another organisation where you put them on the table and
12:59
Speaker 2: you say, yeah, I love working here, but here's another offer.
13:03
Speaker 2: It's very compelling. I've got a mortgage to pay. I'm
13:05
Speaker 2: raising a family. Cost of living is going up. I'm
13:08
Speaker 2: going to have to take this, but I really like
13:09
Speaker 2: working with you and I think I can achieve great
13:12
Speaker 2: things here with you. You've got to put it back
13:15
Speaker 2: on them, but you might have to go away and
13:16
Speaker 2: do your research and then come back again.
13:18
Speaker 1: Okay. And one last one. What was the other twist
13:21
Speaker 1: I was going to put to you, which comes up
13:23
Speaker 1: all the time about pay rises?
13:26
Speaker 2: Oh, yes.
13:27
Speaker 1: So you go in and you say, You've had it, right?
13:31
Speaker 1: You've had it because you didn't get the pay rise.
13:34
Speaker 1: And you go in and you say, look, I'm sorry.
13:36
Speaker 1: I don't want to leave, but I'm leaving because our
13:39
Speaker 1: travel has offered me, pick a number, okay, 12% more.
13:43
Speaker 1: And they say, I'm so sorry. Actually, we really want
13:48
Speaker 1: you to stay and we will match that 12%. This
13:52
Speaker 1: happens all the time. Again, what do you do there?
13:56
Speaker 2: Well, it depends. I'm often thinking about that in the
13:59
Speaker 2: boss seat. So it's a tough, it's not nice to
14:04
Speaker 2: be valued when you're walking out. It's not, I don't
14:06
Speaker 2: know that that's a nice feeling if you're being valued
14:08
Speaker 2: when you're walking out the door. Yeah.
14:10
Speaker 1: And Jackie, I mean, I always say to people who
14:12
Speaker 1: say that to me, they say, just go.
14:15
Speaker 2: Yes.
14:15
Speaker 1: In your mind, you're gone. You've left.
14:17
Speaker 2: But what do you think? The other thing is painting
14:20
Speaker 2: the picture around what the opportunity really does look like
14:22
Speaker 2: in this organisation. So if you stick with me, here's
14:27
Speaker 2: what I think could happen. And I've been in those
14:29
Speaker 2: situations with people where I can recognize that the potential
14:32
Speaker 2: or the likely pay rise is coming with this promotion
14:35
Speaker 2: that I think is going to happen at this point
14:37
Speaker 2: in time. And I can paint the picture about what
14:39
Speaker 2: it looks like. And you can kind of trade that off.
14:41
Speaker 2: You can say, hey, another 12 months or six months,
14:44
Speaker 2: whatever that time is, I think this is what can
14:46
Speaker 2: be achieved here. I can't promise it to you. And
14:49
Speaker 2: so in the receiving end of that, you've either got
14:51
Speaker 2: to say, do I stay the course here or do
14:54
Speaker 2: I you know, drop out, you know, step out and
14:58
Speaker 2: rebuild again, which is what you've got to face. It's
15:01
Speaker 2: someone who may have your back in a particular role
15:03
Speaker 2: versus somebody who's got to, you've got to rebuild that
15:06
Speaker 2: relationship with and that trust with.
15:08
Speaker 1: Okay. Now let's go back to the theme, the career
15:11
Speaker 1: choices that matter most to building long-term wealth. What else
15:15
Speaker 1: don't I know? We've just talked about the one everyone
15:18
Speaker 1: wants to know. How do I get a pay rise?
15:19
Speaker 2: Okay.
15:19
Speaker 1: But there's a hell of a lot more than that, folks. Okay.
15:22
Speaker 1: Just pick up where you'd like to move next on
15:24
Speaker 1: this issue.
15:25
Speaker 2: Look, It's a significant lever where you work. It's a
15:29
Speaker 2: significant lever in the context of your network in terms
15:34
Speaker 2: of most of the decisions you'll make in your life.
15:36
Speaker 2: I think about the experiences, the opportunities, the alumni.
15:39
Speaker 1: Oh, yes, of course.
15:41
Speaker 2: You know, so it may feel like this, and I've
15:43
Speaker 2: definitely been in that bubble in an organisation, but the
15:47
Speaker 2: other trajectory that exists potentially is what else is out
15:51
Speaker 2: there and how are you valuing that in this job
15:54
Speaker 2: or the next job? So I think we often talk
15:57
Speaker 2: about cost-cutting. We talk about Uber Eats, avocado toast, Netflix subscriptions,
16:03
Speaker 2: all those things, but they are minutiae compared to what
16:07
Speaker 2: your income levers are.
16:09
Speaker 1: I completely agree with you.
16:11
Speaker 2: It's a very strategic decision, but people can get lost
16:14
Speaker 2: in the way and you have to do your numbers, James.
16:18
Speaker 2: I think that's the most important thing, recognising what the
16:21
Speaker 2: transition time, what it's going to take. what it's going
16:24
Speaker 2: to take to build trust in a new organization. Do
16:28
Speaker 2: you have that in you? You know, you might be
16:30
Speaker 2: on a good thing. You might have people who recognize
16:32
Speaker 2: and trust you here. Is it worth, you know, that
16:35
Speaker 2: delta in pay for a period of time? So just
16:38
Speaker 2: having a plan, I think it's reasonable to say, yes,
16:41
Speaker 2: if I can get that pay rise in this organization,
16:44
Speaker 2: maybe a little bit later, but I'm happy with everything
16:46
Speaker 2: else about it. Do you stay? Or do you go and, again,
16:50
Speaker 2: just recognise what the trade-offs are? And there can be
16:53
Speaker 2: so many.
16:53
Speaker 1: What about where if someone says, you're in, we'll give
16:59
Speaker 1: you a pair of eyes in the next cycle, but
17:00
Speaker 1: it's not for three months. What about benefits in kind
17:05
Speaker 1: where you say, well, I want whatever, a corner office,
17:08
Speaker 1: a car park, whatever?
17:09
Speaker 2: Yeah, it's another great trade-off. So one of the things
17:12
Speaker 2: we used to offer was the title, not the money. Oh, yeah. Yeah.
17:18
Speaker 2: Which you can appreciate in professional services, people would go
17:21
Speaker 2: for that because they could see the future value of
17:25
Speaker 2: that title in the market as they saw it is
17:28
Speaker 2: quite powerful and that's like the difference between a partner
17:31
Speaker 2: and a director or a director and a manager or
17:33
Speaker 2: a manager and an analyst that sometimes we would offer
17:36
Speaker 2: the title and ego is a factor.
17:38
Speaker 1: Sure.
17:39
Speaker 2: So if you offered the title, can you sort of
17:42
Speaker 2: build that your pathway, that personal growth that you're aiming
17:46
Speaker 2: to get in this organization, can you build it around
17:48
Speaker 2: the title and not the money initially and know that
17:51
Speaker 2: with the title, the money will come? So it's a trade-off.
17:56
Speaker 1: I like that. Where does work from home sit from this? Again,
18:01
Speaker 1: bias my side perhaps. I feel, and that's a word
18:06
Speaker 1: I don't use very often on the show, but I
18:07
Speaker 1: don't have any doubt to back it up. I feel
18:10
Speaker 1: if you work from home, You miss the potential opportunities
18:18
Speaker 1: that will arise. It's not that you are doing anything wrong.
18:21
Speaker 1: It's what you're going to miss, the random encounters and corridors.
18:25
Speaker 1: What do you think? Am I way off on that?
18:29
Speaker 1: Because my adult children completely disagree with me, for instance.
18:33
Speaker 2: Yeah, and look, my adult children might completely disagree with
18:36
Speaker 2: me too. No. I agree that being present in an
18:41
Speaker 2: office gives you a step up in terms of demonstrating commitment,
18:47
Speaker 2: which may be a bit of an old school metric
18:50
Speaker 2: as well. Like being present is a bit of an
18:52
Speaker 2: old school metric. But the face-to-face value that you get,
18:56
Speaker 2: and you would know even us having this conversation today,
18:59
Speaker 2: doing it like this, if we're sitting in a room,
19:02
Speaker 2: we pick up so much more than we do on
19:05
Speaker 2: a video recording, for example. I think a blended approach
19:10
Speaker 2: makes sense. I'm someone who's raised a family, lots of kids,
19:14
Speaker 2: lots of activity. I would have appreciated a bit more
19:17
Speaker 2: work from home in my earlier days of my career
19:19
Speaker 2: when it really, I was kind of a trailblazer having
19:22
Speaker 2: one day working from home. Yeah, right. You know, a
19:25
Speaker 2: week and even then it was really just not okay.
19:28
Speaker 2: So I do think a blend of it's important, but
19:30
Speaker 2: I think there's two sides. I had a son who
19:33
Speaker 2: was working with a consulting organisation as a graduate and
19:36
Speaker 2: had no days in the office. And I would consider
19:41
Speaker 2: that his learning development was really significant, all the stuff
19:44
Speaker 2: that was done online. It was pretty impressive. The volume
19:47
Speaker 2: of work that they got through was impressive. But how
19:50
Speaker 2: do you then deal with people and how do you
19:52
Speaker 2: network later in life if you haven't built that skill
19:55
Speaker 2: it's no different talking to parents now whose kids went
19:58
Speaker 2: through that critical development age when we were in the
20:01
Speaker 2: middle of covid where they actually they actually don't know
20:03
Speaker 2: how to interact with humans They've missed that. That's a
20:07
Speaker 2: really serious issue. They've missed that.
20:09
Speaker 1: Absolutely. It sounds like a small thing, but it's such
20:12
Speaker 1: a big thing.
20:13
Speaker 2: It is.
20:14
Speaker 1: To go and meet people, it doesn't matter. You go
20:17
Speaker 1: to the most boring thing you can imagine. I don't know.
20:20
Speaker 1: Pick the dentist's monthly drinks, right? Okay, whatever. The point
20:27
Speaker 1: I'm making is you meet someone, you meet 10 people.
20:30
Speaker 1: It seems like nothing at the time. But here's the thing.
20:35
Speaker 1: Two years later, someone like you is at the other
20:39
Speaker 1: side of the table and they're making the final decision
20:41
Speaker 1: on who they give a job to. There are three people.
20:44
Speaker 1: There are three candidates. Maybe there's two candidates. The thing is,
20:48
Speaker 1: they know one and they don't know the other one.
20:51
Speaker 1: And they are identical in their scores. Any scores you
20:54
Speaker 1: want to take. Intellectual scores, straight academic scores, personality, Myers-Briggs.
21:01
Speaker 1: It doesn't matter. The thing is, You know one and
21:05
Speaker 1: you don't know the other. And when you're hiring, you're thinking,
21:08
Speaker 1: this person, will they be okay out there with all
21:11
Speaker 1: the others? You're thinking that and do not underestimate that.
21:15
Speaker 1: I mean, is that something that's overestimated or underestimated?
21:19
Speaker 2: Well, I think it's really, that's a hard question actually.
21:23
Speaker 2: I think the impact of that is significant. But what
21:28
Speaker 2: position are you in if you've got candidates with a
21:31
Speaker 2: similar position That's the right word. In terms of their
21:34
Speaker 2: commitment or experience to being in person, that might differ
21:40
Speaker 2: for the outcomes your organization achieves with them. It'll change
21:44
Speaker 2: their experience too.
21:46
Speaker 1: Yes.
21:47
Speaker 2: So even thinking about the brand of an organization, when
21:50
Speaker 2: somebody has the opportunity to be present with the brand
21:53
Speaker 2: or be online with the brand in their home office.
21:55
Speaker 2: It's quite different. I know the feeling. I work from home,
21:59
Speaker 2: so I understand. I go to the city for board meetings,
22:02
Speaker 2: for example, and I come home from the city bouncing
22:06
Speaker 2: and with energy from the, okay, I'm a person who
22:09
Speaker 2: gets energy from people, but I think there's a genuine
22:13
Speaker 2: element that the human interaction piece plays in how we
22:19
Speaker 2: evolve as a species and as humans. We need that.
22:22
Speaker 2: It's like talking about having girlfriends who are these bot
22:24
Speaker 2: agents that Grox created. And I was listening to a
22:28
Speaker 2: podcast the other day saying, you know, but we can't
22:31
Speaker 2: feel them or hug them or receive a hug from
22:34
Speaker 2: them which sort of goes great to a point, but
22:37
Speaker 2: actually being able to talk with people and see all
22:41
Speaker 2: of the body language and that interaction is something quite special.
22:45
Speaker 2: That's right.
22:45
Speaker 1: You can't assume that they're all the same because they're not.
22:47
Speaker 2: But I'm definitely in support of blended working from home,
22:51
Speaker 2: but I think we all need to have a presence
22:53
Speaker 2: in an office at some point.
22:55
Speaker 1: Okay, okay, very good. Now what we're going to do
22:57
Speaker 1: in the next segment, folks, is we're going to catch
22:58
Speaker 1: what we've got here and we're going to move it
23:00
Speaker 1: into financial usefulness for you. We're going to look at,
23:04
Speaker 1: for instance, in terms of these career choices, in terms
23:07
Speaker 1: of salary or set salary, how you can, on the
23:10
Speaker 1: same salary, for instance, do very important things about how
23:13
Speaker 1: you might buy a home, how you might buy an
23:15
Speaker 1: investment property, how if you're a late starter and highly
23:19
Speaker 1: qualified people are late starters financially, how you can catch up,
23:22
Speaker 1: for instance. That's a very important part of this. Back
23:25
Speaker 1: in a moment. Hello, welcome back to the Australian's Money
23:38
Speaker 1: Puzzle podcast. James Kirby here with Jackie Clark, author and advisor. Folks,
23:44
Speaker 1: we talked in the first part about what everyone wants
23:48
Speaker 1: to know, right? How do you ask for pay rise?
23:50
Speaker 1: How do you manage that? And some broader issues around
23:54
Speaker 1: career navigation. Now, what we want to do is parlay
23:58
Speaker 1: that into financial advice. We don't give advice on the show,
24:02
Speaker 1: financial information, but some advice for you on lifestyle and
24:07
Speaker 1: how to approach things. I'll start with a story. I
24:10
Speaker 1: was at a party a year or two ago, and
24:15
Speaker 1: I met a woman I know who was a company director.
24:19
Speaker 1: And she introduced her husband, who was a plastic surgeon.
24:23
Speaker 1: And like many people, I'm sure I bored this guy
24:27
Speaker 1: by saying, oh, yes, well, you know what I do,
24:30
Speaker 1: and I'm sure you're going very well. You're a plastic
24:32
Speaker 1: surgeon after all. And he didn't say anything, but she
24:35
Speaker 1: jumped in and said, listen, you know, I'll give him
24:39
Speaker 1: a false name, Jack. Jack is years away from making anything.
24:44
Speaker 1: He did the long road to a GP. Then he
24:47
Speaker 1: was out in the field as a GP. Then he specialized,
24:50
Speaker 1: you know, and I think they were in, I'd say
24:52
Speaker 1: this guy was 33, 34. And she was making the
24:56
Speaker 1: point that he really hadn't made much. He was going
25:00
Speaker 1: to once he qualified as plastic surgeon. surgeon. He was off, obviously,
25:06
Speaker 1: especially when he went into private practice. But she had
25:09
Speaker 1: obviously carried the can until that point. And it struck
25:13
Speaker 1: me that many people in highly specialized fields, they are
25:19
Speaker 1: late starters financially. I mean, everyone does everything later. Now
25:22
Speaker 1: they go to school later, they go to university later,
25:24
Speaker 1: they qualify later. They're encouraged by the universities to drift
25:28
Speaker 1: and mess around and change courses. So by the time
25:31
Speaker 1: they They emerged with their highly qualified, highly lucrative career.
25:36
Speaker 1: They could be 32, 3. It's damn late to start financially,
25:41
Speaker 1: isn't it? Tell us what you think about that and
25:44
Speaker 1: what people listening to the show who know they're in
25:48
Speaker 1: that boat should do.
25:51
Speaker 2: Well, if I can caveat this by saying that our
25:55
Speaker 2: government has delivered quite a blow to the aspiring wealthy
25:59
Speaker 2: in our country.
26:01
Speaker 1: What are you going to tell me? Negative gearing?
26:03
Speaker 2: Yeah, they've eliminated that. And I think it makes it
26:06
Speaker 2: very difficult. So when you think of the context of
26:10
Speaker 2: buying your first home, so we know our home that
26:14
Speaker 2: we own is still free from capital gains tax, which
26:17
Speaker 2: is excellent. But if you wanted to get into the
26:20
Speaker 2: property market and it wasn't the thing that looked like
26:22
Speaker 2: your first home, how do you go about that? And again,
26:26
Speaker 2: that's a real challenge. So thinking about a strategy such
26:30
Speaker 2: as buying a small investment property, something that's well within
26:34
Speaker 2: your budget but gets you into the market. Could you
26:37
Speaker 2: live in something like that for the first six months
26:40
Speaker 2: to establish your main residence, for example? And we know
26:43
Speaker 2: we've got six years to go back to it. If
26:45
Speaker 2: you've only got one, then you can start somewhere. So
26:49
Speaker 2: there is that option and then you can by all
26:51
Speaker 2: means go and rent somewhere else or still be at
26:53
Speaker 2: home depending on what your circumstances are. And these days
26:56
Speaker 2: what the average age for leaving home is about 30-something
27:00
Speaker 2: for men in Australia. Pretty scary.
27:03
Speaker 1: I just find that unbelievable. I assume you're correct. Okay,
27:08
Speaker 1: so look, just to spell this out, traditionally what advisors
27:12
Speaker 1: used to say to late starters was buy your first home,
27:16
Speaker 1: upgrade it, Buy your second home, your forever home, but
27:21
Speaker 1: don't sell your first one because you know you're going
27:23
Speaker 1: to get a big uptick in salary and you can
27:26
Speaker 1: turn it into an investment property. Can't do that anymore, right?
27:29
Speaker 1: Unless they bought a new house.
27:31
Speaker 2: Well, you can if you get your timing right. I mean,
27:35
Speaker 2: there's essentially a timeline. There's a clock ticking on everything
27:38
Speaker 2: and that's something we're a lot more mindful of now
27:40
Speaker 2: and we have to make sure we get valuations when
27:42
Speaker 2: those circumstances change. So if I was following that, you
27:47
Speaker 2: were saying you buy into the market with one property
27:49
Speaker 2: as your first home, you would move in for six months,
27:52
Speaker 2: establish that as your main residence to obtain the exemption.
27:55
Speaker 2: You could go and rent somewhere else and collect rent
27:57
Speaker 2: on that property after that. When you start to build
28:00
Speaker 2: more equity, you could potentially buy your next place. That again,
28:05
Speaker 2: that really now is can you positively gear that investment?
28:09
Speaker 1: Yeah, it's very hard to positively gear with six percent
28:12
Speaker 1: rates and three percent yields.
28:14
Speaker 2: Exactly.
28:15
Speaker 1: So what do you suggest? What's the least worst option now?
28:19
Speaker 2: Buying a home is the least worst option because of
28:22
Speaker 2: the capital gains tax exemption on the main residence. Yeah.
28:27
Speaker 1: Okay. So try and buy your home as early as
28:30
Speaker 1: you possibly can.
28:31
Speaker 2: Yeah. And I think trading through homes is okay too,
28:35
Speaker 2: but recognising there are costs like stamp duty to those trades.
28:39
Speaker 1: Yes, yeah.
28:39
Speaker 2: So buy this residence as your main residence now You
28:42
Speaker 2: could sell it when you buy the next one. You'll
28:45
Speaker 2: have that as tax-free, but you will have duty going
28:48
Speaker 2: into the next one and so on.
28:49
Speaker 1: Okay. All right. Now, here's something we didn't mention in
28:53
Speaker 1: the first half, but it's a really interesting one, which
28:55
Speaker 1: is instead of asking for a pay rise, you say, goodbye,
29:00
Speaker 1: I'm out. I'm out of all the games. I'm out
29:02
Speaker 1: of all the meetings I'm not listening to. I'm out
29:04
Speaker 1: of all the nonsense and filling out forms. I'm jumping out.
29:07
Speaker 1: I'm going to start my own business. Tell us about
29:09
Speaker 1: that as a career in terms of our initial theme,
29:13
Speaker 1: career choices that help you build wealth. What does that do?
29:17
Speaker 1: You tell me, what does it do? Does it raise
29:21
Speaker 1: or drop your chances of building wealth?
29:24
Speaker 2: I would say it could be neutral. It could enhance
29:27
Speaker 2: your chances of building wealth. It needs planning. We can
29:31
Speaker 2: talk about the structures for that, but actually maybe a
29:34
Speaker 2: little bit of your safety net goes when you move
29:37
Speaker 2: away from a job that has that regular income. That's
29:39
Speaker 2: why I think that step needs planning. The other thing
29:43
Speaker 2: that's really powerful is recognising that alumni network where you are,
29:46
Speaker 2: because some of those people have left and maybe done
29:49
Speaker 2: what you're contemplating doing as well. So it's great to
29:52
Speaker 2: reach out to people and find out what's their experience
29:54
Speaker 2: been like, but it really is a little bit like
29:57
Speaker 2: the rug being pulled out from under you. Because a
30:00
Speaker 2: lot of the things that you might be used to,
30:02
Speaker 2: any support like IT support. I know, that's a huge one.
30:09
Speaker 2: And you have to do everything yourself. So you've got
30:10
Speaker 2: to be prepared. I used to do a lot of
30:11
Speaker 2: coaching for people taking that transition. So recognizing how good
30:15
Speaker 2: they were with things like record keeping, accounting, you know,
30:19
Speaker 2: self starters who are prepared to be that sort of
30:22
Speaker 2: complete executive, not just, you Let's talk about bots and AI,
30:28
Speaker 2: but not just being good about the tax advice, not
30:32
Speaker 2: just being good at writing the article, actually being that
30:35
Speaker 2: whole or complete executive where you can kind of do
30:38
Speaker 2: all the jobs. You've got to be HR, IT, finance, strategy.
30:42
Speaker 1: You do in the first year or two.
30:44
Speaker 2: You do.
30:44
Speaker 1: What's the biggest problem you hit with the specialist? It
30:48
Speaker 1: doesn't matter what they are. They're really good at something.
30:51
Speaker 1: Went out to start a business to be really good
30:53
Speaker 1: at that thing. What was the biggest problem you came upon?
30:56
Speaker 2: The gap I see often is that people don't have
30:58
Speaker 2: the skills around cash flow and cash flow management. So
31:02
Speaker 2: the biggest gap and 99% of the time and the
31:05
Speaker 2: same reason why such a large percentage of businesses fail
31:08
Speaker 2: so quickly is that somebody's not watching the cash. So
31:11
Speaker 2: you might be really good at what you're doing. Are
31:13
Speaker 2: you pricing it well and appropriately and are you collecting
31:17
Speaker 2: the cash on a regular basis? When I say cash,
31:19
Speaker 2: the the invoices so actually that business management part of
31:22
Speaker 2: the business is really hard and you can be you
31:26
Speaker 2: can be a brilliant creative person you can be a
31:28
Speaker 2: brilliant technical person but you might not like that business
31:32
Speaker 2: management thing and that's the bit that's why businesses fail
31:35
Speaker 2: yes Yeah. And that's why I talk about, you've heard
31:38
Speaker 2: me go on about the personal finance village, having people
31:41
Speaker 2: around you. It's no different if you're in a big corporate,
31:44
Speaker 2: if you've got a development area, you work with people
31:47
Speaker 2: that support you around your strengths. It's the same in business.
31:50
Speaker 2: If that's a gap or a weakness, who can you
31:53
Speaker 2: bring in to support you to run that business? And
31:56
Speaker 2: you know, sure, in a startup, it's very lean. You're
31:59
Speaker 2: running on air, usually in a whole lot of adrenaline
32:02
Speaker 2: and But you do need to recognize that that hygiene
32:05
Speaker 2: around a business is so critical to success.
32:08
Speaker 1: Absolutely. Just in terms of people who start conventional businesses,
32:13
Speaker 1: it's not super risky, right? So the accountant who starts
32:17
Speaker 1: their own practice or whatever, the tax advisor who starts
32:19
Speaker 1: their own practice, this has been going on for a
32:21
Speaker 1: thousand years. So could you talk us through a little
32:23
Speaker 1: bit about the financial, in terms of like that career
32:27
Speaker 1: choice and long-term wealth, the big opportunity of SMSFs. Could
32:32
Speaker 1: you just explain to people what it is for people
32:36
Speaker 1: who have their own business, even white collar businesses where
32:38
Speaker 1: you just need an office? Yes.
32:40
Speaker 2: I mean, it's certainly an option that you could buy
32:43
Speaker 2: your office or your business premises in your superannuation fund. Yeah.
32:47
Speaker 2: So that's interesting from a structuring point of view. And
32:49
Speaker 2: I would assume this is somebody who's sort of progressed
32:51
Speaker 2: along in their career, because if you were in your
32:54
Speaker 2: 30s contemplating buying your office in your super fund, you'd
32:58
Speaker 2: want to think really carefully about all of this capital
33:02
Speaker 2: being used in a property that you may or may
33:05
Speaker 2: not operate out of in years to come. It might
33:07
Speaker 2: be small, it might become really big, you might sell,
33:11
Speaker 2: your money will obviously be trapped in the super fund
33:13
Speaker 2: for a really long time. So it is an option though,
33:16
Speaker 2: but perhaps there's some things you want to think about.
33:19
Speaker 2: So business real property has a lot of sort of
33:21
Speaker 2: nice exemptions around the superannuation rule. So it is an
33:24
Speaker 2: option to have it in there. you have to lease
33:27
Speaker 2: it back to your business at a market rate and
33:30
Speaker 2: you have to prove that market rate every year because
33:33
Speaker 2: your self-managed fund has to be audited and there's rules
33:35
Speaker 2: that they need to comply with. So, I think being
33:38
Speaker 2: really aware of the long-term commitment you're taking in that regard.
33:42
Speaker 2: There are limited recourse borrowing arrangements that are still available,
33:46
Speaker 2: but it can't be a negative gearing scenario. It's still
33:48
Speaker 2: going to be positively geared in the super fund as well. So,
33:52
Speaker 2: It's definitely an option worth considering.
33:54
Speaker 1: It's like an extra benefit of starting a business, isn't it?
33:57
Speaker 1: So just to put it simply, I mean, I'm sure
33:59
Speaker 1: most listeners know, but how it works is you can
34:03
Speaker 1: start your own super fund and then the office that
34:06
Speaker 1: you use or the shed that you use or the
34:08
Speaker 1: factory that you use, that can be owned by your
34:11
Speaker 1: super fund and it can pay rent to your super fund.
34:15
Speaker 1: So you pay rent to your super fund rather than
34:17
Speaker 1: someone else. It's a beautiful thing. And it works for
34:21
Speaker 1: many people. And in fact, originally, it was the main
34:23
Speaker 1: reason that people had SMSFs. These days, it's gone beyond that.
34:26
Speaker 1: But it really was the core reason. You were saying
34:29
Speaker 1: something about having to sell and that you're stuck in
34:31
Speaker 1: your super forever. Yeah, you can't get it out of
34:34
Speaker 1: your super. Okay.
34:35
Speaker 2: No, but you can sell. You can. And obviously, the
34:39
Speaker 2: tax rate can be lower. So there's a lot of
34:41
Speaker 2: advantages to that. Again, it's a transaction cost we were
34:44
Speaker 2: talking about. Stamp duty is still the same thing. The
34:47
Speaker 2: difficulty is that you can't access that cash. But you
34:50
Speaker 2: can do invest elsewhere. Yeah. And if going on a
34:54
Speaker 2: five or 10 year journey, it could be a bigger
34:56
Speaker 2: commercial building that you buy in the super fund. If
34:59
Speaker 2: you've been able to contribute some more non-concessional contributions to
35:02
Speaker 2: really top that up. Right. Going in there, there's lots
35:05
Speaker 2: of things that you can certainly enhance that with. So
35:08
Speaker 2: it's a nice safe place to put an office.
35:11
Speaker 1: And what about just jumping way down the line for
35:13
Speaker 1: people who do start and have their own practice in
35:16
Speaker 1: anything or their own business?
35:18
Speaker 2: Yes.
35:18
Speaker 1: Succession, how they sell the business, how many years before
35:21
Speaker 1: they pack it in do you think they should be
35:23
Speaker 1: planning to sell the business and how do they do it?
35:27
Speaker 2: Yeah, that's a really good question. I would have thought
35:30
Speaker 2: a five-year horizon would be the shortest amount of time
35:33
Speaker 2: I'd be looking at to exit. Some people start businesses
35:37
Speaker 2: with the intention that they're going to exit, as you
35:39
Speaker 2: would well know, particularly in the startup space. A company
35:42
Speaker 2: that these days is going to be the most likely
35:46
Speaker 2: vehicle that you're going to operate out of. Trusts are
35:50
Speaker 2: becoming almost irrelevant from a structuring point of view. If
35:55
Speaker 2: you're a sole trader, you might start off first on
35:58
Speaker 2: your own until you build revenue up past simple things
36:01
Speaker 2: like the GST threshold. But then transitioning to a corporation
36:05
Speaker 2: might be the wisest way for you to operate. It's
36:08
Speaker 2: what's most widely recognized. It's the kind of thing people
36:11
Speaker 2: are interested in doing due diligence on down the track.
36:14
Speaker 2: But you do need to prepare to exit. A lot
36:17
Speaker 2: of people can operate very successful businesses multi-generationally, but not
36:22
Speaker 2: actually be prepared to exit. And when you're preparing for exit,
36:25
Speaker 2: it's a different ballgame. And I work with a lot
36:27
Speaker 2: of businesses who are wanting to exit, but not actually
36:30
Speaker 2: changing what they're doing to exit. Yes. That's like a
36:34
Speaker 2: whole other podcast. Yeah. If people have interest, it's a
36:38
Speaker 2: great one to chat about.
36:39
Speaker 1: The successful exit, gee, I mean, you can work for
36:41
Speaker 1: many years and get it wrong. And you can work
36:45
Speaker 1: in a mediocre way but do a brilliant exit.
36:48
Speaker 2: Actually, one thing, because you would hate it if I
36:51
Speaker 2: didn't say this, the one thing is getting advice about
36:53
Speaker 2: that structure early on. So when you're going down this path,
36:56
Speaker 2: even if you don't think you're going to exit in
36:58
Speaker 2: five years, but knowing that you've got a right structure
37:00
Speaker 2: that you can exit from tax effectively and that is
37:04
Speaker 2: appealing to a buyer is important. So getting that advice
37:07
Speaker 2: up front.
37:08
Speaker 1: Keep that in mind, folks. Okay, we're going to take
37:10
Speaker 1: a short break and we have one or two questions
37:11
Speaker 1: for Jackie. We'll be back in a second. Hello, welcome
37:19
Speaker 1: back to the Australian's Money Puzzle podcast. James Kirby and
37:22
Speaker 1: Jackie Tarp talking here. about careers, about the career choices
37:27
Speaker 1: that matter most to long-term wealth. Now, we've talked a
37:30
Speaker 1: little bit about pay rises, property and homes, possibilities of
37:37
Speaker 1: starting late, what you can do starting late. Two things
37:41
Speaker 1: I wanted to go back on, Jackie, in terms of
37:43
Speaker 1: starting late, which most people do, apart from the idea
37:46
Speaker 1: of buying the home early, was there anything else they
37:48
Speaker 1: can catch up.
37:49
Speaker 2: On I'm always talking to people about a savings plan, James.
37:53
Speaker 2: It sounds silly, but I think the looser you get
37:57
Speaker 2: around navigating sort of discipline when it comes to your spending.
38:01
Speaker 2: So I would think carefully about financial goals, thinking about
38:06
Speaker 2: where we actually wanted to get to and then work
38:08
Speaker 2: out what the steps are. And if that means kind
38:10
Speaker 2: of curbing some of your expenditure, that may work. maybe
38:14
Speaker 2: one of the things that you could do to certainly
38:16
Speaker 2: support yourself. The other thing is taking on another job
38:18
Speaker 2: or looking at that career path that is offered in
38:21
Speaker 2: the area that you've chosen and deciding whether that's going
38:23
Speaker 2: to get you to where you're hoping to be in five,
38:27
Speaker 2: in 20 years time.
38:28
Speaker 1: And that saving, is it outside super?
38:31
Speaker 2: Oh yes, absolutely. I think super is for all of
38:34
Speaker 2: us right now. Super is the only strategy that seems
38:38
Speaker 2: to be making sense whilst the government leaves it alone.
38:41
Speaker 2: That should form part of your strategy, definitely. And I
38:44
Speaker 2: would say if you can't maximize super in every way
38:49
Speaker 2: that's available to you, that's concessional and non-concessional contributions as
38:53
Speaker 2: the starting point.
38:54
Speaker 1: And the other point I wanted to cover back on
38:57
Speaker 1: the startups was what if the person, and this probably
39:00
Speaker 1: happens more often, the person gets a job offer Well,
39:06
Speaker 1: it's not that they're in Corporation A and they have
39:09
Speaker 1: an offer from Corporation B. They're in NAB and they
39:11
Speaker 1: have an offer from Westpac. They have an offer from
39:15
Speaker 1: a startup, and that startup already exists.
39:19
Speaker 2: So you're thinking about sweat equity as well? I mean,
39:22
Speaker 2: one of the things that you have to recognize there
39:26
Speaker 2: is at this time in your life, is this potential
39:31
Speaker 2: step back in remuneration for a potential bigger prize, a
39:35
Speaker 2: risk you're prepared to take? Yeah. Yeah. And look, I
39:40
Speaker 2: would see this happen every other day and you just
39:42
Speaker 2: have to call it. And it will largely depend on
39:45
Speaker 2: what type of mortgage you've got. If you've got a
39:47
Speaker 2: spouse who can support the household costs so that you
39:51
Speaker 2: can potentially go on this path. I don't know what
39:54
Speaker 2: the success rate is. I'd love to see a statistic
39:57
Speaker 2: on how many people go down that path and take
40:00
Speaker 2: the sweat equity option and actually don't end up being
40:03
Speaker 2: delivered to. I find in a lot of these organizations,
40:06
Speaker 2: people get watered down. So the value that they think
40:10
Speaker 2: they're going to is attributed to them gets watered down
40:13
Speaker 2: a lot. If you had been at Canva back in
40:16
Speaker 2: the day, it might have been okay, but there's not
40:19
Speaker 2: you know, enough unicorns to support the amount of people
40:22
Speaker 2: that would be taking that.
40:23
Speaker 1: No, and the majority of small businesses fail. It doesn't
40:25
Speaker 1: matter how fashionable they are. Exactly. What do you think
40:30
Speaker 1: of the principle someone said to me one time, which
40:32
Speaker 1: is if you're going to join a startup, go for it,
40:34
Speaker 1: do everything, make sure you get some equity, of course.
40:37
Speaker 1: But one thing, don't work for less than you're on
40:40
Speaker 1: because it might be all you ever get from that startup.
40:43
Speaker 2: I think that's fair advice. The challenge is finding one
40:45
Speaker 2: that's going to pay you that.
40:47
Speaker 1: Yeah.
40:48
Speaker 2: Just like because it's a startup, hey, they've got money. Yeah, exactly.
40:51
Speaker 2: And unless they're already at a funding level where they've
40:54
Speaker 2: got money coming in, it's unlikely that they can do it.
40:57
Speaker 2: I had someone recently tell me they picked up a
41:00
Speaker 2: very senior executive in a family business for quite a
41:03
Speaker 2: discount and that senior executive took that role for the
41:06
Speaker 2: experience and probably to have that company name on their CV.
41:10
Speaker 1: Yes.
41:10
Speaker 2: And that senior executive said, I'm going to prove that
41:13
Speaker 2: I'm worth that much. And you'll be paying me that.
41:16
Speaker 2: And the family's thinking, no, we probably won't. But being
41:20
Speaker 2: aware that the capacity may never be there for that organisation.
41:24
Speaker 2: So is it worth the experience that you're collecting and
41:28
Speaker 2: their name on your CV? It might be. You know
41:31
Speaker 2: how some things are priceless or they have a value
41:33
Speaker 2: that we can't just look at our bank account.
41:36
Speaker 1: I suppose the younger you are, the better. If you're 25,
41:40
Speaker 1: you can take risks like that.
41:41
Speaker 2: Yeah, you think about businesses. We say fail quickly, fail cheaply.
41:45
Speaker 2: You know, if you want to give it a go,
41:47
Speaker 2: give it a go, but make sure you've got your
41:48
Speaker 2: own exit path already determined, which might be we can
41:51
Speaker 2: run for this amount of time with our mortgage while
41:54
Speaker 2: I'm doing this, otherwise we're out.
41:56
Speaker 1: This has happened with you before, Jackie Clark. I have
41:58
Speaker 1: run out of time. I'll just get one question in,
42:00
Speaker 1: if I can, from Kate, because I know you've had
42:03
Speaker 1: a look at the questions and we'll come back to
42:05
Speaker 1: the others. Kate says, I love the pod. I've been
42:08
Speaker 1: listening for years. I have a question about diversification of assets.
42:11
Speaker 1: We're doing okay. We've paid off our mortgage. I'm paying
42:14
Speaker 1: down a property and with some shares. I realize, though,
42:18
Speaker 1: that fortnightly purchases of an ETF that I set up
42:21
Speaker 1: are essentially replacing my super account. This made me think
42:24
Speaker 1: if we are potentially coming up to a dip in
42:26
Speaker 1: the market, I should be putting my savings elsewhere. You
42:29
Speaker 1: spoke to someone about private equity and infrastructure. I like
42:32
Speaker 1: the idea of something completely away from the share market,
42:35
Speaker 1: non-correlated assets as we call them. But I couldn't work
42:37
Speaker 1: out how to get into this space as a mom
42:39
Speaker 1: and dad investor. I'm sorry, Jackie, to put this on you.
42:42
Speaker 1: It's a huge question, but have a go.
42:44
Speaker 2: It's a great question. You've got a few minutes. Yeah, no, look,
42:45
Speaker 2: I'd love to. So two things for Kate, and I
42:48
Speaker 2: love that they write these questions to you. Trying to
42:51
Speaker 2: identify a dip in the market is beyond most professional advisors, right?
42:56
Speaker 2: So I think the difficulty is, and I've seen... We've
43:00
Speaker 2: now seen great examples from the 90s through to today
43:04
Speaker 2: that what works is staying invested through the cycles. There's
43:07
Speaker 2: a great model that has been studied around people who
43:11
Speaker 2: tried to follow the dips and the troughs and the peaks,
43:14
Speaker 2: and they were half as wealthy as the people who
43:17
Speaker 2: just stuck with the market through the peaks and troughs.
43:20
Speaker 2: So that's the first two things, Kate. I think the
43:23
Speaker 2: third thing, which is the trickier one, is yes, private
43:27
Speaker 2: equity and infrastructure looks like an effective diversification, a good strategy,
43:31
Speaker 2: but it's not readily accessible. What happens is you still
43:35
Speaker 2: kind of end up accessing it maybe indirectly through ASX
43:38
Speaker 2: listed vehicles. So perhaps the option for Kate is to
43:42
Speaker 2: first check her super fund and find out, because sometimes
43:46
Speaker 2: the super fund scale might enable them to access, for example,
43:50
Speaker 2: the infrastructure project. So, or The other option, of course,
43:54
Speaker 2: is then going direct to an investment advisor where you
43:57
Speaker 2: could be pooled with other mum and dad advisors to
44:00
Speaker 2: access things like private equity and infrastructure. So that's my
44:04
Speaker 2: suggestions for Kate.
44:07
Speaker 1: Are you of the opinion that this should be unlisted?
44:11
Speaker 2: More widely?
44:12
Speaker 1: Well, you sounded sceptical about getting access to it on
44:16
Speaker 1: the ASX. So does that mean you should keep away
44:19
Speaker 1: from the ASX and find an unlisted advisor?
44:21
Speaker 2: No, I just think Kate's looking for a bit of diversification.
44:25
Speaker 2: I think she's onto something there with some of the
44:27
Speaker 2: alternatives she could look at. The question is, how can
44:30
Speaker 2: she access those? And it's not directly through the ASX,
44:33
Speaker 2: which is kind of what's available to the general public.
44:35
Speaker 2: She's got to go through other mechanisms to access that.
44:38
Speaker 2: She can't just do that herself on a shared trading platform.
44:41
Speaker 1: And they may well be specialist funds.
44:43
Speaker 2: Correct.
44:44
Speaker 1: That are not on the ASX.
44:45
Speaker 2: Correct.
44:46
Speaker 1: Okay, very good. Very good. Hey, Jackie Clark, thank you
44:49
Speaker 1: very much for being on the show. It's been a
44:51
Speaker 1: while since we've had you on the show. It was
44:52
Speaker 1: great to have you on again, of course. Thank you
44:54
Speaker 1: very much.
44:54
Speaker 2: Loved it. Thank you. Great chat. I hope that people
44:57
Speaker 2: find that valuable.
44:58
Speaker 1: I'm sure they'll find it very valuable. Career navigation, folks,
45:02
Speaker 1: the underestimated art of our time. Okay. I hope you
45:06
Speaker 1: enjoyed that. The moneypuzzleattheaustralian.com.au is the email. Keep them rolling.
45:13
Speaker 1: I only got through one question. I'll do more questions
45:15
Speaker 1: the next session. Don't worry. And today's show was produced
45:19
Speaker 1: by Kristen Amiet. Talk to you soon.