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Special edition: How The Australian’s Wealth team invests · The Money Puzzle

0:10
Speaker 1: Hello, and welcome to the Australians Money Puzzle podcast. I'm
0:13
Speaker 1: James Kirby. Welcome aboard everybody, and welcome aboard to a
0:17
Speaker 1: special edition of this podcast because it's a pretty special
0:20
Speaker 1: day here at The Australian. We are launching a Wealth
0:24
Speaker 1: Vertical now. A Wealth Vertical is a digital unit within
0:28
Speaker 1: The Australian and it's going to be all about wealth
0:31
Speaker 1: in all its dimensions. And many of the people that
0:34
Speaker 1: you know and are familiar with from the podcasting myself
0:39
Speaker 1: and James Gerard, of course Stuart Williams. You here on
0:42
Speaker 1: Tuesday's Property podcast. You're going to see and read a
0:46
Speaker 1: lot more from them in The Australian, and you're going
0:49
Speaker 1: to hear a lot more from them in the podcast
0:52
Speaker 1: because we are widening the offering basically substantially, so seizing
0:58
Speaker 1: the opportunity to I've asked the Wealth editor of The Australian,
1:02
Speaker 1: Julianne Spragged, to come on the show. She's going to
1:05
Speaker 1: tell us about what's happening. And then when she's done that,
1:09
Speaker 1: we're going to do something we haven't tried before. We're
1:12
Speaker 1: actually going to talk about our own investing because both
1:15
Speaker 1: of us have been in financial journalism most of our
1:18
Speaker 1: lives and we have I hope, learned some very interesting
1:22
Speaker 1: things that we do want to tell you about.
1:24
Speaker 2: Hi Julianne, Hi James, thanks for having me on.
1:27
Speaker 3: Greater Have You on Marshafield has going to be Confession's
1:30
Speaker 3: going to be a confession session.
1:34
Speaker 1: Well partially confession and hopefully occasionally a part of celebration.
1:39
Speaker 1: Tell us first, what's happening with Wealth on the Australian
1:43
Speaker 1: and how our offering in all its multi media wonderfulness
1:48
Speaker 1: is going to change.
1:50
Speaker 2: It is exciting.
1:52
Speaker 3: We had some research that came through said lots of
1:55
Speaker 3: people want to be financially independent. People want to be
1:58
Speaker 3: able to have this job because they want to have
2:02
Speaker 3: a job for it to be a joy and not
2:04
Speaker 3: a chore. And the concern though, is that a lot
2:07
Speaker 3: of people aren't as financially literally as they want to be.
2:10
Speaker 3: They don't know where to go to get a lot
2:13
Speaker 3: of this information. They might see their mates or their
2:15
Speaker 3: friends and they're getting ahead, or they've got investment portfolios
2:18
Speaker 3: and things. I don't know the how, the why, the what,
2:20
Speaker 3: and so what we want to do is create this
2:22
Speaker 3: one stop hub, a place where you can get trusted information.
2:27
Speaker 3: So that's no matter what stage of the financial journey
2:30
Speaker 3: you are on. So there'll be information about investing, property, investing, superannuation,
2:35
Speaker 3: retirement planning, all those bits about that are very important
2:39
Speaker 3: for your life. But I don't know about you, James,
2:41
Speaker 3: but you just get caught up, don't you.
2:43
Speaker 1: Yeah, you do. And we've always had a lot of
2:48
Speaker 1: material and there's always like there's always been a good
2:51
Speaker 1: materia coming in different ways in different parts is such
2:54
Speaker 1: a big operation. And then we have podcasts, and then
2:56
Speaker 1: we have like Baron's Top Advisors, we have videos and
3:01
Speaker 1: we haven't put them all in the one place before,
3:04
Speaker 1: so I think that's part of it. So I do
3:06
Speaker 1: I recommend all the listeners have a look at this.
3:08
Speaker 1: It's launching today and I don't think there's ever been
3:12
Speaker 1: anything quite like it in media.
3:15
Speaker 3: Can I just say true for your listeners who love
3:18
Speaker 3: to listen to you. Twice Withightly on the Money Puzzle,
3:20
Speaker 3: we have put together a video series so that one
3:23
Speaker 3: to see James Kirby in real life.
3:26
Speaker 1: We did it on before we started the show. We
3:29
Speaker 1: were just laughing. The day we did it was the
3:32
Speaker 1: worst day I can ever remember. Weather wise, I should say,
3:36
Speaker 1: but we all flew in to do this video, folks,
3:38
Speaker 1: and it was just so bad. It was unreal, and
3:42
Speaker 1: we were all late, and all the flights, the two
3:44
Speaker 1: flights before me were canceled on the two after. I mean,
3:47
Speaker 1: it was a miracle that I got actually to that
3:49
Speaker 1: session at all. But the videos will be on this site,
3:53
Speaker 1: and we've done a whole series of masterclass videos which
3:57
Speaker 1: capture some of the sort of core areas of in
4:00
Speaker 1: and I recommend them to you. They will be distributed,
4:03
Speaker 1: or at least they'll be published. To see the sequential
4:05
Speaker 1: fashion in the days of head So look out for
4:07
Speaker 1: that now, Juliane, since I've got you in the hot seat,
4:10
Speaker 1: let's do this. I've been awfully careful on this show over.
4:14
Speaker 1: I mean, we launched a show in twenty twenty three,
4:16
Speaker 1: and I only kind of respond when we have listener questions.
4:20
Speaker 1: I respond, So if someone says, do you have shares
4:22
Speaker 1: in something? I'll answer. But I've never really expounded upon
4:26
Speaker 1: my portfolio on air before. I'm happy to do it
4:29
Speaker 1: on this show. We split it into shares here in
4:32
Speaker 1: the first segment, and then we might talk about property,
4:35
Speaker 1: and then we might talk about super which shares. It's
4:39
Speaker 1: interesting Eric Johnson and I were just talking in the
4:43
Speaker 1: office today. Eric's course associated her business. He was talking
4:46
Speaker 1: about it's the Compseck was launched thirty years ago this
4:51
Speaker 1: week and he'd been talking to the guy who launched
4:53
Speaker 1: at Michael Katz and it was extraordinary about Compsack and
4:57
Speaker 1: nap Trade and the other online brokers. When they came in,
5:01
Speaker 1: they changed everything. Because I don't know when you bought
5:03
Speaker 1: your first shares, but the day I bought shares the
5:06
Speaker 1: first time, I bought two shares five hundred dollars to
5:11
Speaker 1: each one Pacific Dunlop and National Australia Bank, and I
5:15
Speaker 1: had to go in. I was twenty five. I had
5:18
Speaker 1: to go in and sit in the reception of Potter
5:21
Speaker 1: Warburg in Collin Street, and some unfortunate stockbroker came out
5:26
Speaker 1: and talked to me about what I was doing. And
5:29
Speaker 1: the diversification of my portfolio was that I bought two
5:31
Speaker 1: shares rather than one, and one was terrific National Australia Bank.
5:35
Speaker 1: It doubled in price and the other one went almost
5:39
Speaker 1: to nothing. So it was a very good early adventure
5:43
Speaker 1: in shared trading. Can you remember your first shares.
5:48
Speaker 3: I can remember the first discussion about shares. It was
5:52
Speaker 3: my dad and I think I was eighteen or nineteen
5:57
Speaker 3: at the time, so of an age where shares had
6:02
Speaker 3: little value to me. You know, it was it was
6:08
Speaker 3: you know, it was a time where you're studying university
6:11
Speaker 3: and out at the pub and it was I'm trying
6:15
Speaker 3: to remember which iteration it was, but it was Telstra. Oh, yes,
6:19
Speaker 3: Now I don't know if yeah, I don't know if
6:20
Speaker 3: it's T two or T three.
6:21
Speaker 1: Yeah, one of the floats.
6:24
Speaker 2: It was one of the floats.
6:25
Speaker 3: And Dad was saying to me, you've got to get in,
6:27
Speaker 3: You've got to get these shares. And I said, well,
6:29
Speaker 3: how much do I have to spend? And he said
6:32
Speaker 3: two thousand dollars and I just I can still remember
6:35
Speaker 3: just saying.
6:36
Speaker 2: To him, you are crazy.
6:38
Speaker 3: That is a lot of money and I'm not going
6:40
Speaker 3: to be doing that. I look back and think, well,
6:43
Speaker 3: just as well, that was Telstra. Imagine if he was
6:44
Speaker 3: recommending CBA or something to me. I wish that I
6:47
Speaker 3: had spent the two thousand dollars on CBA back then.
6:50
Speaker 3: So I didn't buy shares. I came to it later.
6:52
Speaker 3: I remember one of the first shares.
6:53
Speaker 2: We ever bought. My husband and I it was.
6:57
Speaker 3: And we'll get to property soon, but we were Actually
7:00
Speaker 3: it was sort of boom times in Perth. It was
7:02
Speaker 3: to two thousand and six, two thousand and seven around.
7:04
Speaker 1: Them, the mining boom.
7:06
Speaker 3: Mining boom was in peak property prices. It felt like
7:09
Speaker 3: they were doubling every few weeks. They weren't, but that's
7:11
Speaker 3: what it felt like when you were here. We were
7:13
Speaker 3: trying to get our first place, and so we were
7:15
Speaker 3: at a housing estate. It was roughly about thirty kilometers
7:18
Speaker 3: north of Perth, and you had to camp out to
7:22
Speaker 3: get the land. Wow, it was seven nights in the back.
7:26
Speaker 2: Of a ute.
7:27
Speaker 1: Wow like plots, I know, Yeah, that's like a story
7:31
Speaker 1: from the gold Rush.
7:34
Speaker 2: One hundred percent. It was one hundred percent. And I
7:36
Speaker 2: just remember seeing that.
7:36
Speaker 3: The property developer of the estate that we were buying
7:39
Speaker 3: in was Pete and I was seeing this and I
7:42
Speaker 3: could just I was like, day, I'm making so much
7:44
Speaker 3: money and I can't believe I have to be sleeping
7:46
Speaker 3: in the back of a You ticket land, we should
7:49
Speaker 3: buy shares, and so we did buy shares in the developer.
7:52
Speaker 3: I look back on that now and think that's probably not.
7:54
Speaker 2: The smartest thing to do. I was probably doubling down.
7:56
Speaker 3: On the investment.
7:56
Speaker 2: We bought the land and he bought the developer.
7:58
Speaker 1: I probably should have for people to do that, though.
8:01
Speaker 1: They gravitate towards what they understand. If the factory at
8:04
Speaker 1: the corner over your street seems to be going great,
8:06
Speaker 1: and you realize it's on the stock exchange, then if
8:09
Speaker 1: I don't you, it's like bottom up investing. I actually
8:12
Speaker 1: had a marvelous example of bottom up investing. I was
8:17
Speaker 1: involved in a startup which was called well Mid Clothes,
8:19
Speaker 1: and it was an online clothing retailer. They had been
8:22
Speaker 1: going for a while and they got in a widget
8:26
Speaker 1: basically a piece of software called after pay, and they
8:30
Speaker 1: put it on, they installed it or whatever one evening,
8:34
Speaker 1: and the next morning they got all these orders that
8:37
Speaker 1: they'd never got before. And I remember thinking, that's very interesting.
8:43
Speaker 1: There's like hard evidence from the ground bottom up, if
8:45
Speaker 1: you know what I mean. I knew the top down,
8:47
Speaker 1: and I knew the story from top down, and we
8:49
Speaker 1: all know that the view of the market or whatever,
8:52
Speaker 1: you know, the big picture. But when I heard that,
8:55
Speaker 1: I remember thinking, this is no joke. This after fably
8:58
Speaker 1: is something and that was an example. I remember getting
9:01
Speaker 1: into after Pay and it went really well and it
9:03
Speaker 1: was a really good investment. And that was something that
9:05
Speaker 1: came through almost like you know the street. But that
9:10
Speaker 1: doesn't happen very often, can I.
9:12
Speaker 2: Ask you though? And sorry, we're going to go down.
9:14
Speaker 2: We'll go down different rabbit holes.
9:16
Speaker 3: But say so, if you got on too after pay early, goodbye,
9:18
Speaker 3: good tip by you. What happened then in the pandemic
9:22
Speaker 3: after pay dropped, there was a it just dropped like
9:26
Speaker 3: a star. I can't remember exactly what it went down to,
9:29
Speaker 3: about eight dollars or something like that, that's right. And
9:31
Speaker 3: I remember being pretty smug because I didn't buy after pay,
9:34
Speaker 3: and I remember thinking, hah, I knew this was all
9:37
Speaker 3: sort of smokes and mirrors and this is all going
9:38
Speaker 3: to be cactus and toast. And then it just rebounded
9:41
Speaker 3: nothing else because ye locked down and everyone started shopping.
9:44
Speaker 3: That's right, you know, ended up at one hundred bucks
9:47
Speaker 3: or something.
9:47
Speaker 1: To it was magnificent, stark. That is a magnificent trade. Really,
9:51
Speaker 1: I mean it was always wild and I didn't stay
9:55
Speaker 1: till the end, you know, so you always leave something
9:58
Speaker 1: out of the table. But was probably what are the
10:00
Speaker 1: best stocks they ever bought from me? I probably got out.
10:02
Speaker 1: I did get out too soon, but it was a
10:04
Speaker 1: terrific stock. I did well, you did well.
10:06
Speaker 3: I did well, So to your point, and maybe that's
10:09
Speaker 3: the lessons here for people if they want to start
10:11
Speaker 3: investing in stocks, is maybe it is smart to invest
10:14
Speaker 3: in what you know or have a sense of what
10:16
Speaker 3: the market is. So the one I did well on
10:19
Speaker 3: was coals. So this was before West Farmers bought Coals,
10:22
Speaker 3: and I remember going there Coals. I still have my
10:26
Speaker 3: coal's name badge from my university job on the delicatessen.
10:30
Speaker 3: No one will slice purtidos thinner than I can slice it.
10:32
Speaker 1: Fel oh, very fantastic.
10:35
Speaker 3: But it was went gym up so before West Farmers
10:37
Speaker 3: had bought Coals. Obviously it's on its own ownership now,
10:41
Speaker 3: but it was in the Doldrums. It wasn't a great supermarket,
10:43
Speaker 3: and I can just remember thinking this is a duopoli,
10:45
Speaker 3: that this there's not enough supermarkets in this country and
10:47
Speaker 3: it's not going to be down in the Doldrums forever.
10:49
Speaker 3: So I remember getting in early and the West Farmers
10:52
Speaker 3: came in and then spruced her.
10:53
Speaker 1: Up best farmers come in and paid an enormous amount
10:56
Speaker 1: for it, right smack at that two hours before GFC.
11:01
Speaker 1: So I think one of the things that's useful folks
11:04
Speaker 1: about share investing is ideally if you can if you
11:08
Speaker 1: do understand the stock, it helps enormously at least your
11:11
Speaker 1: connection to it is better. Anyone can start and play.
11:14
Speaker 1: Basically you can buy a stock or two stocks this.
11:17
Speaker 1: You can always buy exchange traded funds as well, which
11:20
Speaker 1: is what I generally meant. If someone says to me
11:22
Speaker 1: what stocks should I buy and they don't know anything,
11:24
Speaker 1: they've never done anything, I always say, buy an exchange
11:27
Speaker 1: traded fund by the AX.
11:29
Speaker 3: I'll ask you about that now, though, because I'm in
11:31
Speaker 3: this basket where I think I need to do better
11:33
Speaker 3: with my stocks.
11:35
Speaker 2: You know, I've just sort of almost.
11:36
Speaker 3: Played with them rather than proper investing anythink and ATF
11:40
Speaker 3: the way to go. Atfs have exploded so much that
11:44
Speaker 3: I now find them incredibly confusing. There's almost too many ETFs.
11:48
Speaker 3: Which one are you're back?
11:49
Speaker 1: Yeah, they've drifted from the original proposal. Absolutely. The original
11:53
Speaker 1: proposal was really good, you know, it was by the market.
11:56
Speaker 1: Just buy the ASX two hundred or buy the S
11:59
Speaker 1: and P five hundred plus vanilla, and whatever happened to
12:02
Speaker 1: that market happened to your ETF. So if you both
12:04
Speaker 1: the ASX two hundred ETF a year ago, you'd have
12:07
Speaker 1: made fourteen percent, because the ASX two hundred med fourteen
12:10
Speaker 1: percent in the twelve months to June thirty, being you know,
12:14
Speaker 1: ten percent plus four percent for your dividends. I think
12:17
Speaker 1: that's still the dominant model. The problem is with these guys,
12:19
Speaker 1: you know, Julianne, they can't sit down and leave good alone.
12:24
Speaker 1: They got to keep coming up with things, right they
12:27
Speaker 1: you know, there's seven hundred people in Vanguard. What did
12:29
Speaker 1: they all do? Well? Guess what? They get new ideas
12:33
Speaker 1: and they go into the boss and they say, hey, boss,
12:36
Speaker 1: guess what, I've got something in mind that would be
12:38
Speaker 1: really good. And so that ETF thing is drifting. So
12:42
Speaker 1: I think when we talk about ETFs on the show,
12:44
Speaker 1: certainly I always make the points plain vanilla ETFs, and
12:47
Speaker 1: I would say to most people most of the time,
12:50
Speaker 1: if you're starting with shares, ETFs are great. And if
12:53
Speaker 1: they had been around when I was starting buying shares,
12:55
Speaker 1: it would have been so much better than buying two shares,
12:58
Speaker 1: one of which turned out to be great and one
13:00
Speaker 1: of which turned out to be useless, and you don't
13:02
Speaker 1: that's the sort of risks you don't want to take.
13:04
Speaker 3: If you could go back in time, just pretend that
13:05
Speaker 3: ETFs where they, you would have bought an index ATF
13:08
Speaker 3: I would.
13:08
Speaker 1: I would suggest to anyone starting get some ETFs, hold
13:11
Speaker 1: them for a year, start to understand how it all works,
13:14
Speaker 1: Watch how you get your dividends come through, and how
13:16
Speaker 1: it works with tax and everything else, and get a
13:18
Speaker 1: handle on it. And you've you know, you're taking very
13:21
Speaker 1: little risk because you're just taking you're just buying the market.
13:25
Speaker 1: And then after a while, when you're a bit more
13:27
Speaker 1: sure of it, it doesn't have to take forever. It could
13:29
Speaker 1: take six months, it could take a year. Then you
13:32
Speaker 1: can start to strike out and you can say, okay,
13:36
Speaker 1: this time, I'm going to buy direct shares because personally,
13:40
Speaker 1: I think ten shares is about as much as anyone
13:43
Speaker 1: should have. That's as much as you can hold in
13:47
Speaker 1: your head. Really, I should be if you've got I
13:48
Speaker 1: always say, if you've got chairs, I should be able
13:50
Speaker 1: to ask you what are they and how much are
13:53
Speaker 1: they today? And unless you're you know, got a photographic
13:56
Speaker 1: memory or something. I reckon about ten shares is about
13:59
Speaker 1: as much as the one should have, and it is enough.
14:02
Speaker 1: It can really you can diversify. You can buy banks
14:04
Speaker 1: and miners and tech companies and everything else. That's something
14:06
Speaker 1: I would say. The other part I would say is
14:08
Speaker 1: that at a certain point you've got to get serious
14:11
Speaker 1: about shares if you're a long term investor, especially if
14:14
Speaker 1: you're thinking of building your own portfolio or your self
14:16
Speaker 1: managed super fund, and at that point then you don't
14:20
Speaker 1: have to have a connection with them. It's all about
14:22
Speaker 1: the numbers, you know, It's all about is this share
14:24
Speaker 1: good value? At the moment it's the old Roger Montgomery
14:27
Speaker 1: thing about value and Roger of courses. Another person's off
14:30
Speaker 1: and on the show rights for the Australian will be
14:32
Speaker 1: involved in our new vertical. He's whole thing that you know,
14:34
Speaker 1: you're buying a piece of a company, you're buying a
14:37
Speaker 1: little TV bit of the company. So what really matters
14:40
Speaker 1: is their company and how is the company going.
14:44
Speaker 3: My problem, I reckon is because we're in newsrooms and
14:49
Speaker 3: we cover a lot of stories. We cover a lot
14:51
Speaker 3: of stories about stocks that go absolutely bananas. They deliver
14:56
Speaker 3: incredible returns. But for every one of those stories, we're
14:59
Speaker 3: all doing stories or when things go wrong, yes, and
15:02
Speaker 3: we should when he's a collapsing and share prices are tanking,
15:05
Speaker 3: and so it does leave you sort of kind of
15:07
Speaker 3: clinging to the sidelines because you don't know which way
15:09
Speaker 3: to go.
15:10
Speaker 2: You know too much, You almost know too much.
15:12
Speaker 3: I have threatened to do it, and maybe for this
15:14
Speaker 3: new vertical I should. I was going to create a
15:19
Speaker 3: list of when I had met a billionaire or rich.
15:23
Speaker 2: This does.
15:23
Speaker 3: My former job was editing rich lists for the Financial Review,
15:27
Speaker 3: and I look at some of the share price growth
15:29
Speaker 3: and I think, if I had bought shares when I
15:31
Speaker 3: met that rich list, yes, would I be in fact
15:34
Speaker 3: talking to you on this podcast today at the book, James,
15:37
Speaker 3: I'm not sure. I was with Andrew Forrest in the
15:39
Speaker 3: Pilborough in two thousand and six having a look at
15:41
Speaker 3: what would become four to Skew Metal screwp. He's looking
15:44
Speaker 3: at the dusty Pilborough.
15:45
Speaker 1: And oh, what a great story, Yeah, and.
15:47
Speaker 3: Asking me whether it is the most beautiful thing I've
15:50
Speaker 3: ever seen. And I'm looking at a concrete pylon in
15:52
Speaker 3: the middle of nowhere, and I'm thinking I've seen prettier things,
15:55
Speaker 3: you know, but I could see why he.
15:57
Speaker 1: The share is republic a dollar or something at the time,
16:00
Speaker 1: I think that could have been less.
16:01
Speaker 2: Yeah, pretty sure. I emailed someone just.
16:04
Speaker 3: The other week actually, just to get a comment for
16:06
Speaker 3: a story, and I said, oh, I just want to
16:09
Speaker 3: look back the last time, you know, we'd spoke properly,
16:11
Speaker 3: and it was a couple of years ago. And if
16:13
Speaker 3: I had bought shares in that particular company, Promedicus, I
16:18
Speaker 3: think I worked out if I bought a thousand shares,
16:20
Speaker 3: I would have my three hundred thousand dollars. You know
16:23
Speaker 3: what I could have should at James.
16:25
Speaker 1: Well, as you say, the thing is, it's all about risk.
16:29
Speaker 1: So if you buy the ETFs, this is the minimum
16:32
Speaker 1: risk approach to shares, and then after that it's a
16:35
Speaker 1: question of the more risk you take, then the more
16:39
Speaker 1: likely you will have volatility. And volatility, as you know, folks,
16:43
Speaker 1: basically means it's going to go way up or way down.
16:45
Speaker 1: So for every pro Medicus, there's ninety nine little medical
16:50
Speaker 1: device companies that go nowhere. And maybe we'll leave it
16:53
Speaker 1: just there, because that's the point we really want to
16:55
Speaker 1: make about shares. We'll have a break and we will
16:58
Speaker 1: come back and we will talk about what everybody loves
17:00
Speaker 1: to talk about. Property. Back in a moment. Hello, Welcome
17:09
Speaker 1: back to the Australians Money Puzzle podcast. James Kirby here
17:12
Speaker 1: with Julianne Spragg. Julian is the Wealth editor of The Australian,
17:16
Speaker 1: and we are talking on the occasion of the launch
17:20
Speaker 1: of a new Wealth vertical on The Australian, which is
17:23
Speaker 1: going to be really terrific and I'm delighted to see
17:26
Speaker 1: it because it's basically putting a lot of effort and
17:29
Speaker 1: investment and people into the area that we've been working
17:33
Speaker 1: on here for some time on the Money Puzzle, and
17:36
Speaker 1: the Money Puzzle too actually, as I say, is effectively
17:39
Speaker 1: being relaunched inside this Wealth vertical. This week you'll see
17:43
Speaker 1: a lot more episodes, some new voices involved here, and
17:48
Speaker 1: we'll do some shows a wider nature than we've been
17:51
Speaker 1: doing to this point. Now. As you know, Tuesday's Property
17:55
Speaker 1: Show is becoming very popular and I've dealt with property
17:59
Speaker 1: for a long time and one of the things I
18:01
Speaker 1: want to talk to Juliane about is again something of
18:05
Speaker 1: a confessional in the way that we talked about shares there,
18:08
Speaker 1: and by the way in the first part we were
18:09
Speaker 1: all very smart talking about how the shares we had
18:12
Speaker 1: that were great and that there were big winners. I
18:14
Speaker 1: do want to mention that I've had some absolute duds.
18:17
Speaker 1: I had Great Southern Plantations, which was one of the
18:19
Speaker 1: worst shares in the history of the world. And even
18:22
Speaker 1: at the moment in my little ten portfolio, I have
18:25
Speaker 1: I think a dud, and I just won't sell it
18:28
Speaker 1: because it keeps teasing me that it's going to get better,
18:30
Speaker 1: which is Ramsey Healthcare hearing me loud and clear, Ramsey Healthcare.
18:34
Speaker 1: Now on the property, you can't make mistakes on property
18:38
Speaker 1: like you can make mistakes on shares, can you, Julianne,
18:40
Speaker 1: It's a different story. It's a big commitment. That's the
18:44
Speaker 1: first thing, isn't it to explain to people. It's a
18:46
Speaker 1: big commitment. It's illiquid, it takes a lot of effort,
18:50
Speaker 1: it takes a lot of commitments. I mean, you needed
18:52
Speaker 1: an almost like you almost need like a settled lifestyle
18:55
Speaker 1: and a really clear model to do property. You can't
18:58
Speaker 1: play with it like you can play with shares.
19:01
Speaker 3: I think also it's the sums of what's involved. At
19:05
Speaker 3: the beginning our shares, you might be able to sort
19:08
Speaker 3: of do five ten thousand or build up to a
19:10
Speaker 3: fifty thousand or one hundred thousand portfolio. As I mentioned earlier,
19:13
Speaker 3: when we brought out the shares and the property developer,
19:16
Speaker 3: we were camping out for this block of land at
19:19
Speaker 3: the time. And I know people who are looking into
19:21
Speaker 3: property now will be thinking, oh, heavens, I wish I
19:23
Speaker 3: could get a block of land for that. But I
19:24
Speaker 3: think the block of land was around two hundreds, two
19:26
Speaker 3: hundred and twenty thousand, something like that, and that, just
19:29
Speaker 3: for me in my twenties was an extraordinary sum of money.
19:32
Speaker 3: The loon hadn't built the house on it yet you
19:33
Speaker 3: got to build the house, and it's what I just
19:36
Speaker 3: remember thinking, this is so much debt and how are
19:38
Speaker 3: we going to manage every little penny.
19:41
Speaker 1: Yeah, you're taking on a burden. You are taking on
19:43
Speaker 1: a burden when you buy a house. It's really hard.
19:46
Speaker 1: I mean, in my family, we're at that point where
19:48
Speaker 1: my adult kids are starting to look at the property market.
19:51
Speaker 1: And you know, the thing is the course, the prices.
19:55
Speaker 1: When I say the prices, I'm not saying that in
19:57
Speaker 1: a vague, sort of simplistic way. What I mean is
20:01
Speaker 1: the price of property as a multiple of the income
20:05
Speaker 1: that they are making, or anyone is making, has changed
20:08
Speaker 1: so immensely that it really has changed the game. I
20:11
Speaker 1: met out that the first house a boat in Melbourne
20:15
Speaker 1: as a home was an inner city cottage basically, and
20:18
Speaker 1: it was three and a half times my income income.
20:21
Speaker 1: My income at the time was fifty grand and I
20:25
Speaker 1: could buy a house in inner city in Melbourne for
20:27
Speaker 1: three and a half times my income the same house
20:30
Speaker 1: to buy that house stay, which is there, if someone
20:34
Speaker 1: wanted to buy it at three and a half times
20:36
Speaker 1: their income, they'd have to make three hundred thousand dollars
20:39
Speaker 1: a year. And the thing is, how many people make
20:42
Speaker 1: three hundred thousand dollars a year? Not many. And so
20:45
Speaker 1: the point I'm making is it's become so expensive, and
20:50
Speaker 1: I mean that in a very thorough way. I mean
20:53
Speaker 1: that as a multiple of income, as a measure internationally,
20:56
Speaker 1: as a measure historically. And you've did something recently, bar
21:00
Speaker 1: was it UBS where they were making the point that
21:03
Speaker 1: our wealth is so tied up now in property.
21:06
Speaker 3: Yes, so UBS sort of tracked global wealth and in
21:09
Speaker 3: one of their most recent reports. It does highlight Australians
21:12
Speaker 3: really are some of the wealthiest people on the planet.
21:16
Speaker 3: And I find this really interesting when you read it,
21:18
Speaker 3: because I think if you talk to most people and said,
21:21
Speaker 3: you know, you're really rich in global terms.
21:24
Speaker 2: People you don't feel rich.
21:26
Speaker 3: It is because it's all tied up in these assets
21:29
Speaker 3: and you've got debt attached to it and all those
21:30
Speaker 3: sorts of things. But what ubs that They made the
21:33
Speaker 3: point that there's a disproportionate amount of wealth tied up
21:36
Speaker 3: in property for Australians without property prices are some of
21:39
Speaker 3: the highest in the world, and so our wealth is
21:41
Speaker 3: tied in to that. And then we have this conundrum.
21:46
Speaker 3: So as you mentioned, so you were able to get
21:48
Speaker 3: into property three four times your earnings, your kids now
21:52
Speaker 3: have to have ten eleven times earnings.
21:54
Speaker 1: That's right, And how.
21:55
Speaker 3: Do we fix that? How do you fix that problem?
21:57
Speaker 3: And so I'm approaching this so my daughter's much younger,
22:00
Speaker 3: orders six, and if property prices keep going how they
22:02
Speaker 3: have been going, I love her daily, But does that
22:05
Speaker 3: mean she's with me for life, for the end or
22:08
Speaker 3: what am I doing?
22:09
Speaker 2: Now?
22:09
Speaker 1: Their deposit will be larger than the value of the
22:12
Speaker 1: homes we bought. I mean, that's happening already. It is.
22:16
Speaker 1: It's really tough. And I mean, and my guys do
22:19
Speaker 1: turn around to me and they say yeah, yeah, and
22:20
Speaker 1: they're saying like, I don't know if I want to
22:21
Speaker 1: do this, And of course I am saying you must,
22:25
Speaker 1: because it's not going to get cheaper. I'm sorry, but
22:27
Speaker 1: it's not going to get cheaper. Well.
22:30
Speaker 2: I spoke to a property developer.
22:32
Speaker 3: This was before I actually had my daughter, and he
22:34
Speaker 3: said to me, he said, oh, are you planning to
22:36
Speaker 3: have kids? And my face must have had This was
22:38
Speaker 3: such a random thing to ask me for you know,
22:40
Speaker 3: we're doing this news interview. And said, I don't need
22:41
Speaker 3: to pry. I'm just the reason I'm asking is that
22:44
Speaker 3: you need to have a plan. So for every child
22:47
Speaker 3: you have, you should have an investment property for that child,
22:51
Speaker 3: because then you'll need to sell that investment property to
22:54
Speaker 3: provide the deposit for your children to get into the
22:56
Speaker 3: property market.
22:57
Speaker 2: This was his thing.
22:58
Speaker 1: Yeah, And I mean, it's a terrible, brutally rational way
23:01
Speaker 1: to approach it, but it's true.
23:04
Speaker 3: So I just had one child and I haven't bought
23:06
Speaker 3: the investment property, but we are looking into it because
23:08
Speaker 3: it's sort of thinking about where to go.
23:10
Speaker 1: With that, and in a way, we're chasing our tails,
23:11
Speaker 1: so we all run off and we stretch ourselves to
23:14
Speaker 1: buy investment property so that we can catch up with
23:18
Speaker 1: the property prices. We are pushing the prices higher by
23:22
Speaker 1: investing in property, but we're doing it because we're worried
23:25
Speaker 1: that prices will be so high for our own kids
23:27
Speaker 1: when they go to buy home. It's hard work, but
23:30
Speaker 1: I'm a pragmatist at heart, and I think that's it, right,
23:33
Speaker 1: that's the game. So the game is there, and what
23:36
Speaker 1: we're hoping to do on the show always is help
23:39
Speaker 1: and inform people what is going on out there, insights
23:43
Speaker 1: into what you can really how you can play it.
23:46
Speaker 3: Yeah, with everything that we've just spoken about, so these
23:49
Speaker 3: are conversations that happen around dining room tables across the country,
23:53
Speaker 3: and it's not lost on the politicians. And I do
23:56
Speaker 3: wonder if you've got labor in control. They obviously a
24:02
Speaker 3: few years back, tried to float, you know, run up
24:05
Speaker 3: the flagpole different ideas on changing capital gains tax and
24:08
Speaker 3: yet a whole bunch of other things, and it didn't
24:10
Speaker 3: go down. Very well. I do wonder if we're in
24:13
Speaker 3: an environment. You know they're going after now super and
24:15
Speaker 3: we'll get to a super discussion soon. But whether you
24:17
Speaker 3: think that some of these tax leaders and trying to
24:22
Speaker 3: work on a policy sense to get properly markets tamed
24:26
Speaker 3: will be on the agenda.
24:27
Speaker 1: I mean, they've been re elected with an enhanced majority.
24:30
Speaker 1: If they are ever going to tackle this issue, this
24:33
Speaker 1: is the time to tackle it. I think there's an
24:35
Speaker 1: appetite for it, and I think even people who are
24:39
Speaker 1: totally pro investment know that the system is terribly upside
24:43
Speaker 1: down and it favors older Australians against younger Australians. The
24:46
Speaker 1: super system does, but so does the property system, and
24:49
Speaker 1: it favors homeowners over renters beyond a doubt. You can
24:53
Speaker 1: have a ten million dollar house on Sydney Harbor. You
24:55
Speaker 1: can have a twenty million dollar house on Sydney Harbor
24:57
Speaker 1: and you can get the pension that is. So that's
25:01
Speaker 1: something that could be reassessed and we know Tanya Plipper
25:05
Speaker 1: six Social Services Department is looking at that. We know
25:09
Speaker 1: that they're looking at the Labor Party is looking at
25:12
Speaker 1: capital gains tax. Again, that's property if you hold a
25:15
Speaker 1: property for more than a year, you only have to
25:17
Speaker 1: pay twenty five percent CGT. That discount is I think
25:20
Speaker 1: that I think these are I think these are sitting
25:22
Speaker 1: ducks actually, Juliana. I think that this is where they're
25:25
Speaker 1: gonna this is where they're going to peel wealth taxes from.
25:29
Speaker 1: And it's all again it's around property. And of course
25:32
Speaker 1: it's around property because going back to what you said
25:35
Speaker 1: at the start, that's the cornerstone of our wealth. But
25:38
Speaker 1: you know, we are getting to a point where it's
25:41
Speaker 1: I would say it's backfiring. But if you are an
25:45
Speaker 1: investor now and you buy an apartment in Sydney for
25:48
Speaker 1: a million dollars and you're getting two percent rental yield
25:53
Speaker 1: and you're that's hopeless. It's hopeless. I mean as an investment,
25:57
Speaker 1: everyone loses, the rental losers they're paying so much. The
26:00
Speaker 1: investor loses, they're paying so much for the property. The
26:02
Speaker 1: yield is going to be really low, and then the
26:04
Speaker 1: game becomes almost exclusively a game of hoping you get
26:08
Speaker 1: the capital gains tax at the end. So I think
26:11
Speaker 1: something has to crack here.
26:14
Speaker 3: I agree, Yeah, I think it's just going to be what, Yeah,
26:19
Speaker 3: what is it?
26:20
Speaker 1: Going to be well, we will be covering that very closely. Indeed,
26:22
Speaker 1: don't you worry, we will not miss a beat on
26:25
Speaker 1: that one on property and property taxes. But you know,
26:27
Speaker 1: I've had lots of people on the show. We talk
26:29
Speaker 1: about tax and we talk about the restraints if you like,
26:33
Speaker 1: that are in place for investors, and you will always
26:36
Speaker 1: have restraints. And when you have a labor government in
26:38
Speaker 1: particularly for a second term, they have a very clear
26:41
Speaker 1: agenda and often that agenda is not pro investor. Occasionally
26:45
Speaker 1: it can be. Under certain under the Keating regime, he
26:50
Speaker 1: managed to do both. I don't think it's pro investor
26:52
Speaker 1: at the moment in any way under say Jim Chalmers.
26:55
Speaker 1: But when you have people on the show that I've
26:58
Speaker 1: talked to, the one thing that I find with the
27:00
Speaker 1: is they kind of whatever the obstacles are, they're determined
27:04
Speaker 1: to overcome them. They will say I'm going to do
27:07
Speaker 1: it anyway.
27:08
Speaker 2: Yeah.
27:08
Speaker 3: So with what we know, and there's probably changes of that,
27:10
Speaker 3: there's going to be political pressure to do something. And
27:13
Speaker 3: you mentioned so you've got your there's adult kids.
27:16
Speaker 2: In your house and one of them is looking at property.
27:18
Speaker 1: Yes, yes, indeed, what's your.
27:20
Speaker 2: Advice and how are you trying to guide them?
27:22
Speaker 1: My advice always is that that there's two entirely different
27:26
Speaker 1: issues in property. One is buying a home and one's
27:29
Speaker 1: buying an investment in property. If you're buying a home,
27:32
Speaker 1: a lot of things that we talk about on the
27:34
Speaker 1: show are have to be seen through that filter, because
27:38
Speaker 1: there's this enormous thing if you buy a home. Number one,
27:41
Speaker 1: you're not paying rent anymore. If you buy a home,
27:44
Speaker 1: you immediately enter the privileged arena of the property owner.
27:50
Speaker 1: In Australia, where there is an where there's exemption from
27:53
Speaker 1: capital gains tax, where even when you get when you're older,
27:56
Speaker 1: there's an exemption from the pension. The whole system is
28:00
Speaker 1: loaded in favor of the homeowner. And that's why I
28:03
Speaker 1: support things that some people think are controversial, like, for instance,
28:06
Speaker 1: tapping super to buy a home. But the way I
28:08
Speaker 1: look at it is the system is so tilted in
28:10
Speaker 1: favor of the homeowner. It would be much more important
28:14
Speaker 1: to own a home than to have an extra twenty
28:16
Speaker 1: or fifty grand or whatever in super. If it's coming
28:19
Speaker 1: down to that, then really the home is so important.
28:21
Speaker 1: So I kind of separate that very and you can
28:24
Speaker 1: buy an apartment. The point I'm making there is that
28:27
Speaker 1: we know houses are much much better investments and apartments
28:30
Speaker 1: in the main, But when you're buying a property as
28:34
Speaker 1: a home, the first thing, and the major thing is
28:36
Speaker 1: to just buy it. Do it, do it, don't be
28:41
Speaker 1: I was thirty three when we bought our first home.
28:43
Speaker 1: Because I'd lived all around.
28:44
Speaker 3: The world, I would say that I agree with you,
28:49
Speaker 3: But because when I look back, I think, gosh that
28:53
Speaker 3: one of the top tips for people would be to
28:55
Speaker 3: talk to me about when I'm buying property and then
28:57
Speaker 3: run the other way.
28:57
Speaker 1: I have this.
28:58
Speaker 3: Uncanny ability to buy at the top.
29:01
Speaker 1: That's perth for you.
29:02
Speaker 2: No, it's very sickly, it's perfectly.
29:04
Speaker 1: It is notoriously so.
29:06
Speaker 3: But if I look back, it doesn't really matter, because
29:09
Speaker 3: it does. I would have made a lot more money
29:11
Speaker 3: if I had not bought at the top. But it
29:13
Speaker 3: goes down and then it comes back up again, and
29:15
Speaker 3: it goes up, and then it goes down and it
29:17
Speaker 3: goes up. So if I had never have gotten on
29:20
Speaker 3: the property ladder, it would be eyewatering to think about
29:26
Speaker 3: trying to do it. Now.
29:27
Speaker 1: That's right, I know, it's really that is the thing
29:30
Speaker 1: I'm saying to people on the show all the time,
29:32
Speaker 1: just start and as you say, if it's a home,
29:36
Speaker 1: it's so different. Okay, you know you've got a mortgage. Okay,
29:39
Speaker 1: last year was really good. For what's happening this year.
29:41
Speaker 1: All prices are down. You don't care about that. It's
29:44
Speaker 1: your home. You're living there and years past and you know,
29:46
Speaker 1: guess what, every five years it's higher than it was
29:49
Speaker 1: at the start of the five year period. So yeah,
29:52
Speaker 1: it's a different things.
29:53
Speaker 2: And you get in.
29:53
Speaker 3: I still remember that very first distill mentions. It was
29:56
Speaker 3: twenty five thirty k's out of Perth. You know, it
29:58
Speaker 3: was a frontier types. The fences hadn't even been built yet.
30:01
Speaker 3: You know, the first week in this house, this is.
30:04
Speaker 1: Everyone did everyone have a rifle of a rifle beside them?
30:10
Speaker 3: It was Actually, it was so fantastic because you got
30:12
Speaker 3: to know your neighbors in this camp at this random situation.
30:15
Speaker 3: We've got seven nights out to get the land, and
30:17
Speaker 3: then you all built the houses together and there's this
30:19
Speaker 3: real camaraderie. But I remember the first summer in that house.
30:24
Speaker 3: It's person it's the out of suburbs, and so we
30:27
Speaker 3: didn't have money for the air. We had no air
30:28
Speaker 3: conditioning for the first couple of years, and for summer
30:32
Speaker 3: we so I bought these two dollars water bottles, the
30:35
Speaker 3: spray water bottles, and we had a pedestal fan at
30:37
Speaker 3: the foot of the bed and you would just lie
30:40
Speaker 3: back and you'd wait for the fan to just kind
30:42
Speaker 3: of get near you, and then you go sprits.
30:43
Speaker 2: It splits the water bottle and.
30:45
Speaker 3: Then you just get this spray of water to try
30:48
Speaker 3: and help you sleep, you know, in those forty degree days.
30:51
Speaker 1: Good for you. So you did it the hard way,
30:53
Speaker 1: telling us you did it. You did it the hard way.
30:55
Speaker 3: You know sometimes and I know this gets thrown around
30:58
Speaker 3: a little bit, but you sort of think it's just
31:00
Speaker 3: you do sort of sometimes you've got to kind of
31:02
Speaker 3: roll up your slaves, do it tough for a bit
31:03
Speaker 3: and get in and then find your way.
31:05
Speaker 2: Now we're not still in that.
31:06
Speaker 3: We sold that property and you know we've moved to
31:08
Speaker 3: Melbourne and Sydney and back again. Many properties down the
31:11
Speaker 3: line now. But we do talk to people gens to
31:15
Speaker 3: get frustrated that there's a sense that everything has to
31:17
Speaker 3: be perfect.
31:18
Speaker 1: Yes, and Stewart Williams on the show has said more
31:21
Speaker 1: than once. He doesn't say this young he doesn't stand
31:25
Speaker 1: back and say this younger generation aren't prepared to do
31:27
Speaker 1: it tough. But what he does say is that people
31:29
Speaker 1: are much more skeptical and cautious about the renovator opportunity
31:37
Speaker 1: than they used to be. That's because, among other things,
31:39
Speaker 1: there was a shortage of treaties in COVID and some
31:43
Speaker 1: people got terribly caught, and there was a thirty percent
31:45
Speaker 1: inflation of course in building materials. But that is over now.
31:48
Speaker 1: But is that part is over broadly, But there's still
31:52
Speaker 1: that fear in the market about not just about renovating
31:56
Speaker 1: a house, but whether your plans can be execut in
32:00
Speaker 1: the way that you think because of both shortage still
32:04
Speaker 1: some residual shortage of trades and the price going up
32:07
Speaker 1: all the time.
32:09
Speaker 3: In defense of the younger generation, I will say in
32:12
Speaker 3: our coverage coming up in this new Wealth body of
32:14
Speaker 3: call that we're launching, keep an eye out.
32:16
Speaker 2: We've got a story. We've chattered this. I want to say, kid,
32:19
Speaker 2: but it's twenty six. He's not a kid. He's twenty
32:23
Speaker 2: six year old, and he has made sacrifices.
32:25
Speaker 3: All of his friends have gone out and you know,
32:26
Speaker 3: there are music festivals and are off doing things or
32:29
Speaker 3: they've got new cars, and he hasn't done any of that.
32:30
Speaker 3: He's sort of head down the backside up, and he's
32:33
Speaker 3: got quite a few investment properties and counting.
32:37
Speaker 2: He's just really rolled up his slaves. So we'll yeah,
32:41
Speaker 2: story to life.
32:41
Speaker 1: Yeah, okay, look forward to seeing that one. All right, Now,
32:45
Speaker 1: what we might do here. We've talked a little bit
32:47
Speaker 1: about shares and starting and shares and what you must
32:51
Speaker 1: do to get going in the share market. We've talked
32:54
Speaker 1: a little about property and how to start in property
32:58
Speaker 1: and that, as I say, there enormous division between a
33:03
Speaker 1: home and an investment property. And we didn't talk much
33:06
Speaker 1: about investment property except to say obviously investment property is
33:09
Speaker 1: a different game out together. It's just basically about the price.
33:11
Speaker 1: So the price you make your profit when you buy.
33:14
Speaker 1: You manage it as best you can for as little
33:16
Speaker 1: cost as you can, and that is a different game
33:19
Speaker 1: than buying a home. In the last second, if we're
33:21
Speaker 1: going to talk about super because this is often where
33:25
Speaker 1: it all rose for everybody. The reason you are investing,
33:28
Speaker 1: as Julie Anne said at the start, and I do
33:31
Speaker 1: sincerely believe this. It's a great way to be. You
33:34
Speaker 1: can enjoy your job a lot more if you don't
33:36
Speaker 1: have to worry about whether you need to be paid
33:38
Speaker 1: or not. That's one thing. The second thing is that
33:43
Speaker 1: we're all going to need super. It's become extremely expensive
33:47
Speaker 1: for what the country. As Julie Anne said at the
33:48
Speaker 1: start of the show, what sort of super are you
33:50
Speaker 1: going to have? How are you going to start it,
33:51
Speaker 1: how are you going to approach it? Let's talk about
33:53
Speaker 1: that in a moment ago. Hello, Welcome back to The
34:03
Speaker 1: Australian's Money Puzzle podcast. James Kirby, Associate Editor Wealth on
34:08
Speaker 1: The Australian, talking to Julie An Spragg, the Wealth editor
34:11
Speaker 1: of The Australian, on the occasion of the launch of
34:15
Speaker 1: our Wealth vertical on The Australian, which we, by the way,
34:18
Speaker 1: have been working on for a long time. Julianne has
34:20
Speaker 1: been working on this since April April, and it's now.
34:24
Speaker 3: About that very first I came across worked at the
34:28
Speaker 3: Financial Review and then had a since talkback radio believe
34:31
Speaker 3: it or not, James, and then took up this opportunity. Yeah,
34:34
Speaker 3: it feels nice to be back on the tools to
34:36
Speaker 3: be honest with the mar headphines, it's.
34:38
Speaker 1: A wonderful thing that journalism has that sort of widened,
34:41
Speaker 1: that we can do videos and we can do podcasts
34:44
Speaker 1: and we can write as we always did. And this
34:46
Speaker 1: is what this vertical is all about, getting you the
34:50
Speaker 1: reader or the listener or the viewer, and getting what
34:52
Speaker 1: we know through in different ways. Now this segment, I
34:55
Speaker 1: just want to talk about super And the first thing
34:58
Speaker 1: you need to know, folks, is that I have gone
35:00
Speaker 1: separate ways on super She's with big super, a big
35:04
Speaker 1: super fund, which just sends her a statement every now
35:08
Speaker 1: and again. Or she can go online and she says, oh,
35:11
Speaker 1: there you are. It's gone up again. Isn't that nice?
35:13
Speaker 1: And I do my own So I have a self
35:17
Speaker 1: managed super fund since two o sixty year before the GFC.
35:21
Speaker 1: Who I caught it tights, Yes, So.
35:25
Speaker 3: So then I mean, you know where you live, so
35:27
Speaker 3: you can send your own statements this that's fair enough
35:29
Speaker 3: because this is real confessional time. This is such a confession.
35:35
Speaker 3: I don't think I've got a statement from my super
35:39
Speaker 3: fund in probably three years because we moved.
35:42
Speaker 2: Yes, So that gives you.
35:44
Speaker 3: An understanding of how little I have paid attention.
35:49
Speaker 1: And you would be in a very large group of
35:52
Speaker 1: people who are not engaged, as they say, with their
35:57
Speaker 1: super fund.
35:59
Speaker 3: Why what would I be when I have so much
36:03
Speaker 3: going on in my life, James?
36:04
Speaker 2: But what I love about this job.
36:05
Speaker 3: So I've started here, We're building the New World vertical,
36:08
Speaker 3: getting across a lot of this information. And what's coming
36:11
Speaker 3: across clear to me is people start to really care
36:14
Speaker 3: about their super when they hit the mid fifties, because
36:18
Speaker 3: in your mid fifties, you're thinking about we want to
36:20
Speaker 3: retire and what.
36:21
Speaker 1: Is that balance? What to do?
36:23
Speaker 3: And I think we have a real I don't know
36:25
Speaker 3: if it's an issue because I think there's a compulsory
36:27
Speaker 3: superannuation system was set up that there's now a lot
36:30
Speaker 3: of people are younger people who will have these balances
36:34
Speaker 3: going forward. But I do feel like there's this moment
36:37
Speaker 3: where we have to get people a little bit more
36:38
Speaker 3: interested and engaged because you can make all these little
36:42
Speaker 3: micro decisions along the way that can really reckon.
36:46
Speaker 2: And I've on evenly focused on it. I reckon because
36:47
Speaker 2: of this job.
36:48
Speaker 1: Yes, yes, well, And the other thing is people, Yeah,
36:52
Speaker 1: as you say, look, you can try all you like,
36:54
Speaker 1: but you know, when I was twenty five or thirty
36:57
Speaker 1: or probably thirty five. As for super, I didn't care.
37:03
Speaker 1: I did not care. I mean, to me, it was
37:04
Speaker 1: unimaginable that it would ever be an issue. As you say,
37:07
Speaker 1: I think around maybe when you have kids, well maybe
37:10
Speaker 1: when you have kids you sober up in so many ways,
37:13
Speaker 1: but you certainly sober up in terms of money, and
37:15
Speaker 1: you say, ooh gosh, I'm going to have to have
37:17
Speaker 1: money if I want to. You know, it's almost My
37:20
Speaker 1: approach had always been I want to have money because
37:23
Speaker 1: I want to get that out of the way. I
37:25
Speaker 1: just don't want it to be an issue. I don't
37:26
Speaker 1: want to be worrying about that. I don't want There
37:28
Speaker 1: are plenty of other things I want to do. I
37:30
Speaker 1: don't want it to be an obstacle because in my
37:32
Speaker 1: experience I often found that people it was people who
37:35
Speaker 1: actually didn't manage money very well that talked about it
37:38
Speaker 1: the most.
37:40
Speaker 3: Yeah, I think I come at it from a point
37:42
Speaker 3: of view of I'm a fiercely independent person. Anyone who
37:46
Speaker 3: knows me will tell you that. And I also so
37:49
Speaker 3: I feel like carry that with money habits in that
37:51
Speaker 3: I don't want to have to rely on anybody else.
37:53
Speaker 3: I don't want to have to rely on the government
37:55
Speaker 3: to provide a pension for me. Right, if they want
37:58
Speaker 3: to throw money my way, we can have a whole
38:00
Speaker 3: other conversation. I think there needs to be quite a
38:02
Speaker 3: big overhaul some of it, particularly that the middle class
38:05
Speaker 3: welfare that goes out. There's this sense I feel like
38:07
Speaker 3: we've bred entitlement, you know, through GFC and then the pandemic.
38:11
Speaker 1: This sent majority of every situation depends on the system.
38:15
Speaker 1: Two and a half many people get a pension.
38:17
Speaker 3: Yeah, I would like to be able to just be
38:19
Speaker 3: confident enough that we've got things sitting there.
38:21
Speaker 2: But I will say that I think you're right. I
38:23
Speaker 2: think in your twenties.
38:24
Speaker 3: Or thirties, it seems like it's this sort of it's
38:28
Speaker 3: not fake money, but because you don't get to see it,
38:29
Speaker 3: touch it, feel it, it gets quarantined. You can't touch it
38:32
Speaker 3: until you're back. When you're in your twenties, you feel
38:34
Speaker 3: like you have to be a real old person. And
38:36
Speaker 3: then you sort of, as you mentioned, you have kids,
38:38
Speaker 3: you get focused on it, but you've got to raise children,
38:41
Speaker 3: and you might then now be in a situation where
38:43
Speaker 3: your kids are a bit older. You've got aging parents,
38:46
Speaker 3: you need to look after them. The superannuation system, James,
38:49
Speaker 3: I think it's actually quite complex. It's simple but complex
38:52
Speaker 3: at the same time, it's not simple.
38:54
Speaker 1: It's it's absolutely battery in its complexities, and it's full
38:57
Speaker 1: of interns.
38:58
Speaker 3: Yeah, there's some simple there's some simple things you can do,
39:01
Speaker 3: but there's there's complexity of the system. And I think
39:03
Speaker 3: because it just seems all too hard and we're all
39:05
Speaker 3: too busy, then you just sort of push it in the.
39:07
Speaker 1: Yes it's too hard basket. But as you say, yeah,
39:11
Speaker 1: and certainly I think the irony is, of course, if
39:13
Speaker 1: you certainly get interested in fifty five. I don't want
39:16
Speaker 1: to say it's too late, but it's there is a
39:19
Speaker 1: danger that it's too late, because it's all about compounding
39:22
Speaker 1: and it's all about it's all about starting early. And
39:25
Speaker 1: that's one thing about the compulsitory system, which I by
39:27
Speaker 1: the way, I think twelve percent is too high, but
39:29
Speaker 1: because everyone must buy law, I do, yes, Why do
39:32
Speaker 1: you think it's too hot? I think at that point
39:34
Speaker 1: we are getting to a level where people should have
39:40
Speaker 1: more control of their own money. I think a compulsory
39:44
Speaker 1: system was good. I thought it was useful. I think
39:47
Speaker 1: it's climb too high at this stage. There's no way
39:49
Speaker 1: it should go any higher than this. There's still you know,
39:52
Speaker 1: there's still talk it was supposed to go to fifteen
39:54
Speaker 1: percent in the area and it's not. You know, I
39:56
Speaker 1: think in some ways there's all sorts of other things
39:59
Speaker 1: around it, that there are other issues that people should
40:02
Speaker 1: be able to spend their money on. Well, there's an
40:04
Speaker 1: element of sort of patriarchal sort of thing here. You know,
40:07
Speaker 1: we know what's good for you, but it is actually
40:10
Speaker 1: their money.
40:12
Speaker 3: It's more the what you want is these nest eggs
40:14
Speaker 3: at the end, right, you want to make sure that
40:16
Speaker 3: we have enough money?
40:17
Speaker 1: Yes, at the end?
40:19
Speaker 2: Gosh, where do we go?
40:20
Speaker 3: And all these conversations. I think there needs to also
40:22
Speaker 3: just be an overhaul of the oversight of Super. I
40:24
Speaker 3: think Super was set up as this retirement saving scheme
40:27
Speaker 3: and now it's what is it, four point two trillion
40:29
Speaker 3: dollars under management?
40:30
Speaker 1: That's right, with no regulator.
40:32
Speaker 3: We've seen the collapse of first Guardian and Shield and
40:35
Speaker 3: I honestly the pits of my stomach that's not going
40:37
Speaker 3: to be the last. And less governments and regulators start
40:39
Speaker 3: to really pay closer attention.
40:41
Speaker 1: There are the falling over each other. But the problem
40:43
Speaker 1: is there isn't actually someone, There is no single regulator
40:46
Speaker 1: charge with watching super and it's a four trillion dollar
40:49
Speaker 1: system anyway, So we digress.
40:51
Speaker 2: But so let's go back to I'm not in my fifties. Yeah,
40:55
Speaker 2: thank you for noticing.
40:58
Speaker 1: So what's look at you?
40:59
Speaker 3: So now now that I think, now that I'm thoroughly engaged,
41:03
Speaker 3: what should I be doing then with my super?
41:07
Speaker 1: Well, I really do think you should. Well, first of all,
41:10
Speaker 1: make off your mind how you want to live when
41:14
Speaker 1: you're older. Are you happy? You don't have to do anything?
41:17
Speaker 1: You can just you can have a government pension if
41:20
Speaker 1: you want it, I know, but it's there. So I
41:24
Speaker 1: think about how much should you have in super? Well,
41:26
Speaker 1: actually you don't have to have anything, right as a
41:27
Speaker 1: government pension that's not enough for most people. After that,
41:30
Speaker 1: then it's a question of how much do you want?
41:33
Speaker 1: I mean, I say, the twelve percent is I think
41:36
Speaker 1: the limit really on compulsory super. But having said that,
41:40
Speaker 1: I would have always contributed over and above the mandatory
41:45
Speaker 1: level because personally I wanted to have as much SUPER
41:47
Speaker 1: as possible in my.
41:50
Speaker 3: So now that makes more sense to me because I
41:52
Speaker 3: thought you were sort of advocating that we don't need
41:54
Speaker 3: to be saving as much as we did. It's more
41:56
Speaker 3: for you about the context. So it's like you should
41:58
Speaker 3: be in control of your money and where you're investing.
42:00
Speaker 1: Actually that's me. And again that was part of the
42:04
Speaker 1: thing with the South managed super fund for me. And
42:07
Speaker 1: I started it in two o six and I started
42:09
Speaker 1: it with sixty thousand dollars, which is approximately one fifth
42:13
Speaker 1: of the amount I would recommend that you start super
42:16
Speaker 1: Fun with today. How about that? Yeah, so there you
42:21
Speaker 1: are the confidence of it, which is the confidence of
42:23
Speaker 1: youth personally. I set it up because we were setting
42:26
Speaker 1: up a startup which was called Eureka Report, which you
42:30
Speaker 1: sit around and it was all about, well, the core
42:34
Speaker 1: of it was about self managed super funds for them,
42:37
Speaker 1: and I thought, if you're going to have a job
42:39
Speaker 1: like running a publication based on that, you should walk
42:42
Speaker 1: the talk. And so I started once so I could
42:45
Speaker 1: learn it and really know what it was when I
42:48
Speaker 1: wrote about it and that sort of thing, and that's
42:50
Speaker 1: why I did it. I had actually been involved in
42:52
Speaker 1: Big super I had actually been on the Fairfax super
42:55
Speaker 1: Fun board as a employee representative when I was a
43:00
Speaker 1: little baby reporter on BRW, I suppose it was. That
43:04
Speaker 1: was very interesting. It was really interesting to see how
43:08
Speaker 1: big super works. Yeah, and I learned a lot, and
43:11
Speaker 1: I learned a lot of its failings.
43:13
Speaker 3: Is the only reason I mean a big super fund
43:15
Speaker 3: is so I wanted to find a financial planner that
43:18
Speaker 3: was going to be fefa service. So I remember at
43:19
Speaker 3: the time, it was sort of two thousand dollars paid
43:21
Speaker 3: for someone to do that because I didn't want to
43:23
Speaker 3: be tipped into all these products because they were getting
43:24
Speaker 3: kickbacks and this. And we got this financial plan done up,
43:28
Speaker 3: and this advisor said, this fund will be a good
43:31
Speaker 3: fund for you with all the growth. You know, I'm
43:32
Speaker 3: paying someone for the advice. Great, and we set it
43:35
Speaker 3: all up and I have done nothing else.
43:40
Speaker 1: I was wondering where you're going to say that. I
43:42
Speaker 1: wonder how often that happens. People go into planners, they
43:45
Speaker 1: spend thousands, and they get in on the documents, they
43:47
Speaker 1: stick them in the drawer and go, yeah, we really
43:49
Speaker 1: should do that.
43:51
Speaker 2: It's on a USB stick.
43:53
Speaker 3: Then the insurances were connected to it. It always you know,
43:55
Speaker 3: it was very thorough at the time. Yeah, and then
43:59
Speaker 3: you know, we you know, we got on with life,
44:02
Speaker 3: we were on this journey. Then you know we're going
44:05
Speaker 3: on IVF journey and so that if you want to
44:07
Speaker 3: know where to go.
44:07
Speaker 2: And so this is what I'm trying to say.
44:10
Speaker 3: Why I think it's really exciting that we've set up
44:12
Speaker 3: the world vertical is I think there's a lot of
44:14
Speaker 3: people who are in a similar situation where life just
44:17
Speaker 3: gets hectic and chaotic and busy, and you try your
44:20
Speaker 3: best and you set things up, and then there's there's
44:23
Speaker 3: timeshe we think, Okay, I probably need to smarten up here,
44:25
Speaker 3: probably need to pay more attention to this.
44:28
Speaker 2: As you mentioned, James.
44:29
Speaker 3: Like, it's about what you want into the future, and
44:31
Speaker 3: I would like to have a really lovely retirement or.
44:34
Speaker 2: Even if I'm not retiring.
44:35
Speaker 3: So I do say to people one of the lessons
44:36
Speaker 3: I have from the rich list is I don't really retire.
44:40
Speaker 3: There's lots of people who could have retired very early
44:43
Speaker 3: and they don't. They found their passion and they work
44:45
Speaker 3: and all those sorts of things. So it's not necessarily
44:47
Speaker 3: about not working, but it's also working because you want
44:50
Speaker 3: to or you've got passions and those sorts of things.
44:52
Speaker 3: And being financially independent. I think that's at the core.
44:55
Speaker 1: That's terrific and I think that's what it's all about.
44:57
Speaker 1: That's what that verticul is all about. And folks, that's
45:00
Speaker 1: what the show is all about. The money puzzle. You know,
45:02
Speaker 1: Julian was talking about advice and by the way, get advice.
45:05
Speaker 1: Of course, get advice. Here's the thing. It costs on
45:09
Speaker 1: average three to four thousand dollars a year to get
45:11
Speaker 1: financial advice in Australia, and that is, by the way,
45:14
Speaker 1: a minimum figure because the number of advisors is shrinking rapidly.
45:18
Speaker 1: I mean there's only half the number there was ten
45:21
Speaker 1: years ago in the market. The point I'm making is
45:23
Speaker 1: that this show exists for you, and the people on
45:28
Speaker 1: this show are talking to me and talking to you
45:32
Speaker 1: through me on all aspects of investing and the listener
45:37
Speaker 1: questions we do every week. I get top advisors in
45:40
Speaker 1: to answer those questions. That's what the show is all about.
45:43
Speaker 1: It's about you and where you're going. And this article
45:46
Speaker 1: will be very much in the same area. And I'm
45:49
Speaker 1: hoping that if you do listen to the show, come
45:51
Speaker 1: and have a look at the vertical on the Australian.
45:53
Speaker 1: It launches today. It's something that has never been tried
45:56
Speaker 1: on the Australian or across financial media, and I think
45:59
Speaker 1: it's going to be really useful. All right. I think
46:02
Speaker 1: we might leave it there, Julia, and great to have
46:03
Speaker 1: you on the show.
46:05
Speaker 2: Okay, So I've got a laundry list here, so I
46:08
Speaker 2: need to go and fix up my super work on
46:11
Speaker 2: an investment property, probably build that share portfolio.
46:15
Speaker 3: Look, I think maybe in the journey, maybe I'm gonna
46:18
Speaker 3: have to do you know, the juliannesparrag diaries or something
46:20
Speaker 3: like that, like things that I've just learned from starting
46:23
Speaker 3: here and being focused more on the personal side of wealth.
46:26
Speaker 2: As you mentioned.
46:27
Speaker 3: So we've both been financed journals for the really long
46:29
Speaker 3: period time.
46:30
Speaker 2: You know this stuff.
46:31
Speaker 3: But you know better than the mechanic with the broken
46:33
Speaker 3: down car. You know I've got.
46:35
Speaker 1: The trick is to get started, isn't it. The trick
46:37
Speaker 1: is to get started, all right? Terrific. Now, folks, keep
46:41
Speaker 1: those emails rolling, love to see them. And as I said,
46:45
Speaker 1: if you're sending in a question, send in two or
46:47
Speaker 1: three at the same time. I love to see a
46:49
Speaker 1: couple of questions from the same listener. It makes a
46:52
Speaker 1: lot of sense. It's very efficient as well. The email
46:55
Speaker 1: is the money puzzle at the Australian dot com dot
46:58
Speaker 1: au talk to you soon.
47:01
Speaker 3: Only the fellnd sap of the wood s