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Transcript

The hunt for income heats up · The Money Puzzle

0:09
Speaker 1: Hello, and welcome to the Australian's Money What's atle podcast?
0:12
Speaker 1: I'm James Kirkby. Welcome forward everybody. It's a wide ranging
0:16
Speaker 1: show for you today and I think we've going to
0:18
Speaker 1: find it very useful as an active investor because we
0:20
Speaker 1: want to take a look at First of all, we're
0:22
Speaker 1: going to take a look at what just happened this
0:24
Speaker 1: week with a very big package of announcements in relation
0:28
Speaker 1: to financial advice and super funds and self managed super
0:32
Speaker 1: funds from the government in Canberra, which we won't tunnel
0:37
Speaker 1: through all that, but we will tell you what you
0:39
Speaker 1: need to know as an active investor.
0:41
Speaker 2: Okay.
0:41
Speaker 1: We're also going to look at income returns. How can
0:45
Speaker 1: you get a decent income return beyond cash and without
0:49
Speaker 1: going into private credit or on listed funds which are
0:54
Speaker 1: the big push inside the investment system at the moment,
0:58
Speaker 1: which may be fine for those who are prom voting it,
1:00
Speaker 1: but are they good for you. My guest today is
1:05
Speaker 1: ideally placed to comment and talk, I hope, on all
1:09
Speaker 1: these issues. It's Hugh Robertson of the Central Financial Services Group.
1:14
Speaker 2: How are you, Hugh, Hey, James, I'm good. How are
1:16
Speaker 2: you guard I'm good?
1:18
Speaker 1: Now, Hugh Folks is, as you would know, financial advisor,
1:21
Speaker 1: one of our Baron's top one fifty advisors. So Hugh
1:25
Speaker 1: cut to the chase, what do our listeners need to
1:29
Speaker 1: know about what the government just did. It seems to
1:33
Speaker 1: me there's a bunch of new called defenses but perhaps
1:39
Speaker 1: protections around for consumers and that's all fine, but you
1:42
Speaker 1: wouldn't call any of them supportive of the active investor.
1:47
Speaker 1: And again a lot of changes for big super which
1:51
Speaker 1: could be read in many ways, but also says they
1:53
Speaker 1: got their way on everything they wanted just about Yet again,
1:58
Speaker 1: what do you think.
1:59
Speaker 2: It could appear that way? So the changes that sort
2:02
Speaker 2: of got announced yesterday were interestingly they said that the
2:07
Speaker 2: industry funds and insurers can provide that intro fund advice.
2:12
Speaker 2: They did exclude the banks initially, which which might become
2:17
Speaker 2: a point of contention there. So we're waiting to see
2:20
Speaker 2: what will come out of there. And what they're going
2:22
Speaker 2: to do is sort of have a this might not
2:26
Speaker 2: be worded right, but a lower class of advisor that
2:29
Speaker 2: can give within.
2:30
Speaker 1: The Yes, new class advisor is what they're going to
2:34
Speaker 1: call them, which is basically an advisor that can work
2:36
Speaker 1: for the super fund and work within the restraints that
2:40
Speaker 1: have been outlined by Minister and Malino as opposed to
2:43
Speaker 1: a full scale advisor such as Hue As folks. Okay,
2:46
Speaker 1: so that's all fine if you go. If you're with
2:48
Speaker 1: a big fund and you need some elementary, crucial advice.
2:52
Speaker 1: Has been a bit ridiculous that they couldn't nud you
2:55
Speaker 1: in certain directions, and there will be allowed to do
2:57
Speaker 1: that now at its best. That's what it is. Okay.
3:00
Speaker 1: A few other things that are kind of deep industry issues,
3:02
Speaker 1: but I think for our listeners what really matters is that,
3:07
Speaker 1: first of all, okay, the big funds can give some
3:09
Speaker 1: more advice than they use too if you're in a
3:11
Speaker 1: big fund, or if you have money in both or
3:13
Speaker 1: interests in the big fund industry funds or any fund.
3:16
Speaker 1: By the way, that's some progress for the self managed
3:21
Speaker 1: super funds group. There's a couple of stings in there.
3:24
Speaker 1: I thought you. I mean, first of all, all the
3:26
Speaker 1: fees are going up and there's an extra new fee
3:30
Speaker 1: of twenty bucks per head for this compensation scheme of
3:33
Speaker 1: last resort. I mean, their every chance, let's put them
3:35
Speaker 1: to one side. But there's a couple of things I
3:38
Speaker 1: don't like the look of, and one of them is
3:41
Speaker 1: that in the interest of protecting consumers, and of course
3:44
Speaker 1: this is on the back of this terrible scandal around
3:48
Speaker 1: the first Guaragan group, they have instituted that the ATO,
3:53
Speaker 1: you must remember, is the regulator of self managed super funds.
3:56
Speaker 1: And that's debatable in the first case, but the ATO
3:58
Speaker 1: is the regulator, and if it doesn't like the look
4:00
Speaker 1: of an application to roll out of a big super fund,
4:04
Speaker 1: they can stop it. They never had that power before.
4:06
Speaker 1: That's new power for them. And the other power which
4:10
Speaker 1: I'm really intrigued what you might think of this year,
4:13
Speaker 1: is that they are introducing, and it has not been detailed,
4:17
Speaker 1: a test of the applicant whether they are suitably prepared
4:26
Speaker 1: to have a certain manner of super fund. I wonder
4:29
Speaker 1: what that is, and I wonder where it could go.
4:33
Speaker 2: It's going to be a very interesting application on how
4:38
Speaker 2: they actually test, because there's a lot of people that
4:40
Speaker 2: might just want to have their business real property, you know,
4:44
Speaker 2: the place that they run their business out of, in
4:46
Speaker 2: their self married super fund. Arguably, they don't have to
4:49
Speaker 2: be really sophisticated as investors to say that what we
4:52
Speaker 2: just want to own the building that you know, we're
4:55
Speaker 2: paying rent to someone else that's paid to ourselves. So
4:58
Speaker 2: and then that would be then because then we say,
5:03
Speaker 2: do people in normal wholesale or retail or even industry
5:06
Speaker 2: funds understand where they're being invested. So it does create
5:10
Speaker 2: a greater level of scrutiny, which probably again means you know,
5:14
Speaker 2: there's more more increasing costs to come to fund that somehow.
5:20
Speaker 2: And I just really hope some of all these changes.
5:23
Speaker 2: And I think there's a real challenge when you keep
5:25
Speaker 2: playing with superannuation, the people just stop using it.
5:29
Speaker 1: Yeah. Well, one of the things, I mean self managed
5:31
Speaker 1: super funds, folks, regardless of the bureaucracy around it or
5:36
Speaker 1: the rules around it, is and I am convinced of
5:39
Speaker 1: this thriving. And they're fifty thousand new funds coming in
5:43
Speaker 1: a year. They've never seen anything like that before. So
5:45
Speaker 1: I hope this doesn't stop that or stop you the listener,
5:48
Speaker 1: from considering self managed super fund if it is suitable
5:51
Speaker 1: to you. But what I wonder about you is, you know,
5:53
Speaker 1: there was there was a bit a few months ago
5:56
Speaker 1: about whether sophisticated investors should do a test, and it
6:00
Speaker 1: was kind of rejected that a test was in a
6:02
Speaker 1: ridiculous notion and unfair. But here we are, and if
6:05
Speaker 1: you want to start an SMSF, there's going to be
6:07
Speaker 1: a test.
6:08
Speaker 2: Now.
6:09
Speaker 1: I think the big thing is if it's a test
6:10
Speaker 1: which says, do you understand what a trustees responsibilities are?
6:13
Speaker 1: That's okay, all right, I mean you should know that.
6:16
Speaker 1: But if it's a little bit further than that, I
6:19
Speaker 1: what is your understanding of modern portfolio theory or whatever? Well,
6:23
Speaker 1: I'll tell you what you could easily this test could
6:26
Speaker 1: easily morph. Do you think the test could morph into
6:28
Speaker 1: something that would block people joining starting smsfs. That's the
6:31
Speaker 1: million dollar question.
6:32
Speaker 2: I think I had a call to the HO about
6:35
Speaker 2: my own self Pange super fund at one point in
6:38
Speaker 2: tom when I was setting it up, and this is
6:41
Speaker 2: in recent times, and the person on the other end
6:44
Speaker 2: of the phone did spend a long time. They didn't
6:46
Speaker 2: know what I did for a profession, but they did
6:48
Speaker 2: spend a considerable amount of time trying to ensure that
6:53
Speaker 2: I really understood a self Marne super fund and that
6:57
Speaker 2: you know, there were others suggested funds that they said
7:00
Speaker 2: that would do quite well for me. And I did
7:04
Speaker 2: tell our team at work. I said, that's very interesting
7:06
Speaker 2: that the ATO is telling just a person off the
7:10
Speaker 2: street that might not be appropriate for them.
7:13
Speaker 1: Yeah, is that advice?
7:15
Speaker 2: That was curious?
7:16
Speaker 1: The ETEO being the regulator, folks. The point I was making,
7:19
Speaker 1: of course, is that the fact is that the ETEO
7:22
Speaker 1: is both the regulator and the tax collector in this area.
7:27
Speaker 1: This is always been contentious and it would become more
7:30
Speaker 1: contentious as they have increased powers which they have Following this,
7:34
Speaker 1: the other thing I thought, again our listeners should know
7:37
Speaker 1: about is if you have a certain managed super funder
7:39
Speaker 1: review aspire to have one, you probably have an investment strategy.
7:42
Speaker 1: And the investment strategy is probably pretty vig because most
7:46
Speaker 1: people will tell your advisers will say, well, just don't
7:48
Speaker 1: rule yourself out from anything you wish to invest in.
7:51
Speaker 1: But it looks like they're getting more prescriptive on that.
7:53
Speaker 1: Have you had a look at that here or did
7:55
Speaker 1: you see that aspect of it?
7:57
Speaker 2: I know it's being talked about, and you know for
8:01
Speaker 2: a number of years that there would be blanket statements
8:04
Speaker 2: in investment strategies. You could have zero or one hundred
8:07
Speaker 2: percent in cash, you could have zero to one hundredcent
8:09
Speaker 2: in global equities. It may be that there's a little
8:12
Speaker 2: bit more, you know, with that rise and rise of
8:15
Speaker 2: self made super funds, might have been going to a
8:17
Speaker 2: lot more alternative investment strategies, you know, I know, you know,
8:20
Speaker 2: years ago when bitcoin was flying high, everyone was opening
8:23
Speaker 2: up in SMSF to get more exposure to that. Not
8:26
Speaker 2: that you or I would ever recommend that to people.
8:30
Speaker 1: Now that it's at sixty grand, that probably isn't as many.
8:32
Speaker 2: Yeah, yeah, not even as a contrarian, we'd look at it.
8:35
Speaker 2: But I think some of those things there is a
8:39
Speaker 2: bit of common sense to it. But again what to
8:42
Speaker 2: what level of detail? Because you still if someone wants
8:45
Speaker 2: to have a self made super fund and again that
8:46
Speaker 2: business real property example, you know that might be one
8:49
Speaker 2: hundred percent of their asset is the property. And I
8:52
Speaker 2: think as long as we can back it by is
8:55
Speaker 2: it in the client's best interest to those first sort
8:58
Speaker 2: of the tiers of what souper generation for is it's
9:01
Speaker 2: designed to provide a retirement nest egg that's going to
9:04
Speaker 2: give you an income streaming retirement. I think if it
9:07
Speaker 2: can kind of align with that, then it sort of
9:09
Speaker 2: makes sense.
9:10
Speaker 1: Okay, And what do you say to people who are
9:12
Speaker 1: I mean, this is really relevant for people who might
9:15
Speaker 1: be thinking of starting in the future. And as I say,
9:18
Speaker 1: it's fifty thousand year starting them. And we're assuming that
9:21
Speaker 1: you know what you're doing, folks, as opposed to the
9:23
Speaker 1: unfortunate victims of the Frost Cardoon affair. But what do
9:28
Speaker 1: you say in terms of the investment strategy? Is it
9:30
Speaker 1: like a one page or is it one hundred pages?
9:32
Speaker 1: What do you try to achieve in this when because
9:33
Speaker 1: every SMSF must have one when they starting, and it's
9:35
Speaker 1: probably very useful for people anyway to have a clear
9:38
Speaker 1: strategy on their portfolio, whether it's in super or not.
9:42
Speaker 2: Yes, one hundred percent. Goals of the fund? Is it
9:45
Speaker 2: to grow capital? Is it to brivide an income stream?
9:49
Speaker 2: Is it to protect capitalis to sort of a bit
9:50
Speaker 2: of the goals a bit of the asse allocation? What ranges?
9:55
Speaker 2: You know, what's our mutual position for cash, fixed interest, property,
10:00
Speaker 2: infrastructure as strained says in national shares how and what
10:05
Speaker 2: are our sort of allow allowable variances there? You know,
10:08
Speaker 2: if we say we want thirty percent noise the equities, okay,
10:11
Speaker 2: but we can go plus or minus ten percent either way,
10:14
Speaker 2: and I think that's just good hygiene as well, to
10:18
Speaker 2: make sure you're well diversified well.
10:20
Speaker 1: And is there a standard template here or do you
10:22
Speaker 1: find people really very around that.
10:25
Speaker 2: For the majority of clients that we've seen again with
10:29
Speaker 2: you know, they've had SMSF administrators, it's it is very
10:33
Speaker 2: template based. The value is in the conversation though, and
10:36
Speaker 2: making sure that annually you do. You know, everyone who's
10:39
Speaker 2: got an SMSF would know that they've got to sign
10:42
Speaker 2: off on investment strategy each year. But it is something
10:45
Speaker 2: that is actually worth reviewing. You know, your ASCID allocation
10:47
Speaker 2: is your biggest determiner of return, but and beyond investments,
10:51
Speaker 2: yet a lot of times they don't look at, you know,
10:53
Speaker 2: how much reallocate.
10:55
Speaker 1: It's probably really good for that, isn't it acid allocation?
10:58
Speaker 1: You get your acid allocation, right folks, As you know
11:01
Speaker 1: you win. Okay, So if you didn't have emerging markets
11:05
Speaker 1: last year, well gosh you missed them. If you didn't
11:07
Speaker 1: have gold the year before, well you'd have missed it.
11:10
Speaker 1: It was largely due to that issue of acid adication,
11:13
Speaker 1: which would probably be clearly articulated in an investment strategy.
11:17
Speaker 1: So it's a good idea. I just wanted to cover
11:18
Speaker 1: off on that, folks. The things that I were going
11:21
Speaker 1: to talk about today is something I come upon all
11:24
Speaker 1: the time where people say, look, I want income, I've
11:29
Speaker 1: got my cash. I know that residential yields are low,
11:33
Speaker 1: and they know the basics. Where else can I go?
11:37
Speaker 1: Where else can I go beyond the obvious? And the
11:40
Speaker 1: big push in investment markets is private credit and unlisted
11:44
Speaker 1: assets and alternatives. We want to have a look at
11:46
Speaker 1: what you can buy, what's out there that is not
11:51
Speaker 1: in that unlisted space. And we are talking to you
11:54
Speaker 1: on the week that Google came to town in the
11:57
Speaker 1: form of Alphabet and is shoot an enormous bond, the
12:03
Speaker 1: biggest we've ever seen in the corporate bond in Australia
12:07
Speaker 1: this week offering six percent. Just what I was thinking
12:11
Speaker 1: of back in a moment. Hello, Welcome back to the
12:24
Speaker 1: Australian's Moneys. James Kirby here with Hugh Robertson of the
12:28
Speaker 1: Center ce NTAU are Financial Services Group, and we're talking now, folks,
12:35
Speaker 1: are about how to get some decent income beyond the
12:39
Speaker 1: usual suspects. Okay, because for a long time, OBBC it
12:42
Speaker 1: was very easy. You had to combine chairs or whatever.
12:44
Speaker 1: They all did four and a half percent and you're
12:47
Speaker 1: franked up and you might a got to five or six.
12:49
Speaker 1: Were final and dandy, except that that isn't the case anymore.
12:52
Speaker 1: The dividend yield and the Australian Share Exchange dock exchange
12:56
Speaker 1: has dropped below four. Come back is below four. Some
13:00
Speaker 1: of the traditional sources are not there. I'm going to
13:04
Speaker 1: talk about beyond private credit, which I say is opaque
13:09
Speaker 1: and suit some people. But I want to talk to
13:10
Speaker 1: you about what's publicly and easily available to you, where
13:14
Speaker 1: you get six seven percent plus in a transparent way.
13:18
Speaker 1: And I think on this issue today, Hugh. On the
13:22
Speaker 1: same week that Google launches a six billion dollar corporate
13:27
Speaker 1: bond into the Australian market, which is a gigantic flow.
13:31
Speaker 1: We haven't seen anything like it. And guess what it
13:33
Speaker 1: was three times over subscribed, three times over subscribe, more
13:36
Speaker 1: than fifteen billion thrown at that bond. People really want income,
13:40
Speaker 1: So I know what I'm kind of reverse into this,
13:43
Speaker 1: But looking at that Google bond, or corporate bonds or
13:46
Speaker 1: global bond funds that are underpinned by corporate bonds, what's
13:52
Speaker 1: what's the deal there, h and that's six seven percent?
13:55
Speaker 1: Is that really reliable?
13:58
Speaker 2: Yeah, it's you know, when you're going into bond investments,
14:02
Speaker 2: you're sort of looking at your counterparty risk. We don't
14:05
Speaker 2: really see that there's much risk with someone like an alphabet,
14:09
Speaker 2: you know. Obviously they're really trying to raise a lot
14:12
Speaker 2: of capital to fund these these future AI projects and
14:16
Speaker 2: the like. It's it is interesting that they are coming
14:18
Speaker 2: to Australia, you know, and that's probably that they see
14:22
Speaker 2: this big pool of wealth that we've got. I know,
14:24
Speaker 2: we've got a heap of emails from that you know
14:27
Speaker 2: specialists this week saying, you know, would you like to
14:30
Speaker 2: participate in this and invest your clients money in this?
14:33
Speaker 2: So it makes sense that it's well over subscribed, and
14:37
Speaker 2: the I suppose the it shines light on the fact
14:42
Speaker 2: that you can get still really good yields out there
14:45
Speaker 2: outside and you know, the just get putting your money
14:48
Speaker 2: in an online saver or a term deposit or the
14:52
Speaker 2: private credit that we've sort of been a little bit
14:54
Speaker 2: cautious within our comments on the show, but it does
15:00
Speaker 2: invite the greater conversations. So okay, if we are trying
15:03
Speaker 2: to get a yield outside of those, what can we
15:05
Speaker 2: do and sort of what are we doing? I suppose,
15:08
Speaker 2: you know, even at a centaur level for our clients
15:10
Speaker 2: at the minute, so.
15:11
Speaker 1: I can put it on the table that we get
15:12
Speaker 1: six to seven percent on top notch corporate bonds in
15:16
Speaker 1: the funds like say the pin Global Fund, or on
15:20
Speaker 1: occasion where we have raisings directly in this market, like
15:22
Speaker 1: the Google raising this week, they're ranging from six to
15:25
Speaker 1: six point seven percent, folks, depending on the tenure that
15:28
Speaker 1: you take. And what's really interesting is that they're being
15:32
Speaker 1: lapped up and all the big financial advisory houses have
15:37
Speaker 1: been putting big bits in there for that material. That
15:40
Speaker 1: is why it's three times oversubscribe. So that's corporate bonds,
15:43
Speaker 1: maybe more commonly, hue a floating rate notes because they're fixed, right,
15:47
Speaker 1: those corporate bonds that Google one is fixed, right, So
15:51
Speaker 1: you're taking the chances. You're saying six percent is going
15:53
Speaker 1: to be really attractive in four years time, maybe it is.
15:56
Speaker 1: If you're floating rate notes, you'd remove that risk.
15:58
Speaker 2: Wodn't you?
15:58
Speaker 1: Could you explain notes like where they are, how to
16:02
Speaker 1: get them, and what they pay.
16:04
Speaker 2: Yeah, So, really good point, because the floating rate notes
16:08
Speaker 2: effectively going up and down with they've marked a margin
16:11
Speaker 2: above the cash rate effectively, and so as rates go
16:15
Speaker 2: up that the return will go up on that, and
16:18
Speaker 2: as rates go down, the return will go down, which
16:20
Speaker 2: effectively means that the capital value is going to stay still.
16:23
Speaker 2: We know with any fixed rate bond instrument that the
16:28
Speaker 2: interest rate prevailing market rate versus what you were getting
16:32
Speaker 2: will impact the capital value. But these floating rate ones
16:35
Speaker 2: are you know, more capital secure in that regard to
16:37
Speaker 2: interest rate well less in straight sensitive on the capital value.
16:41
Speaker 2: And right now you're looking at you know, around five
16:44
Speaker 2: point one, and those you can access them through ETFs
16:47
Speaker 2: exchange traded funds, so it's an easy access point. Yet
16:50
Speaker 2: five point one, there's ones out there that pay monthly,
16:54
Speaker 2: so you can get it in and out when you
16:56
Speaker 2: like reasonable income. I suppose one of one of the
16:59
Speaker 2: traps that we've seen for clients is they might go
17:01
Speaker 2: in a you know that some of the bank's online
17:03
Speaker 2: savings accounts.
17:05
Speaker 1: Yeah, so I was just going to see and you
17:06
Speaker 1: can get five percent there a government guarantees.
17:09
Speaker 2: And a lot of some of those are only for
17:11
Speaker 2: four months, and then you might go down to a
17:12
Speaker 2: different rate so if you're going to play with the banks,
17:16
Speaker 2: you've just got to be careful. There's a few that
17:17
Speaker 2: are genuine and offering good ones, but you've just got
17:21
Speaker 2: to be careful that you're not sort of going into
17:22
Speaker 2: one of those promotional products that a bank offers.
17:25
Speaker 1: I suppose.
17:26
Speaker 2: Yeah, Well, and we've seen clients are just inadvertently with
17:29
Speaker 2: one of the you know, some of the big banks
17:31
Speaker 2: aren't really offering that great a rate on the normal
17:34
Speaker 2: savings account, so it might revert from a five to
17:36
Speaker 2: a lessoner too, and pretty pretty lousy out come.
17:40
Speaker 1: You it's a stinker that. Yeah, and as you say,
17:43
Speaker 1: you can't pluve that they were duped, but people and
17:46
Speaker 1: it says five percent.
17:47
Speaker 2: Yeah, once they passed the SMSF trustee exam, they will
17:51
Speaker 2: know that you've then got if they pass you. If
17:54
Speaker 2: they passed, you've then got. The stuff that we've talked
17:58
Speaker 2: about within our Investment committee lately is you've got a
18:02
Speaker 2: pretty good yield over in US government bonds. You know,
18:04
Speaker 2: that's the rates are, you know, around five bit over
18:09
Speaker 2: and that's a really good rate of interest to lock
18:13
Speaker 2: in your long term return. If you look at some
18:15
Speaker 2: of the biggest global bond fund majors in the world
18:17
Speaker 2: right now, that yield to maturity if you enter into
18:21
Speaker 2: their you know, their bond funds. Now, I just looked
18:24
Speaker 2: online before one of the leading product providers at seven
18:26
Speaker 2: point six three percent. So that means if all those
18:30
Speaker 2: contracted bonds pay what they're contracted to pay, you know,
18:35
Speaker 2: seven point six to three is a really good yield.
18:37
Speaker 2: And a lot of those global fixed interest funds are
18:41
Speaker 2: also currency hedged, so you don't have the risk there,
18:45
Speaker 2: so you can get a good rate of return there
18:47
Speaker 2: for clients. Something that clients haven't looked at because remember
18:50
Speaker 2: we've had such capital volatility. As interest rates are on
18:54
Speaker 2: the way up, a lot of clients won't look at
18:56
Speaker 2: it anymore. But we would definitely challenge clients to say,
18:59
Speaker 2: start looking at the national fixed interests again, given the
19:02
Speaker 2: shape of interest rate in the future, forecasts of where
19:05
Speaker 2: interest rates could be.
19:07
Speaker 1: So just to clarify a few things for listeners, you
19:11
Speaker 1: when you keep talking about the forecast, you're assuming what
19:14
Speaker 1: that rates go up.
19:16
Speaker 2: We're assuming that rates are going to either hold or
19:18
Speaker 2: start to go down.
19:19
Speaker 1: Okay, all right in the medium term, yes, yeah, okay,
19:24
Speaker 1: And that is a global picture I suppose.
19:26
Speaker 2: Global picture and that that would help existing bonds that
19:30
Speaker 2: are lot in at a higher interest rate, and that
19:33
Speaker 2: that would hurt. And this is where it's good. If
19:35
Speaker 2: you had a little bit of that and the floating rate,
19:39
Speaker 2: even as your floating rate bond interest yield might come down,
19:44
Speaker 2: you would then be able to have you know, the
19:46
Speaker 2: capital value go up in your global fixed interest product,
19:50
Speaker 2: so that that way to spread risk. And then you've
19:54
Speaker 2: got the one thing that we've talked about with these
19:57
Speaker 2: government changes and the budget changes. Philights might not be
20:00
Speaker 2: in the Australian markets for growth going forward and they
20:03
Speaker 2: might want to get more income. And so in there,
20:05
Speaker 2: you know the stuff that you can look at and
20:08
Speaker 2: you commented on CBA before and the traditional high yield
20:13
Speaker 2: products now because share prices have gone through the roof,
20:16
Speaker 2: you know you looking at high yield Australian share products,
20:20
Speaker 2: so they're just for you know, share companies that are
20:23
Speaker 2: paying better than average dividends is only about four point
20:25
Speaker 2: three two at the minute, but a strategy that I
20:28
Speaker 2: think will rise in prominence a little bit more. I
20:31
Speaker 2: think we're going to get more innovative in our investment
20:34
Speaker 2: products in the Australian space, but dividend harvesting, so that
20:38
Speaker 2: now is looking at giving about seven point one percent
20:42
Speaker 2: as a gross dividend, and that's you know, they're really
20:46
Speaker 2: looking at the product providers here are really looking at
20:49
Speaker 2: the time and of when dividends get paid and how
20:52
Speaker 2: to hold the dividend, hold this company long enough to
20:55
Speaker 2: get your franking credits.
20:57
Speaker 1: Have to optimize the whole thing that people used to
20:59
Speaker 1: try and do for maybe we could try and recap.
21:01
Speaker 1: Then you what we're saying to listeners is and in
21:05
Speaker 1: this world where you're looking for higher income and maybe
21:08
Speaker 1: you are also concentrating your income activities, if you like,
21:11
Speaker 1: in the local market, because we've just had big tax
21:14
Speaker 1: changes that tax income more leniently than growth. You would
21:19
Speaker 1: start by saying, well, the dividend yield has gone under
21:21
Speaker 1: four percent, so that's so you're looking more broadly. We
21:25
Speaker 1: mentioned floating rate notes that they're coming in something in
21:28
Speaker 1: the order of five percent. Then we're talking about corporate
21:31
Speaker 1: bonds and corporate bond funds and they were doing six
21:34
Speaker 1: and seven percent. We talked then also at the end
21:39
Speaker 1: about what they call high These are quite obvious, folks.
21:42
Speaker 1: There's two big ones, and I'm not plugging them, but
21:44
Speaker 1: there's two that come to mind. One is Plato's High
21:47
Speaker 1: Dividend found and the other is the Wilson High Dividend Fund.
21:50
Speaker 1: They're slightly different. You got to look at each one
21:52
Speaker 1: of them, and there are others and there will be
21:53
Speaker 1: more coming. But as Hugh was saying, these are funds
21:57
Speaker 1: that literally the entire mechanics of them is designed to
22:02
Speaker 1: squeeze out the maximum from our relatively high dividend pain
22:06
Speaker 1: local share market through all sorts of games that they do,
22:10
Speaker 1: which are all entirely legit. How they do that in
22:13
Speaker 1: terms of timing and optimizing and again squeezing theenominal franking,
22:17
Speaker 1: and they can come in at around seven percent, Hue,
22:19
Speaker 1: Is that right? So we've got four, five, six, seven.
22:21
Speaker 1: We've got a ladder there for you folks, for the
22:24
Speaker 1: average listener, the everyday listener. Some of that's easily accessible, okay,
22:29
Speaker 1: like the high dividend funds are accessible on the ASIX.
22:34
Speaker 1: What about the accessibility of the other parts of that
22:39
Speaker 1: we were talking about. There are they easy to get?
22:42
Speaker 1: How do people access them?
22:43
Speaker 2: All of those are available via ATF exchange funds, So
22:48
Speaker 2: you know, you're seeing this prolification of managed funds, traditional
22:53
Speaker 2: manage funds now opening onto you know, the same product
22:57
Speaker 2: effectively now been via the Shange trade and fund mechanism.
23:01
Speaker 1: So the global bond fonds, you can get on itio okay.
23:04
Speaker 1: And what about the floating retinos okay, right, yeah, so
23:09
Speaker 1: it's all there. Actually it's actually there, but that happened
23:12
Speaker 1: to go into specialist progress.
23:13
Speaker 2: Yeah, and this has been the great thing, you know,
23:15
Speaker 2: with all the money that's in the superannuation, in the
23:17
Speaker 2: retirement system, the product is evolving. So that's what worked
23:21
Speaker 2: yesterday won't work tomorrow. You've got to make sure you're
23:25
Speaker 2: really going in there and having a look at what
23:27
Speaker 2: is available. Because the one thing we're very conscious of,
23:30
Speaker 2: you know, is especially for retirees, the cost of living
23:34
Speaker 2: is going up and up. So the difference between you know,
23:37
Speaker 2: leaving money earning six or seven or three and four's
23:42
Speaker 2: it's a big difference if you do that for a
23:43
Speaker 2: number of years. So you've got to we've just got
23:46
Speaker 2: to make sure that we get every dollar working, even
23:49
Speaker 2: sort of the non sexy cash and fixed interest money.
23:52
Speaker 2: We've got to make sure that's working for clients as well.
23:54
Speaker 2: Not just worrying about you know, do we get in
23:56
Speaker 2: the video or SpaceX?
23:58
Speaker 1: Yeah, folks, hear Hugh. Okay, watch that cash you have?
24:03
Speaker 1: What are you getting on that cash? I mean, Ansie,
24:05
Speaker 1: you should be getting four or five percent on that cash.
24:06
Speaker 1: If it's in an Australian bank getting nothing? Well, why
24:09
Speaker 1: is it there? Does it all need to be there?
24:12
Speaker 1: These are fairly elementary things which are sort of like
24:14
Speaker 1: the starting point, and then the finishing point is the
24:17
Speaker 1: more i won't say exotic, but more advanced ways we
24:20
Speaker 1: to sort of illustrated. I hope for you to find
24:23
Speaker 1: hire income in this market where income has become a
24:26
Speaker 1: major focus. I've got lots of questions. I've collected them,
24:30
Speaker 1: I've waited for you to be on. We're going to
24:32
Speaker 1: deal with them in a moment. Stay with us. Hello,
24:49
Speaker 1: Welcome back to The Australian's Money Puzzle podcast. I promise
24:52
Speaker 1: I'll catch up with some questions. Keep the questions rolling.
24:55
Speaker 1: I love the questions. They have all sorts of shapes
24:57
Speaker 1: and sizes. There is no such thing, my friend. This
25:00
Speaker 1: is a stupid question, only stupid answers. We learned that
25:03
Speaker 1: in journalism. One oh one. Okay, first, questions from Francis,
25:07
Speaker 1: is retirement the right time to wind off my SMSF?
25:11
Speaker 1: Should I wait until I retire? I think for Francis
25:14
Speaker 1: who could be Francis could be male or female? Means
25:17
Speaker 1: is they're thinking of finding up their self a super fund?
25:23
Speaker 1: Is it better to do it just before you retire
25:25
Speaker 1: just after? Is there a clear line on that? One?
25:27
Speaker 2: You one hundred percent after you retire. That way you
25:31
Speaker 2: can go into pension phase and everything goes from that
25:34
Speaker 2: fifteen percent tax on earnings, ten percent tax on growth
25:38
Speaker 2: if you've held the asset for more than twelve months
25:41
Speaker 2: into the nil income and nil coupital gains tax environment.
25:45
Speaker 1: Is that the clickable if someone had a year togo
25:47
Speaker 1: or five years ago, is there any sort of rule
25:49
Speaker 1: on that?
25:50
Speaker 2: Yeah? And the though and if it was a capacity
25:56
Speaker 2: issue and there was two members, you might then just
25:59
Speaker 2: go to a corporate trustee. Yes, right as that just
26:03
Speaker 2: as an administrative.
26:05
Speaker 1: What I meant was just to sort of pick up
26:06
Speaker 1: on the nature of the question. Is there a time
26:09
Speaker 1: frame like if someone had six months to go, should
26:12
Speaker 1: they definitely wait for an SMSF sorry for their retirement
26:15
Speaker 1: or if they had six years to go? Was it different.
26:17
Speaker 1: So is there a ton of is there a runway?
26:20
Speaker 2: Yeah, great question. Actually, if you had a private market
26:25
Speaker 2: asset or something that had it would depend on the asset.
26:28
Speaker 2: If you'd had something that had gone up in value,
26:31
Speaker 2: you know, enormously, then you might sell because that that runway,
26:35
Speaker 2: you know, that six year window if there's some uncertainty
26:37
Speaker 2: about what the value would be. But you've just got
26:39
Speaker 2: to be aware that you're going to have that tax
26:41
Speaker 2: constraint of a fifteen or ten percent tax on the
26:44
Speaker 2: earning on the growth, whereas if you're get into pench
26:47
Speaker 2: your phase, it's nil and nil. So it's you don't
26:50
Speaker 2: have to wind it up at retirement. You can run
26:53
Speaker 2: it through your retirement and the majority of clients do.
26:58
Speaker 2: But what we would see is definitely as people either
27:00
Speaker 2: lose the spouse or as they start to get older
27:03
Speaker 2: than that that reason for winding up makes a lot
27:06
Speaker 2: more sense.
27:07
Speaker 1: Okay, all right, So I hope that's useful to your
27:09
Speaker 1: Francis if it sounds like if it's a close run thing.
27:13
Speaker 1: Just for simplicity's sake and organization, it's just that you're
27:16
Speaker 1: in the retirement phase. Pension phase would make it easier
27:19
Speaker 1: I mean very broadly, and this is not advice, it's
27:22
Speaker 1: information only. I hope that's useful. Ben says, if one
27:25
Speaker 1: of the benefits of trusts is income spitting, why not
27:29
Speaker 1: make this more accessible for normal people rather than having
27:33
Speaker 1: to do financial gymnastics. Yeah. Well, Ben, there's no rules
27:38
Speaker 1: on who can use trusts. Anyone can use them. It's
27:42
Speaker 1: whether they are suitable to you, useful to you, and
27:46
Speaker 1: you get bang for your buck with them. They're not
27:48
Speaker 1: as good as they used to be. Are They're not
27:50
Speaker 1: going to be as good as they used to be
27:52
Speaker 1: because the Treasurer put in a very clever single line
27:56
Speaker 1: on the budget which said, oh and by the way,
27:58
Speaker 1: minimum thirty percent family trust from now on. So look
28:02
Speaker 1: very broadly. You do you think you'll be doing less
28:06
Speaker 1: of them? One?
28:08
Speaker 2: Yeah, people utilize companies going forward more so.
28:13
Speaker 1: The company structures are a company because it pays thirty
28:17
Speaker 1: percent as well? Is that it?
28:19
Speaker 2: And I think we've said that the government's effectively saying
28:22
Speaker 2: the best tax rate we're going to get outside of
28:23
Speaker 2: super is thirty percent going forward on a passive vehicle.
28:27
Speaker 2: So yeah. The tragedy of it is, you know, for
28:32
Speaker 2: the people that are in trust if they have, you know,
28:35
Speaker 2: a low income earner there. You know, you definitely don't
28:38
Speaker 2: want to be distributing to them where it's going to
28:41
Speaker 2: be thirty cents in the dollar if they've got a
28:43
Speaker 2: marginal attack rate less than that.
28:45
Speaker 1: Yes, of course, one thing about the trusts and the
28:49
Speaker 1: whole shift towards that you see people would also use
28:52
Speaker 1: companies on a simpler level. I wonder does it sort
28:55
Speaker 1: of reinforce the residual attractions of Super.
29:00
Speaker 2: Well, oh, you'll get me started on my high horse.
29:04
Speaker 2: We have if we can have confidence in the superannuation
29:07
Speaker 2: system that they won't change the rules one hundred percent.
29:11
Speaker 2: Superannuation should be everyone's number one vehicle for savings. But
29:15
Speaker 2: you know, if you're probably in that window of fifty three,
29:20
Speaker 2: you know, fifty five, you've probably got less legislation risk.
29:24
Speaker 2: If you're forty, it's a bit difficult to say, well,
29:26
Speaker 2: I really want to optimize this because people are scared
29:29
Speaker 2: that the government will change the handshake and make it
29:32
Speaker 2: maybe a sixty five access age or a seventy access age.
29:36
Speaker 2: So that's we need more confidence in our system.
29:40
Speaker 1: Look, I would count of that and say that Super
29:43
Speaker 1: has survived for thirty years, and it is the best
29:48
Speaker 1: tax chanter and we're sort of model for the world
29:52
Speaker 1: apparently with our super system. So I don't think it
29:56
Speaker 1: will be chopped up or greatly downloaded, but I do
29:58
Speaker 1: think it will be tinkered with by every government in
30:01
Speaker 1: every budget for the rest of your life. So folks,
30:03
Speaker 1: whatever age you are, twenty one, forty one, it doesn't matter.
30:05
Speaker 1: Just assume that's the way it goes. Right. It's not
30:07
Speaker 1: setting stone because guess what, the world changes around super
30:12
Speaker 1: and so it can't be expected to remain not changed.
30:14
Speaker 1: I know, Hugh, you'd love the rules to be set forever,
30:17
Speaker 1: but they won't be. I think, okay, Melanie, if I
30:21
Speaker 1: want to participate in a dividend reinvestment scheme, how is
30:25
Speaker 1: the CGT a portioned if and when I sell the shares?
30:29
Speaker 1: Or example, if I was to own one hundred chairs
30:32
Speaker 1: in a company, are to budget night and acquire ten
30:34
Speaker 1: shares post budget, are these ten shares treated differently for
30:38
Speaker 1: tax purposes? I hope this makes sense as Melanie, and Gee,
30:42
Speaker 1: I couldn't blame you, Melanie, your question makes sense. It's
30:46
Speaker 1: the tortuous mechanics of CGT and how it's supplied that
30:51
Speaker 1: everything's theoretically bought and sold and changes on July one,
30:54
Speaker 1: et cetera. But is there an understandable answer you can
30:59
Speaker 1: give Melanie you.
31:04
Speaker 2: Yes, it's yeah, So I agree, and I'm sorry Melanie
31:09
Speaker 2: that you've got to go through this so that the
31:12
Speaker 2: hundred shares in company ex prior to budget night and
31:15
Speaker 2: then prior to the changes are going to be under
31:17
Speaker 2: the traditional method.
31:20
Speaker 1: Percent fifty percent discount after one year.
31:23
Speaker 2: And then our inflation afterwards post budget are still going
31:28
Speaker 2: to be under the the old regime, and then with
31:35
Speaker 2: the DRP, all of those posts have their own cost
31:40
Speaker 2: base dates, so when you get them going forward, you know,
31:43
Speaker 2: and past all the changes, they will be subject to
31:46
Speaker 2: the new rules. But what you've got prior to when
31:48
Speaker 2: the change is alive will be assessed as at that
31:52
Speaker 2: thirty June date, and then going forward will be.
31:56
Speaker 1: So there's there's no exceptions. Basically, if you have your hundred,
31:58
Speaker 1: if you have a thousand shares and you're rio and
32:01
Speaker 1: in sometime after the introduction date and I want you
32:07
Speaker 1: get ten more, those ten are in the new system.
32:09
Speaker 1: Simple as that. Whether it was a d RP, no
32:11
Speaker 1: one's listening as far as i'm concerned. It's this is shares,
32:15
Speaker 1: this is growth and shares acquired after the date, and
32:17
Speaker 1: so it has the new CGT regime. Is that how
32:20
Speaker 1: it works? Yes, yes, okay, I hope that's useful to
32:23
Speaker 1: your Melanie.
32:24
Speaker 2: But keep doing the it's a great long term wealth
32:26
Speaker 2: creation tool.
32:28
Speaker 1: Really funny you say that because you just said about
32:31
Speaker 1: the dividend harvesting funds and how and they're great.
32:36
Speaker 2: Right.
32:36
Speaker 1: So someone says, okay, here's the fund and it's an
32:38
Speaker 1: Australian high dividend play and promises me seven percent and
32:41
Speaker 1: there's all sorts of things behind the scenes, and I
32:43
Speaker 1: don't care what they do. They just get it and
32:44
Speaker 1: it's legally okay. Now, someone else on the show said,
32:48
Speaker 1: those are the very same people who are undermining the
32:50
Speaker 1: original attractions of DRP. You don't seem to be that
32:54
Speaker 1: worried about that. No, okay, you like the DRP B
33:00
Speaker 1: that's why.
33:02
Speaker 2: It's simple, and yes, unless you're going to get it
33:04
Speaker 2: paid paid if you've got a home loan, great paid
33:07
Speaker 2: into not financial advice, but paid into your homeland. And
33:10
Speaker 2: then read draw and invest or if you want to
33:13
Speaker 2: reallocate your portfolio because you're too top heavy in a
33:16
Speaker 2: CBA an you would you know, don't PARTI spend DP
33:19
Speaker 2: but we always want to keep that whenever we get
33:23
Speaker 2: you know, I'm Warren Buffett school of thought compound interest.
33:26
Speaker 1: So yeah, I like it too, and I like the discipline.
33:28
Speaker 1: It's the discipline, you know. Okay, so you didn't go
33:31
Speaker 1: into the d orp and you got your little check
33:33
Speaker 1: for whatever it was, ten bucks, A thousand boos doesn't matter.
33:36
Speaker 1: Ten thousand books. What's you do with it? Why did
33:38
Speaker 1: you do with it on the day?
33:40
Speaker 2: Well?
33:40
Speaker 1: You efficient enough? And isn't it nice when you see
33:42
Speaker 1: that you actually started out with ten thousand chairs or
33:45
Speaker 1: a thousand chairs, and it's grown so and ideally obviously
33:48
Speaker 1: the capital, the price of the share has grown, and
33:51
Speaker 1: the number you have has grown. It's got a lot
33:53
Speaker 1: to recommend it. Yeah, I quite like you learned thinking Hugh.
33:57
Speaker 1: All right, Sarah, this is great. We've got two more.
33:59
Speaker 1: Keep with us. Once on the CGT and so is
34:04
Speaker 1: the other Sarah, with fifty CGT discount method, Now terminate
34:10
Speaker 1: our investment bonds better for returns over an ETF or
34:13
Speaker 1: a share portfolio, especially if we're in a high tax market. Soara,
34:17
Speaker 1: we have covered investment bonds and recent shows have a
34:19
Speaker 1: look the people who'd ever like them I've softened, and
34:25
Speaker 1: that might include you. I'll story you.
34:28
Speaker 2: No, there's there's a definite softening. Mm hmm.
34:31
Speaker 1: They're relatively more attractive than they were. Could you explain why.
34:35
Speaker 2: One hundred percent an internally taxed product at thirty percent?
34:39
Speaker 2: So if you're going to invest in any in your
34:42
Speaker 2: personal name for your kids and your highest marginal tax rate,
34:47
Speaker 2: you know, one hundred dollars, take out forty five plus
34:50
Speaker 2: your two forty seven cents in the dollar tax. You
34:53
Speaker 2: end up with fifty three the one hundred dollars you
34:56
Speaker 2: know earnings in a bond. Then you walk away with
35:00
Speaker 2: seventy dollars. So again you can compound, you can take out.
35:04
Speaker 2: There are if there is something for kids education specifically,
35:09
Speaker 2: there are you know, education bonds, which again something that
35:13
Speaker 2: people haven't really looked at traditionally but now are starting
35:17
Speaker 2: to come back invout in vogue a little bit, I
35:20
Speaker 2: would say, judging by the amount of emails that we're
35:22
Speaker 2: starting to get as advisors from these providers, so definitely
35:26
Speaker 2: worth exploring for the future home deposits. I do like
35:30
Speaker 2: that if you're going to take sort of the rent
35:31
Speaker 2: vesting approach. You know, I'm not sure you're making much
35:35
Speaker 2: difference between what you're paying rent versus what your principal
35:38
Speaker 2: and interest repayments would be. But and that difference to
35:41
Speaker 2: invest again, it is CGT three after ten years. But
35:46
Speaker 2: every year you do pay you know, you do pay
35:49
Speaker 2: the internal tax rates. Remember if you're if you held
35:53
Speaker 2: we'll pick on CBA shares for a second, those shares
35:56
Speaker 2: and you did nothing that's going to compaun You're not
35:59
Speaker 2: going to pay any tax on that at all until
36:01
Speaker 2: you sell, unless on the gains, whereas in your bond
36:05
Speaker 2: you that ten percent can go down to seven percent. Yeah,
36:09
Speaker 2: so that's one of the reasons why his advisors we've
36:13
Speaker 2: always been a little bit critical. But there is a
36:16
Speaker 2: lot of product innovation in that space, so it's definitely
36:18
Speaker 2: worth looking at.
36:19
Speaker 1: Yeah, they're getting better. People didn't like them there. So basically,
36:22
Speaker 1: folks here, for someone on a salary, there's very little left.
36:25
Speaker 1: I mean, negative gearing has gone really effectively because it
36:28
Speaker 1: can only do new property and outside of super there's
36:31
Speaker 1: the very few things for this for the everyday salary earner.
36:34
Speaker 1: Here's one of the investment on. It is a tax
36:36
Speaker 1: protected vehicle. It really works if you hang on for
36:40
Speaker 1: ten years and you get the advantage of this lower
36:44
Speaker 1: tax rate. Basically coming out the other end of the product.
36:47
Speaker 1: It's it's just a kind of an enhanced way to
36:49
Speaker 1: save and does suit some people and has become relatively
36:53
Speaker 1: more attractive, Sarah, because the other areas have become less attractive,
36:59
Speaker 1: such as negative gearing for instance. Okay, final questions from Phil,
37:03
Speaker 1: this is really good. Suppose there is a low income
37:06
Speaker 1: earner with the income in the fifteen percent tax bracket.
37:11
Speaker 1: He has a flutter on the ASX and shows a profit.
37:14
Speaker 1: If he sells out within a year, the gain is profit,
37:17
Speaker 1: which is taxabilities margin at a rate fifteen percent. If
37:21
Speaker 1: he holds the shares for more than a year, the
37:23
Speaker 1: gain is CGT and it's subject to a thirty percent
37:27
Speaker 1: tax rate. Surely this can't be right, Phil. You are
37:33
Speaker 1: have hit upon what they call the unintended consequence of
37:35
Speaker 1: which there are dozens across the system since the budget
37:41
Speaker 1: changes on CGT, negative gearing and self managed super funds
37:45
Speaker 1: and family trusts. Is this is the other right track there, Hugh, Yes,
37:51
Speaker 1: that is the case. That's staff done.
37:54
Speaker 2: MM hm, and unless they're on a government support payment
37:58
Speaker 2: of some sort, and then then the thirty percent minimum
38:03
Speaker 2: you doesn't apply.
38:05
Speaker 1: Yeah, but the thirty minimum is there's no exceptions, right, Yeah.
38:11
Speaker 2: There there is a lot of unintended consequences to these sides.
38:16
Speaker 1: There is, and to be honest, they may be much
38:18
Speaker 1: more severe than the hypothetical that Phil has put out there.
38:22
Speaker 1: And you alluded to some of them earlier, and they
38:23
Speaker 1: show you and they will reveal themselves as we go forward.
38:27
Speaker 1: I think, folks, that is enough for this show. That
38:30
Speaker 1: was quite a whirlwind tour as I always put Hugh
38:32
Speaker 1: through these paces on this show, and we covered so much.
38:35
Speaker 1: I hope it was useful to you.
38:37
Speaker 2: I think just.
38:39
Speaker 1: Looking back over it, the Milino statements, if you need
38:41
Speaker 1: to know what happened, Look, the main thing is that
38:43
Speaker 1: self managed super funds are a little bit more expensive,
38:45
Speaker 1: they're a little bit more tightly regulated. That was bound
38:48
Speaker 1: to come off the back of the Frusca Guardian scandal.
38:51
Speaker 1: I think broadly it's not going to stop the people
38:54
Speaker 1: who should open super funds from doing so. And if
38:57
Speaker 1: you have to have a clear investment strategy, that's probably
38:59
Speaker 1: not bad thing. I love your guided tour of interest
39:05
Speaker 1: options in the market, and I hope everybody who's interested
39:08
Speaker 1: in that takes a deeper dive on that one.
39:09
Speaker 2: Folks.
39:10
Speaker 1: Don't just turn around and by the first fun put
39:12
Speaker 1: in front of you by someone you've never heard of,
39:14
Speaker 1: you know, promising a high rate to do it systematically,
39:17
Speaker 1: take it carefully. Okay, thank you, Hugh. Great to talk
39:20
Speaker 1: to you, Hugh Robertson.
39:21
Speaker 2: Thank you very much, James. Always a pleasure.
39:24
Speaker 1: That was Hugh Robertson sent to our financial services. Okay,
39:28
Speaker 1: let's have some emails as the money puzzle at the
39:30
Speaker 1: Australian dot com dot au. The questions can be on
39:33
Speaker 1: anything you like, Folks. They don't have to be quite
39:35
Speaker 1: as pointed as some of those questions today. But I
39:38
Speaker 1: will deal with any question I get. I promise. Okay,
39:41
Speaker 1: talk to you soon. Today's show wants to produced by
39:44
Speaker 1: Dapping to you
40:02
Speaker 2: As