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An Investor's Guide to Tax Time · She's On The Money

• 0:00
  Speaker 1: Hello, my name's Santasha Nabananga Bamblet. I'm a proud yr
• 0:04
  Speaker 1: the Order Kerni Whoalbury and a waddery woman. And before
• 0:08
  Speaker 1: we get started on She's on the Money podcast, I
• 0:11
  Speaker 1: would like to acknowledge the traditional custodians of the land
• 0:14
  Speaker 1: of which this podcast is recorded on a wondery country,
• 0:18
  Speaker 1: acknowledging the elders, the ancestors and the next generation coming
• 0:22
  Speaker 1: through as this podcast is about connecting, empowering, knowledge sharing
• 0:27
  Speaker 1: and the storytelling of you to make a difference for
• 0:30
  Speaker 1: today and lasting impact for tomorrow.
• 0:33
  Speaker 2: Let's get into it.
• 0:34
  Speaker 3: She's on the Money, She's on the Money.
• 0:57
  Speaker 2: Hello, and welcome to the new financial year.
• 1:01
  Speaker 4: Gotcha, and welcome to She's on the Money, the podcast
• 1:03
  Speaker 4: for manials who want financial freedom. Victoria Devine is with
• 1:07
  Speaker 4: me as always, and we're talking about something very exciting today.
• 1:10
  Speaker 5: Yeah, you've brought a lot of energy for what could
• 1:13
  Speaker 5: have been a very dry topic.
• 1:15
  Speaker 4: It's not going to be dry. I have a good
• 1:17
  Speaker 4: feeling about this. It's the Investor's Guide to Tax Time.
• 1:21
  Speaker 5: That is so juicy, That is spicy, spicy clancy.
• 1:26
  Speaker 2: Oh, I cannot late to jump in.
• 1:29
  Speaker 5: I am so excited about this spicy content. Tell me
• 1:31
  Speaker 5: you're not stupidly excited, Beck.
• 1:34
  Speaker 2: I'm stupidly excited. My favorite part about this is that
• 1:38
  Speaker 2: you're not an investor.
• 1:40
  Speaker 5: Everything that we're going to talk about completely irrelevant to you.
• 1:44
  Speaker 2: I'm just glad you're here with bells on. It's new
• 1:46
  Speaker 2: news to me.
• 1:47
  Speaker 4: I'm a tiny baby in this episode, and I hope
• 1:50
  Speaker 4: you teach me a thing or two.
• 1:51
  Speaker 5: But my favorite thing about these episodes is whether you're
• 1:53
  Speaker 5: ready or not to be an investor. My favorite thing
• 1:56
  Speaker 5: ever is making sure you're educated and actually ready for
• 1:59
  Speaker 5: the conversation when it does happen. So like, I cannot
• 2:02
  Speaker 5: wait for the day that you're like, oh, v I'm
• 2:04
  Speaker 5: investing my first fifty bars because you're going to have
• 2:06
  Speaker 5: so much education behind you that you're making the right
• 2:09
  Speaker 5: decision for you.
• 2:10
  Speaker 2: I think it's such a.
• 2:12
  Speaker 5: Misconception that, oh, well, maybe like this episode about tax
• 2:15
  Speaker 5: and you know, investors, it's not relevant for me.
• 2:18
  Speaker 2: I totally get that.
• 2:19
  Speaker 5: But like, what if in the next twelve months you
• 2:22
  Speaker 5: get your financial shit sorted enough that you are an investor.
• 2:25
  Speaker 2: You're going to need this next June.
• 2:26
  Speaker 5: You're going to need this for future You and I
• 2:28
  Speaker 5: think that it's really beautiful in a way to kind
• 2:31
  Speaker 5: of like give yourself that education before you need it.
• 2:33
  Speaker 5: Like I've said it before and it's probably not the
• 2:35
  Speaker 5: right example, but like you don't become a brain surgeon
• 2:38
  Speaker 5: by like just going in and doing brain surgery.
• 2:40
  Speaker 2: Right, Like you say, YouTube is yeah, oh can you
• 2:43
  Speaker 2: do it? Buy YouTube?
• 2:44
  Speaker 3: Baby, and so much cheaper than a med degree at
• 2:47
  Speaker 3: MELBOURNI like, honestly.
• 2:48
  Speaker 2: Quicker, quicker twenty minutes.
• 2:51
  Speaker 5: You know what, if I ever have to have brain surgery,
• 2:53
  Speaker 5: you best believe I want someone with a real degree,
• 2:55
  Speaker 5: not someone who's like learned. Not me, not you, You're canceled.
• 3:01
  Speaker 5: So today we're going to be stepping through a few
• 3:02
  Speaker 5: very important points on this huge topic to give you
• 3:05
  Speaker 5: guys some general basics when it comes to tax time
• 3:08
  Speaker 5: and your investments and what to do, because it can
• 3:10
  Speaker 5: be super overwhelming and it's worth obviously bearing in mind
• 3:13
  Speaker 5: that tax implications and beck the possible benefits of certain investments.
• 3:17
  Speaker 5: So generally, all of your investment income needs to be
• 3:20
  Speaker 5: declared in your tax return, all of it, every single dollar.
• 3:24
  Speaker 2: Interests, dividends, rent.
• 3:26
  Speaker 5: Managed fun distributions, capital gains from properties, shares and cryptocurrency.
• 3:31
  Speaker 5: And if you're like, oh my gosh, I'm not an
• 3:33
  Speaker 5: investor v I just have my money in a high
• 3:35
  Speaker 5: interest savings account.
• 3:37
  Speaker 2: Beck that's interest, you have to declare that, Oh my gosh,
• 3:41
  Speaker 2: exactly scary.
• 3:42
  Speaker 5: So it's not scary, it's just about being transparent.
• 3:45
  Speaker 2: And to be honest, guys, it's twenty twenty three.
• 3:48
  Speaker 5: The tax system is so advanced that more often than not,
• 3:52
  Speaker 5: you're not even going to have to do the research.
• 3:54
  Speaker 5: It will just be in your tax return already because
• 3:57
  Speaker 5: your bank ruty has your TFN. So it's very likely
• 4:00
  Speaker 5: that all of this could be automated for you. And
• 4:02
  Speaker 5: that's why so many times when I talk to people
• 4:05
  Speaker 5: and they say, I'm not sure should I be doing
• 4:07
  Speaker 5: my tax return myself? You could give it a crack like,
• 4:10
  Speaker 5: it is so much easier than it used to be.
• 4:13
  Speaker 5: So you pay tax on investment income at your marginal
• 4:16
  Speaker 5: tax rate, that's the rate that you pay tax.
• 4:18
  Speaker 2: On your normal income.
• 4:20
  Speaker 5: However, there are some special rules that apply to what
• 4:23
  Speaker 5: we call.
• 4:23
  Speaker 2: Capital gains, which could arise on quote, the disposable of
• 4:27
  Speaker 2: your assets.
• 4:28
  Speaker 5: That just means you sell them in a fancy way,
• 4:30
  Speaker 5: right like capital gains is a tax that you pay
• 4:33
  Speaker 5: when you sell an asset and it is worth more
• 4:36
  Speaker 5: than what it was when you purchased it, because they
• 4:39
  Speaker 5: look at it and they go all right, well, Beck,
• 4:40
  Speaker 5: If you bought a share for ten dollars and it
• 4:42
  Speaker 5: did really well and it got to fifteen dollars and
• 4:45
  Speaker 5: you were like, well, I'm going to sell it, they're
• 4:47
  Speaker 5: going to go okay, cool, you bought it at ten dollars,
• 4:49
  Speaker 5: it's now worth fifteen. Capital gains will apply to that
• 4:53
  Speaker 5: five dollars that you made because in Australia and usually
• 4:56
  Speaker 5: every other tax environment in the world, you have to
• 4:59
  Speaker 5: pay tax on what you earned.
• 5:01
  Speaker 2: And you earned about five dollars. Does that make sense?
• 5:03
  Speaker 2: That does make sense.
• 5:04
  Speaker 5: So you're allowed tax deductions for the cost of buying,
• 5:07
  Speaker 5: managing and selling an investment, which is really cool. So
• 5:10
  Speaker 5: if you've been brokering shares during the year, like you've
• 5:13
  Speaker 5: jumped on shares is and there were fees, you can
• 5:15
  Speaker 5: claim them on your tax. That is very sexy, I think.
• 5:19
  Speaker 5: But there are also rules around what you can and
• 5:22
  Speaker 5: claim as a tax deduction. We'll obviously get onto those later.
• 5:25
  Speaker 5: And I genuinely think that more.
• 5:27
  Speaker 2: Things should be tax deductible.
• 5:29
  Speaker 5: Like something that really grinds my gears back and we'll
• 5:31
  Speaker 5: obviously get into more of the semantics of it, but
• 5:34
  Speaker 5: as somebody who is an ex financial advisor, this really
• 5:37
  Speaker 5: grinds my gears. So you obviously go and see a
• 5:39
  Speaker 5: financial advisor if you've got some money and you want
• 5:41
  Speaker 5: to be in the best possible financial position. And a
• 5:44
  Speaker 5: lot of the time you'll see a financial advisor and
• 5:47
  Speaker 5: they will say, all right, Beck, you've got you know
• 5:49
  Speaker 5: this amount today and we're going to grow it to
• 5:51
  Speaker 5: this amount over here, and with my advice, you're going
• 5:54
  Speaker 5: to be hopefully hundreds of thousands, if not millions of
• 5:57
  Speaker 5: dollars better off, and you go, great, that's fantastastic. What
• 6:01
  Speaker 5: grinds my gears is that process where you're putting yourself
• 6:04
  Speaker 5: first sounds really sexy. That benefits our government significantly. Like
• 6:09
  Speaker 5: the idea that if somebody an individual goes and sees
• 6:12
  Speaker 5: the financial advisor about their superannuation, even if they are
• 6:16
  Speaker 5: just a general employee, like we're not talking about millionaires
• 6:19
  Speaker 5: seeing financial advisors, which you're talking about general mum and
• 6:21
  Speaker 5: dad seeing financial advisors, they will be in a better
• 6:24
  Speaker 5: off financial position because of that advice, which means the
• 6:28
  Speaker 5: likelihood of them claiming a pension in the future.
• 6:31
  Speaker 2: Far far less likely.
• 6:33
  Speaker 5: Right, So, like, if you go and see your financial advisor,
• 6:36
  Speaker 5: you're probably not going to rely on the government during
• 6:38
  Speaker 5: retirement because the whole point is that you're working towards
• 6:41
  Speaker 5: a secure individual financial future.
• 6:43
  Speaker 1: Right.
• 6:44
  Speaker 2: Does that not piau the government in the best possible positions?
• 6:47
  Speaker 5: Why are they not letting us claim the cost of
• 6:50
  Speaker 5: initial financial advice where you get your statement of advice
• 6:53
  Speaker 5: on tax? Why can't I claim that? Does it not
• 6:57
  Speaker 5: put you in the best possible position? Government to give
• 6:59
  Speaker 5: me some tax back now on the probably anywhere between
• 7:03
  Speaker 5: three and eight thousand dollars fee, which would be very sexy.
• 7:06
  Speaker 5: Why can't you let me have that initial piece of
• 7:09
  Speaker 5: advice with some kind of like you know, tax incentives
• 7:12
  Speaker 5: so that more of us do it, so less of
• 7:14
  Speaker 5: us down the track actually claim pensions and actually need
• 7:18
  Speaker 5: government support.
• 7:19
  Speaker 2: But you won't do that.
• 7:21
  Speaker 5: Isn't that insane when you like extrapolate it out and
• 7:24
  Speaker 5: go hold on the government would actually be better off if
• 7:26
  Speaker 5: more of us got advice. And the amount of times
• 7:28
  Speaker 5: I saw people ask me questions when I was working
• 7:31
  Speaker 5: as a financial advisor. Oh can I claim this on
• 7:33
  Speaker 5: tax and I'd have to go, look, no, you can't, unfortunately,
• 7:36
  Speaker 5: because it's initial advice. But what you can claim is
• 7:39
  Speaker 5: ongoing investment advice. So like after you've got your initial advice,
• 7:43
  Speaker 5: any monthly fee after that is claimable, but not the
• 7:46
  Speaker 5: initial and the initials the thing that scares most people off, right,
• 7:50
  Speaker 5: because like if I said to you, hey, Beck, get
• 7:52
  Speaker 5: financial advice, it will put you in the best possible position.
• 7:54
  Speaker 2: You go, oh my god, this.
• 7:56
  Speaker 5: Is such a good idea, but like it's such a
• 7:59
  Speaker 5: high upfront. I don't mind about the ongoing monthly fee,
• 8:02
  Speaker 5: like that's completely manageable, but the upfront scares people off.
• 8:06
  Speaker 2: I totally. I've got thoughts. Anyway, maybe you should write
• 8:09
  Speaker 2: a letter to the tax person.
• 8:11
  Speaker 5: Yeah, hello, mister tax man, please let me claim this
• 8:14
  Speaker 5: because it will be the goodest for you. Yeah, Like,
• 8:18
  Speaker 5: it's a very very what's the word persuasive, it's a
• 8:22
  Speaker 5: persuasive argument.
• 8:23
  Speaker 4: It's persuasive, and really, I think that you've really thought
• 8:27
  Speaker 4: this through.
• 8:27
  Speaker 2: I think this is a great idea I.
• 8:29
  Speaker 5: Actually have because do you know how frustrated I would
• 8:32
  Speaker 5: get every single time I would have to explain to clients, No,
• 8:35
  Speaker 5: you can't claim me on tax, like you can't claim
• 8:37
  Speaker 5: my initial advice. But you can for your accountant, you
• 8:40
  Speaker 5: can for any other service providers related to money, just
• 8:43
  Speaker 5: not me because the government doesn't see me as valuable
• 8:46
  Speaker 5: as I am.
• 8:47
  Speaker 2: Oh my gosh, yeah you need to write. I've just
• 8:49
  Speaker 2: got a lot to say about that process.
• 8:51
  Speaker 5: But then also the part where financial advisors basically undersell
• 8:55
  Speaker 5: themselves completely, Like you guys are so magical and put
• 8:59
  Speaker 5: people in such good financial positions. But like if I
• 9:02
  Speaker 5: busted in the door and said, all right, Beck, we're
• 9:04
  Speaker 5: gonna sit you down. I'm going to put you in
• 9:05
  Speaker 5: the best possible financial position of your entire life, You're
• 9:08
  Speaker 5: going to be so financially secure. See, your subranuation might
• 9:11
  Speaker 5: be sitting at eighty thousand dollars right now, but when
• 9:13
  Speaker 5: you retire, it's going to be well over a million.
• 9:16
  Speaker 5: Because of my advice, You're going to be literally millions
• 9:18
  Speaker 5: of dollars better off. You'd be like, oh, I'm in
• 9:20
  Speaker 5: You sound like a sales queen, whereas financial advisors don't
• 9:24
  Speaker 5: do it that way. They like are a lot softer
• 9:26
  Speaker 5: and a lot more gentle with the process because obviously
• 9:29
  Speaker 5: you don't want to scare people off.
• 9:31
  Speaker 2: But then clients have the audacity.
• 9:33
  Speaker 5: And come back and be like, oh, four thousand dollars
• 9:35
  Speaker 5: is a fee that's insane. Absolutely not paying that. I'm like,
• 9:39
  Speaker 5: you're literally going to make more than a million dollars
• 9:40
  Speaker 5: because of me. But okay, no worries.
• 9:42
  Speaker 2: Jeez. Anyway, there's just a lot to be said on
• 9:45
  Speaker 2: that topic. Yeah.
• 9:46
  Speaker 5: That so this episode is about but get financial advice.
• 9:50
  Speaker 5: Now's a good time to think about your insurances as well.
• 9:53
  Speaker 5: So if you haven't got that advice, yes, I would
• 9:55
  Speaker 5: be going and actually, you know, putting yourself in the
• 9:57
  Speaker 5: best possible position. We obviously have a recommend Phil from
• 10:01
  Speaker 5: Skywealth is who you should be going and talking to
• 10:03
  Speaker 5: about your situation. And his fee is not thousands of dollars.
• 10:07
  Speaker 5: It's like three hundred and ninety five for a consultation,
• 10:09
  Speaker 5: which is wild, Like for all advice, you can't claim
• 10:13
  Speaker 5: it on tax I AM really sorry. But given his
• 10:15
  Speaker 5: fee is only a couple of hundred dollars in comparison
• 10:18
  Speaker 5: to thousands, to put yourself in the best possible decision,
• 10:20
  Speaker 5: I think that's really good money when you.
• 10:21
  Speaker 2: Had to go anyway, Soling Advice.
• 10:23
  Speaker 4: So V, I want to know when it comes to
• 10:26
  Speaker 4: investing in tax returns, what do you need to have prepared?
• 10:29
  Speaker 2: Everything? Everything, every single thing.
• 10:32
  Speaker 5: Yep, you should have like a Manila folder, one of
• 10:34
  Speaker 5: those light yellow ones that give me anxiety from the
• 10:37
  Speaker 5: amount of times I used to use them.
• 10:39
  Speaker 2: To write that down. Get Manila folder on my shop list.
• 10:42
  Speaker 5: If you could get like a label maker and label
• 10:44
  Speaker 5: it as well, that would make it feel a lot
• 10:46
  Speaker 5: more official.
• 10:47
  Speaker 2: Really stucking up place. Yeah, label maker, yep, yep, you're
• 10:50
  Speaker 2: writing this down.
• 10:50
  Speaker 3: I like it.
• 10:51
  Speaker 2: You're taking this very seriously.
• 10:53
  Speaker 5: What you want actually is your investment income as a report.
• 10:57
  Speaker 5: Most investment platforms will automatically generate this for you.
• 11:01
  Speaker 2: And email it to you.
• 11:02
  Speaker 5: So misconception is that it will be available on the
• 11:06
  Speaker 5: thirtieth of June or the first of July. That is
• 11:08
  Speaker 5: not true, and it's not not true because they're lazy
• 11:12
  Speaker 5: and haven't done the reporting. It's because we actually need
• 11:14
  Speaker 5: the date to pass so that we can actually look
• 11:17
  Speaker 5: at the historical changes and what actually happened in your portfolio.
• 11:21
  Speaker 5: And reporting is actually quite intricate in in depth. So
• 11:24
  Speaker 5: investment reports usually come out from I would say the
• 11:27
  Speaker 5: middle of July. So anywhere between the middle of July
• 11:30
  Speaker 5: to the end of July is when I usually see
• 11:32
  Speaker 5: them hit my accounts. So if you're one of those
• 11:35
  Speaker 5: people like Beck Beck wants to get her tax returning
• 11:38
  Speaker 5: asafety right, yes, Like, once you start investing, that process
• 11:42
  Speaker 5: has to be pushed off a little bit because you're
• 11:43
  Speaker 5: waiting for these reports. So you want your investment income,
• 11:46
  Speaker 5: you want to make sure that you're claiming all the
• 11:47
  Speaker 5: deductions that you're entitled to. So this is really hard.
• 11:51
  Speaker 5: If you get to the point where you're like, oh
• 11:53
  Speaker 5: my gosh, I've got to do my tax return.
• 11:55
  Speaker 2: You haven't been thinking about it.
• 11:56
  Speaker 5: You're like scrambling to work out what you can and
• 11:59
  Speaker 5: can't claim. I've said it before on the show. The
• 12:01
  Speaker 5: Ato actually have an app where you can keep track
• 12:04
  Speaker 5: of things throughout the year. But if you're like me
• 12:06
  Speaker 5: and you just don't want another app on your phone,
• 12:09
  Speaker 5: you can actually just put a folder in your photos
• 12:11
  Speaker 5: and just take photos of things as you go along.
• 12:14
  Speaker 5: If you looked at my albums in my photos section, BEG,
• 12:18
  Speaker 5: you'd be like, this woman's unhinged, Like I have a
• 12:21
  Speaker 5: folder for everything. I have a folder for tax I
• 12:23
  Speaker 5: have a folder for business tax I have a folder
• 12:26
  Speaker 5: for all of the outfits I've worn historically that I
• 12:28
  Speaker 5: really like. I have a folder for all of the
• 12:30
  Speaker 5: expenses i've incurred trying to make a baby with my husband.
• 12:34
  Speaker 5: Wild Like you would literally look at my phone and
• 12:37
  Speaker 5: be like, Victoria, why have you got? Yeah, But when
• 12:41
  Speaker 5: it comes to tax time, you best believe I just
• 12:43
  Speaker 5: flipped my phone around and I'm like, hey, beck, look
• 12:45
  Speaker 5: at all these costs.
• 12:46
  Speaker 2: I can claim that is so good, makes Victoria.
• 12:49
  Speaker 4: If the ATO needed like proof or receipts, a photo
• 12:53
  Speaker 4: of a receipt is it's absolutely sufficient.
• 12:55
  Speaker 5: Okay, great, because you will have to provide that to
• 12:57
  Speaker 5: the ATO anyway, if you get audited and they're just
• 13:00
  Speaker 5: going to ask for a quote the original receipt, but
• 13:02
  Speaker 5: a photo of that attached is much easier to go
• 13:05
  Speaker 5: back in email than going, oh hey, yep, misster tax man,
• 13:09
  Speaker 5: let me just go under my bed to the shoe
• 13:10
  Speaker 5: box where I keep all of those receipts. Also, something
• 13:14
  Speaker 5: that you probably haven't considered, but I've seen happen far
• 13:16
  Speaker 5: too many times is receipts fading. So receipts more often
• 13:22
  Speaker 5: than not are printed.
• 13:23
  Speaker 2: On Thermo paper.
• 13:25
  Speaker 5: Thermo paper means that when the receipt comes out, it
• 13:27
  Speaker 5: doesn't have ink. It actually heats up and it prints
• 13:30
  Speaker 5: that way. So if you leave a receipt in your
• 13:33
  Speaker 5: car on a hot day, it is very likely that
• 13:35
  Speaker 5: that receipt loses all of the information that was on
• 13:38
  Speaker 5: it because it's overheated.
• 13:40
  Speaker 2: Do you remember those.
• 13:40
  Speaker 5: Pens where you could like rub them out but they
• 13:42
  Speaker 5: were pen, Yeah, that actually disappeared because of friction, not
• 13:46
  Speaker 5: because of the rubber doing it.
• 13:47
  Speaker 2: It was actually friction and heating it up.
• 13:49
  Speaker 5: So one time, I used to be obsessed with like
• 13:52
  Speaker 5: eraisable pens because I'm a lefty and I mess everything up,
• 13:55
  Speaker 5: So a raisable pens they don't smudge, So I loved that.
• 13:58
  Speaker 5: But then also I loved that I could just like
• 14:00
  Speaker 5: eraise my mistakes and my notes would always look perfect.
• 14:02
  Speaker 5: Like I don't know if you've noticed this, but I
• 14:04
  Speaker 5: like being organized. I like everything to look perfect, Like
• 14:07
  Speaker 5: I used to write everything in these like erasable pens.
• 14:10
  Speaker 5: Notebook car hot day, lost every note I ever had
• 14:14
  Speaker 5: for a client. And now I've never used an eraisable
• 14:17
  Speaker 5: pen ever again because I'm triggered. Yeah that makes sense,
• 14:20
  Speaker 5: that's but that is why, in a very long winded
• 14:23
  Speaker 5: way of saying, it's actually better to take a photo
• 14:26
  Speaker 5: and save it because the likelihood of your receipt disintegrating
• 14:30
  Speaker 5: whether you look after it or not, is very high.
• 14:32
  Speaker 4: Now, I wonder if I had a piece of paper
• 14:36
  Speaker 4: that may or may not have once been a receipt,
• 14:39
  Speaker 4: sent that to the ATO and said, I'm so sorry,
• 14:43
  Speaker 4: this is not.
• 14:44
  Speaker 2: Kind of you don't have proof.
• 14:45
  Speaker 1: Ah.
• 14:46
  Speaker 5: Yeah, it's kind of like when the police come to
• 14:49
  Speaker 5: get you, and it's like innocent, indelatable, innocent until proven guilty.
• 14:54
  Speaker 5: But also you've got to prove that you're innocent, right,
• 14:58
  Speaker 5: you know, like if you get accused something, they'll be like, well,
• 15:01
  Speaker 5: prove you didn't do it, and you're like, oh, well damn,
• 15:03
  Speaker 5: I don't know how I'm going to do this. Yeah, honestly,
• 15:06
  Speaker 5: TLDR of this conversation, take photos of your receipts, save
• 15:09
  Speaker 5: them somewhere important. It could be a folder, it could
• 15:11
  Speaker 5: be the atier app, it could be anywhere. But that's
• 15:14
  Speaker 5: going to mean that all of your tax deductions are
• 15:17
  Speaker 5: much easier to one claim because it's just in the
• 15:19
  Speaker 5: one space. But also, remember, like I forget all the time.
• 15:23
  Speaker 5: I'm a business owner as well as somebody who claims
• 15:25
  Speaker 5: on my personal tax. So these small things add up.
• 15:28
  Speaker 5: Like if you're going to pop past office works and
• 15:30
  Speaker 5: pick up some last minute things or some like pens
• 15:32
  Speaker 5: or some notes, or you know, I buy a million
• 15:34
  Speaker 5: sharpies and post it notes, like take photos of those receipts,
• 15:38
  Speaker 5: because they're the ones that if it's for work purposes,
• 15:40
  Speaker 5: you can claim. So just make sure that throughout the
• 15:43
  Speaker 5: year you're just keeping track of stuff, my friend. It
• 15:46
  Speaker 5: will also mean that when you have to like calculate
• 15:49
  Speaker 5: any capital losses or capital gains when you sell an investment,
• 15:52
  Speaker 5: like just keep everything in one place. It'll make it
• 15:55
  Speaker 5: so much easier, whether you're doing it individually or you're
• 15:57
  Speaker 5: handing that information over to an accountant. My accountant loves me,
• 16:02
  Speaker 5: he really does, because I'm so organized that I make
• 16:05
  Speaker 5: his lafe so much easier.
• 16:07
  Speaker 4: I can imagine that would be very nice, exactly, love
• 16:10
  Speaker 4: to see Victoria walking through those doors.
• 16:12
  Speaker 2: Yeah, I mean that's how I feel.
• 16:14
  Speaker 5: I mean, it's probably just my ego telling me that
• 16:16
  Speaker 5: that's it. He's probably just like, yep, another cut paste client,
• 16:20
  Speaker 5: no worries.
• 16:21
  Speaker 2: But I think, of course you can you can see
• 16:24
  Speaker 2: it in his eyes? Yeah? Yeah, Now, V what.
• 16:26
  Speaker 4: Do we actually need to keep records off to show
• 16:28
  Speaker 4: the ato erroiting erroting errooting? Okay, so if you are
• 16:32
  Speaker 4: claiming something, you must have a receipt for that, even
• 16:35
  Speaker 4: if it's under the.
• 16:36
  Speaker 5: Do I say in my office this is terrible. I'm
• 16:39
  Speaker 5: going to get in trouble with the environmental hippies. When
• 16:41
  Speaker 5: in doubt printed out like we need it, And I
• 16:44
  Speaker 5: don't actually mean to print it like on hard paper.
• 16:46
  Speaker 5: Sure you know when you like get emailed like a
• 16:48
  Speaker 5: receipt or something. Love that I say, when in doubt
• 16:51
  Speaker 5: printed out, because if you hit print, like the invoice
• 16:53
  Speaker 5: that you've been sent or the receipt or whatever, you
• 16:55
  Speaker 5: can actually save it to PDF and put it in
• 16:57
  Speaker 5: an album.
• 16:57
  Speaker 2: And that's what I do.
• 16:58
  Speaker 5: I'm not actually printing it, but I'm saving it, filing
• 17:00
  Speaker 5: it away, because I guarantee the last thing small business
• 17:03
  Speaker 5: owners want to do, or anyone wants to do, is
• 17:05
  Speaker 5: troll through their emails trying to find an attachment for
• 17:09
  Speaker 5: an invoice that they paid back in January?
• 17:12
  Speaker 1: Right?
• 17:12
  Speaker 2: How do you want to do that? How can you remember? Also?
• 17:15
  Speaker 5: Oh my gosh, the amount doesn't line up because there's
• 17:17
  Speaker 5: lots of different invoices that get paid. Honestly, just file
• 17:20
  Speaker 5: it away. We use an accounting system at the moment,
• 17:23
  Speaker 5: we're using zero, so it's all just like tracked in there,
• 17:25
  Speaker 5: and it makes it so much easier that small business
• 17:28
  Speaker 5: side of things. But when it comes to being an individual,
• 17:30
  Speaker 5: like just file it away. Even in your emails, have
• 17:33
  Speaker 5: a little like separate email folder that you can just
• 17:36
  Speaker 5: click and drag things that you think might be relevant
• 17:38
  Speaker 5: to tax time. Call it tax time and call it
• 17:42
  Speaker 5: tax time twenty twenty three or twenty twenty four, because
• 17:45
  Speaker 5: I promise you you're not going to want to look
• 17:46
  Speaker 5: at all your old tax stuff next year. And at
• 17:48
  Speaker 5: least it's all kind of like folders. So I've got
• 17:51
  Speaker 5: tax time twenty twenty, tax time twenty twenty one, twenty
• 17:53
  Speaker 5: twenty gen know what I mean, totally like just be
• 17:56
  Speaker 5: organized and will help you.
• 17:58
  Speaker 4: I unfortunately do have twenty maybe thirty emails because I,
• 18:02
  Speaker 4: you know, want to sign up for Netflix and have
• 18:04
  Speaker 4: a free trial doneary every month. Yeah, so for me
• 18:06
  Speaker 4: it's going to be a bit of a nightmare trying
• 18:07
  Speaker 4: to find all the invoice.
• 18:08
  Speaker 5: But if you were doing it as you were going, Yeah,
• 18:10
  Speaker 5: were very much easier, right.
• 18:11
  Speaker 4: Absolutely, So you know what I might do if i'd
• 18:13
  Speaker 4: start doing Yeah.
• 18:16
  Speaker 5: When it comes to investments, though, what you're really wanting
• 18:19
  Speaker 5: to keep track of is kind of the start and
• 18:21
  Speaker 5: the end of the process, like the middle ground. It's
• 18:24
  Speaker 5: fun for you, but the tax man isn't going to
• 18:27
  Speaker 5: care as much. What they want to know is how
• 18:29
  Speaker 5: much would you pay for that asset? How much did
• 18:31
  Speaker 5: you sell that asset for, or how much is that
• 18:34
  Speaker 5: asset worth today? Like what is it worth when we
• 18:36
  Speaker 5: do our tax return, right, so, like we also want
• 18:39
  Speaker 5: to understand how much income are you getting from that investment.
• 18:42
  Speaker 5: Make sure that you're just keeping record of all income
• 18:44
  Speaker 5: payments like your distribution statements or like your rental payment
• 18:47
  Speaker 5: receipts and dividend statements. And then also Beck, we want
• 18:51
  Speaker 5: to make sure that we are keeping track of any
• 18:53
  Speaker 5: expenses that you incur while owning that asset, so receipts
• 18:58
  Speaker 5: for payments to manage. So if you're engaging a property
• 19:02
  Speaker 5: manager claiming it, we are making sure that we are
• 19:06
  Speaker 5: tracking any cost that we incurred to maintain the property.
• 19:09
  Speaker 5: So say something happened to the front door, and you
• 19:11
  Speaker 5: needed to replace it on a rental claimable because it's
• 19:14
  Speaker 5: an improvement or a maintenance thing for your property. We
• 19:17
  Speaker 5: also want to make sure that we're claiming any cost
• 19:20
  Speaker 5: that was incurred to improve your investment. So like as
• 19:23
  Speaker 5: I said before, you're not able to claim first initial
• 19:26
  Speaker 5: advice with a financial advisor, but you can claim ongoing
• 19:29
  Speaker 5: which is improving your investment. So there's lots to it.
• 19:32
  Speaker 5: You also need to keep your records for five years.
• 19:35
  Speaker 5: That's why I didn't say delete that folder when you're done,
• 19:38
  Speaker 5: don't do that. You need to keep it for five
• 19:40
  Speaker 5: years on record because that's the period of time that
• 19:42
  Speaker 5: they could potentially audit you for and you'd have to
• 19:45
  Speaker 5: prove it. So just important to make sure that it's
• 19:47
  Speaker 5: all filed away and then you can delete it after
• 19:50
  Speaker 5: five years if anything. Like me, you still have your
• 19:53
  Speaker 5: tax return information from twenty sixteen.
• 19:55
  Speaker 2: It's all good. Like I don't delete.
• 19:56
  Speaker 5: Anything because I'm not going to go back through that,
• 19:59
  Speaker 5: but at least it's biled away for future use.
• 20:01
  Speaker 4: Yeah, yeah, I love that. Okay, this is interesting about
• 20:04
  Speaker 4: the landlord thing. Sorry, the landlord thing, not the landlord thing.
• 20:07
  Speaker 4: If you have an investment property.
• 20:09
  Speaker 5: Yeah, because it's an investment and you're paying for things
• 20:11
  Speaker 5: to improve the property.
• 20:13
  Speaker 2: Yeah, so you can claim it. That is really really cool.
• 20:16
  Speaker 5: It's one of the sexy reasons why people who have
• 20:19
  Speaker 5: investment properties, you know, might choose to buy an investment
• 20:23
  Speaker 5: property and then renovate it or make substantial improvements to
• 20:27
  Speaker 5: it while it is still an investment. Obviously, you need
• 20:30
  Speaker 5: to talk to an accountant and get some advice on
• 20:32
  Speaker 5: this because there are like, you know, regulations and things
• 20:35
  Speaker 5: that you need to abide by. But if you wanted
• 20:38
  Speaker 5: to improve the property and you know, change the bathroom
• 20:41
  Speaker 5: or update the bathroom, if it's an investment, you can
• 20:43
  Speaker 5: claim some of that.
• 20:44
  Speaker 4: What things can you claim on and what can you
• 20:47
  Speaker 4: not claim on? So I'm assuming if you like live
• 20:49
  Speaker 4: in a house, it's not obviously an investment. So if
• 20:52
  Speaker 4: you're you know, fixing up your own house that you
• 20:54
  Speaker 4: have maybe purchased, you could be able to claim that.
• 20:57
  Speaker 5: No, no, no, because it's not an investment and it
• 21:00
  Speaker 5: has to like they're asked. And that's why I said,
• 21:02
  Speaker 5: get advice on it. You can't just listen to a
• 21:04
  Speaker 5: podcast and be like, well, Victoria Device said, because babe,
• 21:08
  Speaker 5: that's not going to fly with the ATO, Like I'm
• 21:10
  Speaker 5: pretty close with them, but all that close, like don't
• 21:12
  Speaker 5: name drop me, you know, like they're probably gonna side,
• 21:15
  Speaker 5: are you all? Victoria's said, okay, Victoria, Well in that case,
• 21:17
  Speaker 5: like give me who this woman again? Like we're so
• 21:20
  Speaker 5: sick of her.
• 21:21
  Speaker 2: Anyway.
• 21:22
  Speaker 5: What you can claim is interest income expenses, so claiming
• 21:26
  Speaker 5: a deduction for like account keeping fees that you incur
• 21:29
  Speaker 5: on an account held for investment purposes, like a cash
• 21:32
  Speaker 5: management account. So like, for example, I have a separate
• 21:36
  Speaker 5: bank account with McQuary because I invest with six Park
• 21:39
  Speaker 5: as well, So like not recommendation, I'm just sharing some information.
• 21:42
  Speaker 5: I invest through six Park and through them, I have
• 21:45
  Speaker 5: a cash management account with mcquarie, and that's where essentially
• 21:48
  Speaker 5: I direct debit cash to that account and then six Park,
• 21:52
  Speaker 5: which is the investment platform that I use, They actually
• 21:56
  Speaker 5: have authorization to take money just out of that account,
• 21:59
  Speaker 5: so I move into that account so that then when
• 22:01
  Speaker 5: I say, yep, I would like you to invest X
• 22:03
  Speaker 5: amount of my money, they just take it out of there.
• 22:06
  Speaker 5: And we need that account because I'm not going to
• 22:08
  Speaker 5: give them authorization on my daily transaction account, right like
• 22:11
  Speaker 5: I want that middle buffer where they can only touch
• 22:14
  Speaker 5: that money that is in that cash management account. That
• 22:17
  Speaker 5: account has fees, so I can claim those fees on
• 22:20
  Speaker 5: tax which is kind of cool, but a lot of
• 22:22
  Speaker 5: people would just like dismiss it and not think about
• 22:24
  Speaker 5: it because they're like, oh, that's just some structure that
• 22:26
  Speaker 5: I've set up to invest whatever. Don't think about it again.
• 22:29
  Speaker 5: You can claim that, and you need to claim that
• 22:31
  Speaker 5: because you're entitled to it, Like we need to claim
• 22:34
  Speaker 5: what we are entitled to. So don't throw away those
• 22:36
  Speaker 5: like fees statements when they come through. If you have
• 22:39
  Speaker 5: a joint account, you can only claim half, like or
• 22:42
  Speaker 5: whatever your joint amount is. So obviously you can only
• 22:46
  Speaker 5: claim your share of the fees, not like the total fees.
• 22:48
  Speaker 5: You can't double dip. I'm really sorry, because I know
• 22:50
  Speaker 5: some people might be like, oh, I'm going to double
• 22:52
  Speaker 5: dip you in. My partner will do it and I
• 22:54
  Speaker 5: will do it. No, no, no, you can't do that.
• 22:57
  Speaker 2: Sorry.
• 22:57
  Speaker 5: You can also claim on charges or taxes on that account.
• 23:00
  Speaker 5: So for example, like if you hold an equal share
• 23:02
  Speaker 5: in an account with your partner, you can only claim
• 23:05
  Speaker 5: half of that allowable account keeping fee. It's kind of rude,
• 23:08
  Speaker 5: but also like it makes sense. Yes, suppose to this
• 23:12
  Speaker 5: second part of your question. You were asking about what
• 23:14
  Speaker 5: you can't claim. So you can't claim a deduction for
• 23:16
  Speaker 5: the interest you incur on personal tax debt.
• 23:20
  Speaker 2: Sorry, I need to absorve that so that at that time.
• 23:22
  Speaker 5: I just stopped when I said that the interest that
• 23:25
  Speaker 5: you incur on a personal tax debt. So like, if
• 23:28
  Speaker 5: you've got a personal tax debt, yes, and you owe
• 23:30
  Speaker 5: the atos and casholer ah, and then you're occruing interest
• 23:34
  Speaker 5: on that debt. You can't claim that interest because in
• 23:37
  Speaker 5: another circumstance, so like say you bought a house back,
• 23:41
  Speaker 5: you are able to claim the interest on that property, oh,
• 23:45
  Speaker 5: because it's for investment, But you can't claim the interest
• 23:48
  Speaker 5: on a tax debt.
• 23:49
  Speaker 2: For example.
• 23:49
  Speaker 5: This is coming up because a few people have asked
• 23:52
  Speaker 5: me that question, because you might be like, oh, they,
• 23:54
  Speaker 5: why are you mentioning that that that doesn't make a
• 23:56
  Speaker 5: lot of sense for an investment. You can claim the
• 23:59
  Speaker 5: interest on the money that you borrowed because it's a
• 24:02
  Speaker 5: cost of investment. Okay, I taxed it. That's not the same.
• 24:06
  Speaker 5: You can't claim the interest on a loan that you
• 24:08
  Speaker 5: take to pay your personal tax dep yep. Okay, So
• 24:10
  Speaker 5: if you say borrow money to put into literal investment,
• 24:14
  Speaker 5: maybe like superannuation or something that can be considered not
• 24:18
  Speaker 5: necessarily superannuation, but you can do it on property. So
• 24:22
  Speaker 5: you might go get a mortgage to buy an investment
• 24:24
  Speaker 5: property and then you'll pay an interest rate to borrow
• 24:27
  Speaker 5: that money that is claimable and then also something that
• 24:30
  Speaker 5: you're probably not have going to come across before, but
• 24:33
  Speaker 5: I've covered on the podcast, just kind of like topically,
• 24:37
  Speaker 5: you can actually borrow money to invest in the share market,
• 24:40
  Speaker 5: so you could claim on that as well. So it's
• 24:43
  Speaker 5: not something that a lot of people in our community do,
• 24:47
  Speaker 5: especially in this economy. I don't think it's you know,
• 24:50
  Speaker 5: the wisest decision ever because obviously, as you know, interest
• 24:53
  Speaker 5: rates for borrowing money are quite high, but then the
• 24:57
  Speaker 5: stock market is I wouldn't say returning low. It's not that,
• 25:00
  Speaker 5: but it's not as good as it could be. So
• 25:02
  Speaker 5: having a leveraged portfolio, so leveraged portfolio just means I
• 25:07
  Speaker 5: have borrowed money to create my portfolio is not something
• 25:10
  Speaker 5: that I assume a lot of financial advisors are recommending
• 25:13
  Speaker 5: at this point in time.
• 25:15
  Speaker 2: Sure, it is.
• 25:15
  Speaker 5: Something that financial advisors do use. It is something that
• 25:19
  Speaker 5: I have recommended, is something that I have worked with
• 25:23
  Speaker 5: with my clients before. It's also something that I've used
• 25:25
  Speaker 5: personally and owned before, but I don't currently own at
• 25:28
  Speaker 5: the moment because the market just started to not make
• 25:30
  Speaker 5: sense in that aspect and I sold it and got
• 25:32
  Speaker 5: rid of it and just said, yeah, the market's not
• 25:35
  Speaker 5: performing the way I would want it to see for
• 25:37
  Speaker 5: me to take on that risk. Sure in saying that,
• 25:40
  Speaker 5: if you're listening to this, just as a side note,
• 25:42
  Speaker 5: and you do have a leveraged portfolio and you're like, oh.
• 25:44
  Speaker 2: Victoria doesn't have hers anymore, I should get rid.
• 25:46
  Speaker 5: Of mine, That's not the case at all. I am
• 25:49
  Speaker 5: just very risk averse. The second there's any lack rocky waters,
• 25:53
  Speaker 5: I'm like god right away. So I talked to your
• 25:56
  Speaker 5: financial advisor about that, because I can almost guarantee that
• 25:58
  Speaker 5: you have a financial advisor.
• 25:59
  Speaker 2: If you have a leveraged portfolio, that is a very
• 26:02
  Speaker 2: strong assumption.
• 26:03
  Speaker 5: Strong assumption, and not many people go get their own
• 26:06
  Speaker 5: investment loans and diy the whole thing. Like, if you're
• 26:09
  Speaker 5: going to take on that much risk back and you're
• 26:11
  Speaker 5: willing to, you know Moorrow one hundred grand to get
• 26:13
  Speaker 5: into the share market. Like very likely that you also
• 26:16
  Speaker 5: see the value in paying for personal advice on.
• 26:18
  Speaker 2: That, right, Like, just the math is mathing in that city.
• 26:21
  Speaker 2: The math is Mathan, the math is mathing. So V,
• 26:24
  Speaker 2: how about dividend and share income expenses? I like that
• 26:28
  Speaker 2: you're reading that out in a way that you're like, I've.
• 26:31
  Speaker 5: Just been pondering my dividend and share income expenses. Not
• 26:35
  Speaker 5: I've just been beck and I did some research and
• 26:37
  Speaker 5: I wrote down these questions to ask Victoria.
• 26:40
  Speaker 2: Yeah.
• 26:41
  Speaker 4: No, I've just been sitting here wondering. Yeah about dividend
• 26:44
  Speaker 4: yield sealed?
• 26:45
  Speaker 3: Yeah?
• 26:45
  Speaker 2: Wow, impressive. So you're right.
• 26:48
  Speaker 5: You can claim a deduction for costs that you incur
• 26:51
  Speaker 5: to invest in shares, as I said before, obviously borrowing money,
• 26:54
  Speaker 5: but that's probably not going to be that popular right now.
• 26:57
  Speaker 5: But ongoing management fees are retainers, financial advisors and such
• 27:02
  Speaker 5: fees for advice about changes to your investment mix or
• 27:05
  Speaker 5: your risk profile. It's kind of like if you're paying
• 27:08
  Speaker 5: somebody to rebalance your portfolio, you can claim that. Yeah,
• 27:12
  Speaker 5: but then you're also able to claim the expenses if
• 27:15
  Speaker 5: you wanted to go to the annual general meeting of
• 27:17
  Speaker 5: a company that you hold shares in. And I've seen
• 27:19
  Speaker 5: people do this before. In fact, our friends over at
• 27:22
  Speaker 5: Equity Mates, I believe they did this and went to
• 27:25
  Speaker 5: the US to attend a meeting, and I thought that
• 27:28
  Speaker 5: was so cool. They didn't talk about whether they were
• 27:30
  Speaker 5: able to claim it on tax or not, but I
• 27:32
  Speaker 5: can almost guarantee that they were able to, and I
• 27:35
  Speaker 5: think it's just real cool, like so ye, But I
• 27:38
  Speaker 5: am also a stock and share nerd and like that
• 27:42
  Speaker 5: would be my dream to be like able to be
• 27:45
  Speaker 5: in on one of those like can you imagine going
• 27:47
  Speaker 5: to Wall Street?
• 27:48
  Speaker 2: Like you go to an annual general meeting?
• 27:50
  Speaker 4: Like, oh yeah, well if I buy like shares in
• 27:53
  Speaker 4: like McDonald's.
• 27:54
  Speaker 2: Our producer is literally laughing at me and I get it.
• 27:57
  Speaker 2: Sit down, she's been to Wall Street. You know what.
• 28:02
  Speaker 5: I'm going to Wall Street later this year, and I
• 28:05
  Speaker 5: have never been more excited, Like what are you going for?
• 28:08
  Speaker 5: I'm going to become your Wall Street girlye Like anyway,
• 28:12
  Speaker 5: I actually have a finance conference in New Orleans, which
• 28:15
  Speaker 5: is very cool.
• 28:15
  Speaker 2: I'm so excited.
• 28:17
  Speaker 5: Yeah, I think concin New Orleans this year and a Lisa,
• 28:21
  Speaker 5: you gotta be in it to win it. So we're
• 28:23
  Speaker 5: going to New Orleans. If you know anything about geography,
• 28:26
  Speaker 5: you would know that New Orleans is not even close
• 28:28
  Speaker 5: to New York. But it is close enough for an
• 28:31
  Speaker 5: Australian to justify the additional travel to New York.
• 28:35
  Speaker 1: Oh.
• 28:36
  Speaker 2: Absolutely.
• 28:37
  Speaker 5: So I'm like, oh, is that a really long flight
• 28:39
  Speaker 5: from New Orleans to New York?
• 28:41
  Speaker 2: Absolutely? It is. How long of it? Oh, it's like
• 28:44
  Speaker 2: four or five hours.
• 28:45
  Speaker 5: Away, which is like it's not like a Melbourne to Sydney, sure,
• 28:48
  Speaker 5: but like it's definitely a moody on the other side
• 28:50
  Speaker 5: of the world. May as well, I may as well
• 28:52
  Speaker 5: go see Wall Street as well. I'm gonna look at
• 28:54
  Speaker 5: that little bull and like REBT's little nose.
• 28:56
  Speaker 2: And be like, hello, little bullfriend.
• 28:57
  Speaker 5: If you know I'm talking about I don't kind of
• 29:00
  Speaker 5: say a aalsa is part of the bull.
• 29:02
  Speaker 2: What is this ball? It's a brass bull, so like
• 29:05
  Speaker 2: brass bull.
• 29:06
  Speaker 5: Yeah, So there's a bull and a bear because like
• 29:08
  Speaker 5: we talk about a bullmarket and a bear market. A
• 29:11
  Speaker 5: bull market is where the market's being really aggressive and
• 29:15
  Speaker 5: you know, it's kind of like waving a red flag
• 29:17
  Speaker 5: to a bull and everything's going up and everybody's happy
• 29:19
  Speaker 5: and there's a lot of excitement. And then the bear
• 29:22
  Speaker 5: market is a market where it's relatively bear so like yeah,
• 29:27
  Speaker 5: kind of like in a hybernation zone, right, So like
• 29:30
  Speaker 5: a bear is obviously a little bit more chilled than
• 29:32
  Speaker 5: a ball with a red flag. They're more likely to
• 29:34
  Speaker 5: go into a cave for a little while and have
• 29:35
  Speaker 5: a little nap. Anyway, those are the true like mascots
• 29:38
  Speaker 5: of Wall Street, and your girlie is gonna pat them,
• 29:42
  Speaker 5: but they're actually just brass statues that are on the street.
• 29:45
  Speaker 5: And I'm just really excited, And to be honest, I
• 29:47
  Speaker 5: think I'm going to be excited until I get there
• 29:48
  Speaker 5: and then I realize it's just like standing on Colin
• 29:50
  Speaker 5: Street in Melbourne and it's actually really boring.
• 29:53
  Speaker 2: But boring and overwhelming people everywhere.
• 29:55
  Speaker 5: Tell people about it, Yes, exactly, I can gloat about it.
• 29:59
  Speaker 2: I'm like, well, have you've been to World Street. Yep,
• 30:01
  Speaker 2: it's going to be a storytell for a bar. I
• 30:03
  Speaker 2: stood on the street and did absolutely nothing.
• 30:05
  Speaker 5: I padded the ball, the brass ball. I'm very excited
• 30:08
  Speaker 5: about it for you. All right, let's get back to
• 30:10
  Speaker 5: talking about tax on your investment. Yes, please, because you
• 30:13
  Speaker 5: best belief my trip to the US is an investment.
• 30:18
  Speaker 2: Actually it will be because it's for a finance conference. Oh,
• 30:20
  Speaker 2: she's on the money. The team's going.
• 30:22
  Speaker 5: Yeah, it'll be good anyway. What else can you claim
• 30:25
  Speaker 5: a deduction for? You can claim a deduction for specialist
• 30:29
  Speaker 5: investment journals and subscriptions, so you best believe. I claim
• 30:32
  Speaker 5: my Australian Financial Review subscription every year. Borrowing costs and interests.
• 30:38
  Speaker 5: We covered that. The cost of internet access. Oh, because
• 30:41
  Speaker 5: you've got to have the internet to invest. Yes, the
• 30:45
  Speaker 5: decline in value of your computer that you used to invest.
• 30:49
  Speaker 2: Do you have to be investing to claim these things? Yeah? Yeah,
• 30:52
  Speaker 2: that's a real shame. Yeah. I mean it's cute that
• 30:55
  Speaker 2: you tried. It's so cute, just said, yes, this is
• 31:00
  Speaker 2: about investing. So I'm sorry. I obviously know you're my favorite.
• 31:04
  Speaker 2: You are my favorite. Why we're here. I love you.
• 31:07
  Speaker 5: And you can also claim fifty percent of the listed
• 31:09
  Speaker 5: investment company or l C capital gain amount if you're
• 31:13
  Speaker 5: an Australian resident where a listed investment company paid you
• 31:16
  Speaker 5: a dividend and the dividend included an LIC capital gain amount.
• 31:21
  Speaker 5: That's going to mean nothing to you, Beck, but if
• 31:25
  Speaker 5: you are listening and you do have an l C,
• 31:27
  Speaker 5: that is something that you should absolutely consider.
• 31:30
  Speaker 2: Beck.
• 31:30
  Speaker 5: It's just another form of investment and it will be
• 31:33
  Speaker 5: on your annual statements.
• 31:34
  Speaker 2: Okay, A lick A lick.
• 31:37
  Speaker 5: I mean, we call them LICs, but we really should
• 31:40
  Speaker 5: be calling them licks.
• 31:41
  Speaker 2: It's a bit. It saves time, you know, life is sure.
• 31:44
  Speaker 5: Yeah, and also it's just way more fun. Like we
• 31:47
  Speaker 5: already think that the investment world is, you know, overly
• 31:50
  Speaker 5: capitalized when it comes to complexity of acronyms.
• 31:55
  Speaker 2: Yes, but might as well add another. Why not just
• 31:58
  Speaker 2: call it a lick? Exactly right? Anyone, any context.
• 32:01
  Speaker 5: No context that when we're investing in shares, here are
• 32:04
  Speaker 5: some things you can't claim the fees you incur for
• 32:07
  Speaker 5: drawing up an investment plan. So, as I said before,
• 32:10
  Speaker 5: that's the thing that I get frustrated about unless you're
• 32:14
  Speaker 5: carrying on an investment business. Okay, you're probably not, so
• 32:19
  Speaker 5: don't worry about it. Some interest expenses where you borrow
• 32:23
  Speaker 5: money under a capital protected borrowing arrangement to buy shares
• 32:27
  Speaker 5: units in unit trusts and stapled securities, the interest is
• 32:31
  Speaker 5: treated actually as the cost of the capital protection feature
• 32:35
  Speaker 5: again not going to.
• 32:36
  Speaker 2: Mean a lot to you. You just can't claim it.
• 32:38
  Speaker 2: No you're not, don't lie. How did you know that?
• 32:41
  Speaker 5: I just know you well enough by native Beccer Rooney
• 32:44
  Speaker 5: sit down. Also, you can't claim brokerage fees and other
• 32:48
  Speaker 5: transaction costs, but you can include these in the costs
• 32:51
  Speaker 5: to work out your capital gains tax when you sell
• 32:54
  Speaker 5: the shares. So there's just honestly, I feel like I
• 32:57
  Speaker 5: am talking a lot and over complicating it. It shouldn't
• 33:01
  Speaker 5: be that complicated. It is twenty twenty three. Your investment
• 33:06
  Speaker 5: platform that you're investing on is going to provide you.
• 33:09
  Speaker 2: With all of this information.
• 33:11
  Speaker 5: It will either be automated or it will be something
• 33:13
  Speaker 5: that you're able to go into your platform and automatically
• 33:16
  Speaker 5: generate if it's not an email that you get, and
• 33:19
  Speaker 5: it will be I promise, far less complicated than what
• 33:23
  Speaker 5: Beck and I am making it sound right, right, Like
• 33:26
  Speaker 5: all of this talk about like borrowing costs and interest
• 33:28
  Speaker 5: and laics and licks and you know management fees and
• 33:32
  Speaker 5: you know whether you can claim travel. All of that
• 33:34
  Speaker 5: makes sense, but it's far less complicated if you are
• 33:38
  Speaker 5: just a general investor and you've gone on like, I
• 33:41
  Speaker 5: don't know, Raise do it, Spaceship does it.
• 33:44
  Speaker 2: Let's not even start on Spaceship or Raise at the moment.
• 33:46
  Speaker 2: But you know shares is do it self, Wealth do it.
• 33:49
  Speaker 5: Every other investment platform that you are using, they are
• 33:52
  Speaker 5: all going to have reporting for tax time because they
• 33:55
  Speaker 5: are based in Australia.
• 33:57
  Speaker 2: Yeah, okay, so don't stress. Good. I just don't want
• 33:59
  Speaker 2: people to be overwhelmed by going, oh.
• 34:01
  Speaker 5: My god, I became an investor and now it's all
• 34:03
  Speaker 5: so confusing when it comes to tax and I don't
• 34:05
  Speaker 5: want to screw myself over. You're not going to screw
• 34:07
  Speaker 5: yourself over, I promise, because it's not that complicated. Yes,
• 34:11
  Speaker 5: And if you're feeling like it's complicated, it's probably because
• 34:14
  Speaker 5: you haven't looked at the investment reports yet.
• 34:16
  Speaker 2: It's not because you're silly. It's just because you haven't
• 34:18
  Speaker 2: seen it. Yes, exactly right, exactly. I'm so afraid.
• 34:22
  Speaker 5: No, don't be afraid, because it can be really easy,
• 34:24
  Speaker 5: and it's only easy once you learn about it. But
• 34:26
  Speaker 5: you've never learned about it, so that's why it's not
• 34:27
  Speaker 5: making a lot of sense.
• 34:28
  Speaker 2: A little bit scary. I think we need to go
• 34:31
  Speaker 2: to a break.
• 34:32
  Speaker 5: I do want to go google tenant rights so that
• 34:34
  Speaker 5: I can talk about how much I can claim on
• 34:37
  Speaker 5: my rental property and whether I can move in with
• 34:39
  Speaker 5: my tenants over Christmas.
• 34:41
  Speaker 4: That sounds very exciting for you and your tenants.
• 34:44
  Speaker 2: Well let's do lucky. I have no tenants. All right,
• 34:51
  Speaker 2: there we are back.
• 34:53
  Speaker 4: Now, let's jump straight back into it. I want to
• 34:56
  Speaker 4: know about rental and holiday home expenses.
• 35:00
  Speaker 2: Yeah.
• 35:01
  Speaker 5: Is it because you have a rental or holiday home
• 35:03
  Speaker 5: that you haven't spoken to me about before? So many
• 35:06
  Speaker 5: I've got at least ten rentals, at least ten holiday homes,
• 35:09
  Speaker 5: and I just want to know what I can claim on.
• 35:11
  Speaker 2: Oh well, the Internet's now going to come for you
• 35:13
  Speaker 2: and be like, what suck? Did you know you suck?
• 35:16
  Speaker 2: I did know I suck.
• 35:17
  Speaker 4: But also for anyone listening, I am joking, I promise.
• 35:19
  Speaker 2: Yeah. No, she actually doesn't have any hosts.
• 35:22
  Speaker 5: Yeah, but you will get yet. Yet yet is the
• 35:25
  Speaker 5: operative word here. We are optimistic about it. But yes, Beck,
• 35:28
  Speaker 5: you are correct. You can claim interest expenses that you
• 35:31
  Speaker 5: incur on the loan that you used to And.
• 35:33
  Speaker 2: Here's the summary.
• 35:35
  Speaker 5: Buy a rental property, buy a depreciating asset for the
• 35:39
  Speaker 5: rental property. What's a depreciating asset.
• 35:42
  Speaker 2: Beck, I'm going to say air conditioner. Yep, air conditioner.
• 35:46
  Speaker 4: Why because once you buy it, Yeah, it won't go
• 35:50
  Speaker 4: up in value. From there, you're is it exactly anything
• 35:55
  Speaker 4: that's going to decrease in value?
• 35:57
  Speaker 5: Yes, So air conditioner great example, because if you bought
• 36:00
  Speaker 5: it today, it's probably insanely expensive and you're probably not
• 36:03
  Speaker 5: feeling that good about that. Having to buy a new
• 36:05
  Speaker 5: air conditioner for a property that you don't even live
• 36:07
  Speaker 5: in cost you what two grand or something, But if
• 36:10
  Speaker 5: you went to sell it tomorrow, it wouldn't be worth
• 36:12
  Speaker 5: two grand, and in ten years, I guarantee there's a
• 36:14
  Speaker 5: way better version out there.
• 36:15
  Speaker 2: Yeah, right, Like that's exactly what it appreciating us. It is.
• 36:19
  Speaker 5: You can claim expenses for making repairs to the rental property.
• 36:22
  Speaker 5: So for example, if the roof broke during a storm,
• 36:25
  Speaker 5: you could claim that. So a couple of years ago,
• 36:27
  Speaker 5: I lived in a property that had a really big,
• 36:30
  Speaker 5: beautiful skylight. I mean I thought it was beautiful, but
• 36:32
  Speaker 5: it turns out it was just perspex because a couple
• 36:35
  Speaker 5: of years ago we had a massive hailstorm.
• 36:37
  Speaker 2: Do you remember, Like I think it was like.
• 36:39
  Speaker 5: Twenty twenty just pre COVID where that massive hailstorm came
• 36:42
  Speaker 5: through and everyone's car was absolutely ruined.
• 36:45
  Speaker 2: I think I remember there were like golf the size. Yeah,
• 36:48
  Speaker 2: it was absolutely insane.
• 36:49
  Speaker 5: So our skylight just got trashed, like we were having
• 36:53
  Speaker 5: hail come straight through the skylight into our hallway and
• 36:57
  Speaker 5: like we ended up having to like go state my
• 37:00
  Speaker 5: parents house for a couple of days because it was
• 37:02
  Speaker 5: just like so ruined track. Anyway, that didn't cost me
• 37:06
  Speaker 5: anything because I was a tenant. All I had to
• 37:08
  Speaker 5: do was move out. But my owners or the owners
• 37:11
  Speaker 5: of that property, they had to pay to replace it,
• 37:13
  Speaker 5: and that's fine, but they could have claimed that on
• 37:14
  Speaker 5: tax because that was a cost of maintaining the property.
• 37:18
  Speaker 2: Wow, that is so cool. I mean I think the
• 37:21
  Speaker 2: hail wasn't cool. No, it wasn't cool. Kind of sucked.
• 37:24
  Speaker 2: It's just unreal. You can claim that, I like.
• 37:26
  Speaker 5: It finance renovations to the rental property, so like you
• 37:30
  Speaker 5: can claim to you know, obviously, as I mentioned before,
• 37:32
  Speaker 5: pop a new bathroom in for your tenants, which in
• 37:35
  Speaker 5: turn would add a value to your property because you know,
• 37:38
  Speaker 5: updating it. And you can also claim interest expenses where
• 37:41
  Speaker 5: you have pre paid for up.
• 37:43
  Speaker 2: To twelve months in advance.
• 37:46
  Speaker 5: So that is important because you're I see your little
• 37:48
  Speaker 5: glazed over eyes, so what. But essentially, let's say you've
• 37:53
  Speaker 5: got a service and you're paying for insurance, or you're
• 37:55
  Speaker 5: paying for something for your rental property, and it was
• 37:58
  Speaker 5: cheaper to pay for it all at once, like you know,
• 38:01
  Speaker 5: how we've spoken about on the podcast before, how it's
• 38:04
  Speaker 5: one of those things that I think wealthy people forget
• 38:07
  Speaker 5: they have the privilege of, and that's being able to
• 38:09
  Speaker 5: pay things in advance for a significant discount. So like
• 38:12
  Speaker 5: whether that's insurance or health insurance or whatever. So if
• 38:15
  Speaker 5: you're prepaying anything for your rental property or for your
• 38:18
  Speaker 5: investment in advance because it gets you a sweet discount,
• 38:21
  Speaker 5: you can still claim that amount, even if it's for
• 38:24
  Speaker 5: the future. You can claim that on your tax return
• 38:26
  Speaker 5: now because if the payment was made within this first
• 38:29
  Speaker 5: financial year, Okay, so.
• 38:31
  Speaker 2: You can't claim if you're doing the month by month.
• 38:33
  Speaker 5: Payment, no, but you could claim the month by month
• 38:35
  Speaker 5: payments that you've already made. But if you've prepaid into
• 38:38
  Speaker 5: the future, you can claim that. That's a whole conversation,
• 38:41
  Speaker 5: and I think we should do a whole podcast about
• 38:43
  Speaker 5: like wealth privileges, like discounts you get because you're wealthy.
• 38:48
  Speaker 4: I mean it does sound a little bit like that
• 38:50
  Speaker 4: if you have money to invest you can claim.
• 38:51
  Speaker 5: Well, it's kind of like you know, we're talking about
• 38:53
  Speaker 5: this on the podcast, probably a couple of months ago now,
• 38:55
  Speaker 5: because Beck, do you know it's July?
• 38:57
  Speaker 2: Oh my god, do you know what that means? What
• 38:59
  Speaker 2: does that mean? You passed your shoes on the money
• 39:01
  Speaker 2: probation period? Look at you go? Did you joined in here?
• 39:06
  Speaker 2: I knew you get here. Ah, that's so nice. I
• 39:08
  Speaker 2: didn't know. What do you mean you didn't know? I've
• 39:10
  Speaker 2: been begging you to come on the show for so long,
• 39:12
  Speaker 2: and now I win. I win. She's here. Haha, we
• 39:16
  Speaker 2: both win. We both win.
• 39:17
  Speaker 5: But anyway, essentially, I think we should do it whole
• 39:20
  Speaker 5: episode on this idea of wealth privilege, because it's like
• 39:24
  Speaker 5: the shoe concept that we're talking about a couple of
• 39:26
  Speaker 5: months ago, where you know, you were saying that you
• 39:29
  Speaker 5: colored in a pair of shoes with black text. Honestly
• 39:33
  Speaker 5: ten points for innovation, gryffindor thank you. But if you
• 39:36
  Speaker 5: hadn't colored your shoes in, you probably would have gone
• 39:39
  Speaker 5: to like Kmart or Target or something and brought, you know,
• 39:42
  Speaker 5: a reasonable pair of shoes that would have lasted three
• 39:44
  Speaker 5: months and then you would have had to replace it.
• 39:46
  Speaker 5: But if you had significant wealth behind you, or you know,
• 39:49
  Speaker 5: any type of financial privilege, you maybe would have just
• 39:51
  Speaker 5: gone and bought a more expensive pair of shoes that
• 39:53
  Speaker 5: would have lasted two or three years. Yes, and I
• 39:55
  Speaker 5: think that there's such privilege in being able to buy
• 39:58
  Speaker 5: those higher ticket items. Like with insurance, people who have
• 40:02
  Speaker 5: significant savings behind them can go, oh, it's health insurance
• 40:06
  Speaker 5: twenty percent cheaper if I pay it in Bolk right now,
• 40:08
  Speaker 5: Oh great, I'll just pay that. That's a discount that's
• 40:11
  Speaker 5: not then passed on to, from my perspective, the people
• 40:13
  Speaker 5: who need it. So it's this concept that you know,
• 40:17
  Speaker 5: wealthy people continue to get wealthy, but they also have
• 40:20
  Speaker 5: a number of different privileges afforded to them because they
• 40:22
  Speaker 5: can put their money where their mouth is, and we
• 40:24
  Speaker 5: can't do that right now. Yeah, that makes sense anyway.
• 40:28
  Speaker 5: What you can't claim though, let's go through that. So
• 40:30
  Speaker 5: you can't claim interest for periods of use for the
• 40:34
  Speaker 5: property for private purposes, even if it is a short term.
• 40:37
  Speaker 5: So like if you've got a holiday house and then
• 40:39
  Speaker 5: your holidaying in it and you spent two weeks that
• 40:41
  Speaker 5: you can't claim those two weeks gotcha any part of
• 40:45
  Speaker 5: the loan. So like you can claim the interest, but
• 40:47
  Speaker 5: like not the actual loan. You can't claim interest when
• 40:50
  Speaker 5: the property was used for private purposes, when you took
• 40:53
  Speaker 5: out the loan or refinanced it. That's redrawn for private purposes,
• 40:57
  Speaker 5: even if you're ahead in your repayments. You can can't
• 41:00
  Speaker 5: use it when you buy a new home if you
• 41:02
  Speaker 5: don't use it to produce income, even if your rental
• 41:05
  Speaker 5: property is security for that loan, And you can't on
• 41:08
  Speaker 5: funds used to buy vacant land until the time construction
• 41:12
  Speaker 5: on your rental property is complete, like completely completed, not
• 41:15
  Speaker 5: like oh it's halfway there.
• 41:16
  Speaker 2: Like done and it's ready and available for rent.
• 41:19
  Speaker 5: Right, So like that is something that I think a
• 41:22
  Speaker 5: few people get a little bit stuck on when they're like, oh,
• 41:24
  Speaker 5: but I bought land and I'm building an investment property,
• 41:27
  Speaker 5: I should be able.
• 41:27
  Speaker 2: To claim it.
• 41:27
  Speaker 5: It's like, well, the land's vacant, it's not actually an
• 41:30
  Speaker 5: investment yet. It's not like drawing any income from rent.
• 41:33
  Speaker 5: You can't claim that.
• 41:34
  Speaker 2: Yet, right, I see?
• 41:35
  Speaker 5: Okay, So if your loan was used to buy a
• 41:38
  Speaker 5: rental property or something else, like say a car, you
• 41:40
  Speaker 5: can't just repay the part relating to your personal purchase,
• 41:43
  Speaker 5: even when you've refinanced. All loan repayments are appointed across
• 41:47
  Speaker 5: both purposes until all the loan has been repaid and
• 41:50
  Speaker 5: you are no longer claiming interest expenses on that property.
• 41:53
  Speaker 5: So it's a little bit complicated. The best thing to
• 41:55
  Speaker 5: do is obviously talk to your accountant or your mortgage broker.
• 41:58
  Speaker 5: Your mortgage broker is going to have a complete grasp
• 42:01
  Speaker 5: of this, like I you know again shameless plug for
• 42:05
  Speaker 5: my own business, Zella Money. We literally finance thousands of
• 42:10
  Speaker 5: properties a year for clients. And if you haven't already,
• 42:13
  Speaker 5: like it is tax time now, you're probably looking at
• 42:16
  Speaker 5: it going wow, my interest rate really needs looking at.
• 42:18
  Speaker 5: You're probably thinking about the fact that, oh wow, I'm
• 42:20
  Speaker 5: about to come off my fixed period. I need to
• 42:22
  Speaker 5: talk to someone. Go talk to Kate, Go talk to Nikki,
• 42:25
  Speaker 5: Go talk to Jackeline, go talk to anyone in my
• 42:27
  Speaker 5: team who can go. All right, Beck, sit down, what
• 42:29
  Speaker 5: are we looking at?
• 42:30
  Speaker 1: You know?
• 42:31
  Speaker 5: What's the market look like? What's your loan look like,
• 42:33
  Speaker 5: what's the best possible outcome and structure? Right, Because I've
• 42:35
  Speaker 5: said it before, and this is something that a lot
• 42:37
  Speaker 5: of people don't like to hear because we don't like change. Right,
• 42:40
  Speaker 5: But you do not need to be loyal to your bank.
• 42:43
  Speaker 5: I know you might have been with a particular bank
• 42:45
  Speaker 5: since they gave you a little yellow checkbook in primary school,
• 42:49
  Speaker 5: but that doesn't mean that that's going to put you
• 42:51
  Speaker 5: in the best possible position. So sometimes having someone who
• 42:53
  Speaker 5: sits down and goes, oh, well, I have access to
• 42:56
  Speaker 5: seventy different lenders, let me show you which one would
• 42:59
  Speaker 5: work better for your financial position, Like, go and do that.
• 43:03
  Speaker 5: Because a lot of clients that we're talking to at
• 43:05
  Speaker 5: the moment, especially like in June coming up to the
• 43:07
  Speaker 5: end of financial year, were really stressed either about their
• 43:10
  Speaker 5: fixed interest term coming up or the fact that interest
• 43:13
  Speaker 5: rates had increased so much that they weren't able to
• 43:16
  Speaker 5: like balance lifestyle and stuff. So a lot of the
• 43:19
  Speaker 5: time we kind of sat down and restructured them in
• 43:22
  Speaker 5: a way that you know, maybe some clients are moving
• 43:25
  Speaker 5: to not paying principle and interest at the same time,
• 43:28
  Speaker 5: they're just paying interest for a fair period of time
• 43:30
  Speaker 5: so they can like build back up their emergency fund
• 43:33
  Speaker 5: and you know, still have the lifestyle that they deserve
• 43:35
  Speaker 5: while we wait for the interest rates to come down.
• 43:37
  Speaker 5: So definitely, And I mean, do you know what, at
• 43:40
  Speaker 5: the end of the day, I don't care which broker
• 43:42
  Speaker 5: you see. I've got a team of great ones. If
• 43:44
  Speaker 5: you want to see them, that's fantastic. But go and
• 43:46
  Speaker 5: see someone who can put you in the best possible position.
• 43:49
  Speaker 5: Because mortgage broking back it's free for you. Like it's
• 43:53
  Speaker 5: literally a free service. Mortgage brokers cannot charge you individually.
• 43:56
  Speaker 2: That is actually very cool.
• 43:58
  Speaker 5: It's very cool because the main pays them. And I
• 44:00
  Speaker 5: mean then you would think, oh my god, conditions are involved. No,
• 44:03
  Speaker 5: like we legally cannot make more off you, Like the
• 44:06
  Speaker 5: bank shares their profit with me, not part of your
• 44:10
  Speaker 5: interest rate.
• 44:11
  Speaker 2: Like the interest rate is not higher.
• 44:12
  Speaker 5: In fact, it can be lower because of the relationship
• 44:15
  Speaker 5: you're broker has with that bank. So it's all just
• 44:18
  Speaker 5: a sexy process. From my perspective, that's great. It feels
• 44:20
  Speaker 5: like a win win win.
• 44:22
  Speaker 2: Hot girlshit.
• 44:22
  Speaker 4: Okay, So I feel like it's time to talk about
• 44:25
  Speaker 4: my personal favorite topic.
• 44:26
  Speaker 2: Yeah, what is it?
• 44:27
  Speaker 5: And something I know at about that is a straight
• 44:31
  Speaker 5: experience of women in Australia. Yeah, that's exactly right, straight rights,
• 44:36
  Speaker 5: all of that stuff. Also, second to that, I know
• 44:38
  Speaker 5: a lot about obviously capital gains and losses.
• 44:41
  Speaker 2: Oh yeah, and that's actually same. Yeah. And negative and
• 44:45
  Speaker 2: positive gearing. Yeah okay. So I knew you were going
• 44:49
  Speaker 2: to ask this.
• 44:50
  Speaker 5: I was like, Oh, Beck's going to really want to
• 44:51
  Speaker 5: talk about negative and positive gearing in this current environment.
• 44:55
  Speaker 2: And then I wrote some notes. So are you ready perfect?
• 44:57
  Speaker 4: Yes, I was going to say I actually, because I
• 44:59
  Speaker 4: know so much, I fe like I'm going to sit
• 45:00
  Speaker 4: back and let you do the talk.
• 45:03
  Speaker 2: That's okay, Yeah, so please go ahead.
• 45:05
  Speaker 5: Look at the end of the dayback if you personally
• 45:08
  Speaker 5: you were thinking about selling an investment for more than
• 45:11
  Speaker 5: what you acquired it for. So if you went and
• 45:13
  Speaker 5: purchased an investment, we used that example of a share
• 45:15
  Speaker 5: that was ten dollars and it went up to fifteen dollars,
• 45:18
  Speaker 5: you're making what's called a capital gain. So your job
• 45:21
  Speaker 5: as an individual consumer is to include every single capital
• 45:25
  Speaker 5: gain in your tax return in the year that you
• 45:28
  Speaker 5: sold that investment. So although capital gains are taxed at
• 45:32
  Speaker 5: your marginal tax rates. So like if you go to
• 45:34
  Speaker 5: work and your tax rate is thirty two point five percent,
• 45:36
  Speaker 5: that's how much you're going to be taxed on your investments.
• 45:39
  Speaker 5: If you've held that investment for more than twelve months,
• 45:43
  Speaker 5: you're actually only taxed on half that capital gain. So
• 45:47
  Speaker 5: if we look at that example of that ten dollar share,
• 45:49
  Speaker 5: you made five dollars, it was worth fifteen dollars you
• 45:51
  Speaker 5: decided to sell it. If you sold it in less
• 45:54
  Speaker 5: than twelve months, so you held it for like eight
• 45:56
  Speaker 5: or nine months, you'd be taxed on that five dollars,
• 45:59
  Speaker 5: But if you hold it for more than twelve months,
• 46:02
  Speaker 5: your taxed on two dollars fifty instead. So that is
• 46:05
  Speaker 5: a very big money win, and it's also a very
• 46:08
  Speaker 5: big money loss if you haven't thought about capital gains
• 46:11
  Speaker 5: when it comes to investing for the first time, Because
• 46:13
  Speaker 5: how many people in our community have gone, you know what,
• 46:16
  Speaker 5: I really want to invest and I'm so excited about this,
• 46:18
  Speaker 5: and they go and they purchase their shares, and then
• 46:20
  Speaker 5: they might get, you know, some cold feet, or they
• 46:22
  Speaker 5: might see a really good interest rate return and they go, oh,
• 46:24
  Speaker 5: that's really sexy. I'm just going to sell, Like we
• 46:27
  Speaker 5: need to actually have a bigger picture hat on here
• 46:30
  Speaker 5: and go all right, well, Beck, actually you need to
• 46:33
  Speaker 5: hold it for more than twelve months because you could
• 46:35
  Speaker 5: end up losing a fair chunk of it.
• 46:37
  Speaker 2: You don't want to lose stuff just because you didn't know.
• 46:40
  Speaker 5: Yeah, a lot of that happened, and not necessarily in
• 46:43
  Speaker 5: our community, but I've seen a lot of it happen.
• 46:46
  Speaker 5: And let's like, you know, attack finance bros, Simmer finance Bros.
• 46:50
  Speaker 5: Who brought crypto currency and it went out real quick,
• 46:52
  Speaker 5: and then they sold it and then they're like, what
• 46:54
  Speaker 5: the hell? Why am I having to pay so much
• 46:55
  Speaker 5: tax on this?
• 46:56
  Speaker 2: This wasn't worth it? No, because you didn't do your homework, mate, Nah,
• 47:00
  Speaker 2: because you didn't know about capital games, did you.
• 47:03
  Speaker 5: So right now, Beck, you are now officially smarter than
• 47:06
  Speaker 5: a finance bro.
• 47:07
  Speaker 2: WHOA, that's huge. You're welcome. Thank you so much, John
• 47:10
  Speaker 2: on a bestowed to not many. That's very true and
• 47:14
  Speaker 2: I'm very grateful for it. Yeah, you're welcome.
• 47:16
  Speaker 5: But that discount, in effect is going to have the
• 47:19
  Speaker 5: marginal tax rate that you pay, So it is significant
• 47:22
  Speaker 5: and needs to be taken into consideration, and it's applicable
• 47:25
  Speaker 5: on basically everything, so property shares, you know, bonds, whatever,
• 47:30
  Speaker 5: you're purchasing, cryptocurrency. It doesn't matter what it is. It's
• 47:35
  Speaker 5: really important to actually do that, you know what. It
• 47:37
  Speaker 5: doesn't apply on what cars?
• 47:39
  Speaker 2: Oh, depreciation, Yeah.
• 47:42
  Speaker 5: No, there's like lots of rules about it. But I
• 47:44
  Speaker 5: think I've spoken about it on the podcast before. But
• 47:46
  Speaker 5: if you bought a car and then sold it for
• 47:48
  Speaker 5: a profit, that's personal, it's not actually oh yeah, it's
• 47:51
  Speaker 5: why a lot of people buy cars and restore them
• 47:54
  Speaker 5: and sell them, like really high end cars. Like they
• 47:56
  Speaker 5: might buy a fancy rundown Porsche. Not that you are
• 48:00
  Speaker 5: I could afford that, but they might by fancy run
• 48:02
  Speaker 5: down portion to them.
• 48:03
  Speaker 3: It's like a money win because it was like ninety
• 48:04
  Speaker 3: thousand dollars and you're like, oh my god, that's literally
• 48:07
  Speaker 3: completely out of my budget anyway, like that's a house deposit.
• 48:10
  Speaker 5: And then they restore them and sell them for like
• 48:12
  Speaker 5: one fifty. Then they don't pay tax on that profit.
• 48:14
  Speaker 4: Really, I have to like tell the government that they
• 48:18
  Speaker 4: it's completely transparent process, Like they're not doing anything right.
• 48:21
  Speaker 2: It's just that's not an asset that's deemed to be
• 48:24
  Speaker 2: an investment. That's pretty cool. Yeah, isn't it wild? I
• 48:27
  Speaker 2: mean completely unreachable.
• 48:29
  Speaker 5: And I mean if you're listening to this podcast and
• 48:30
  Speaker 5: you're like, that's a good way of making money, like
• 48:32
  Speaker 5: good luck getting in the door, Like, yes, it's a lot,
• 48:35
  Speaker 5: but a lot of people do do that, and that's
• 48:37
  Speaker 5: you know, a bit of a money win.
• 48:38
  Speaker 2: I mean, I could afford a Tarago? Do you reckon?
• 48:41
  Speaker 2: We could do one of those up together back?
• 48:42
  Speaker 3: Oh god?
• 48:43
  Speaker 2: Yeah, love a toarago. Yeah, we could get around Brunswick
• 48:46
  Speaker 2: in that. Yes, it's polite.
• 48:48
  Speaker 5: Do you even sell it for a lot of money too?
• 48:50
  Speaker 5: Like it pimped out chirago?
• 48:52
  Speaker 2: Totally? Those are going for a lot.
• 48:53
  Speaker 4: Maybe not a Toarago specifically, but vans that have like
• 48:56
  Speaker 4: beds in the back.
• 48:57
  Speaker 2: Oh no, specifically talking about it. We could do a torago.
• 49:01
  Speaker 2: Thanks to do it.
• 49:02
  Speaker 5: But if you're selling an investment for less, right, so
• 49:05
  Speaker 5: I know we're talking about profit profit profit. Sometimes you
• 49:08
  Speaker 5: sell an investment for less, there might be a few
• 49:10
  Speaker 5: reasons behind that. You might be selling it because it
• 49:13
  Speaker 5: no longer serves you, it's no longer aligning to your values.
• 49:16
  Speaker 5: You might be selling it because you need the money
• 49:18
  Speaker 5: out asap. You might be selling it because you've looked
• 49:21
  Speaker 5: at it and you're rebalancing your portfolio and you're like, goddamn,
• 49:24
  Speaker 5: this investment has not paid off in a while. I've
• 49:27
  Speaker 5: checked out all the reports, and I'm just going to
• 49:29
  Speaker 5: get rid of it and cut my losses. There could
• 49:31
  Speaker 5: be a number of reasons why you're choosing to sell
• 49:33
  Speaker 5: an investment for less than the cost you acquire it,
• 49:36
  Speaker 5: in which case you're making what's called a capital loss,
• 49:38
  Speaker 5: which is the opposite of a capital gain. And these
• 49:41
  Speaker 5: can still be sexy, So you might be losing money, okay,
• 49:44
  Speaker 5: But we want to make sure that we're not just
• 49:45
  Speaker 5: burying our head in the sand when we're making a loss.
• 49:48
  Speaker 5: We're like keeping track of them because a capital loss
• 49:51
  Speaker 5: on one asset means that you could reduce other capital
• 49:55
  Speaker 5: gains made in the year that that loss occurs. So
• 49:58
  Speaker 5: like all balances itself, we look at our portfolio as
• 50:01
  Speaker 5: a whole. Or if you didn't claim it because you're
• 50:04
  Speaker 5: like Victoria, I made a capital loss on my one investment,
• 50:09
  Speaker 5: I've got nothing to claim it against, Like I.
• 50:11
  Speaker 2: Don't have capital gains to like offset it with.
• 50:13
  Speaker 5: Don't worry, Beck, you can carry it forward to offset
• 50:16
  Speaker 5: future capital gains.
• 50:17
  Speaker 2: Oh my god, So I told you it could be sexy. Yeah.
• 50:21
  Speaker 5: Trueever, I thought we'd have this conversation and use the
• 50:24
  Speaker 5: word sexy as much as we have.
• 50:26
  Speaker 2: Sexy and loss in the same sentence.
• 50:28
  Speaker 5: Yeah, it's novels novel.
• 50:31
  Speaker 2: It's not something you'll hear every day.
• 50:33
  Speaker 5: It's funny because when I do speaking events, like, I
• 50:36
  Speaker 5: am obsessed with speaking events right like, And if you
• 50:38
  Speaker 5: don't know that I do them, now you do.
• 50:39
  Speaker 2: You welcome.
• 50:40
  Speaker 5: I probably do a speaking event or two a week,
• 50:43
  Speaker 5: which is why my voice is always cooked beck. But
• 50:45
  Speaker 5: I go into people's workplaces and I'm like basically trying
• 50:48
  Speaker 5: to convince them that caring about their financial wellness is
• 50:51
  Speaker 5: a genius idea and it is just, so you know,
• 50:54
  Speaker 5: very easy sell. So I go in and I talk
• 50:56
  Speaker 5: about all these things. So I'll be like, oh, here's
• 50:58
  Speaker 5: your money story, let's talk about this, here's what the
• 51:00
  Speaker 5: saving and investing in you know, all these asset classes mean.
• 51:02
  Speaker 2: And then oh, let's talk about superannuation. Super is so sexy.
• 51:06
  Speaker 5: And I literally stand in front of and a couple
• 51:09
  Speaker 5: of weeks ago I did it, and there were two
• 51:10
  Speaker 5: hundred people in the room, and it was like from
• 51:12
  Speaker 5: the ages. I think they said their youngest staff member
• 51:15
  Speaker 5: was like twenty one and their oldest was like in
• 51:17
  Speaker 5: his late sixties, and it was like really diverse. And
• 51:20
  Speaker 5: I'm just like, Superannuation is really sexy in front of
• 51:23
  Speaker 5: all these people. And then after they're like, yeah, the
• 51:25
  Speaker 5: board that was there really enjoyed your presentation.
• 51:27
  Speaker 2: I'm like, oh cool.
• 51:29
  Speaker 5: So I stood in front of an ASX listed team
• 51:32
  Speaker 5: and their board were watching me go, super is really sexy.
• 51:36
  Speaker 5: He let me explain it, and then I'm pretending to
• 51:38
  Speaker 5: get all hot and flustered about it, and I was like,
• 51:40
  Speaker 5: I've never felt more humbled.
• 51:41
  Speaker 4: Oh my gosh, I think, but it is so hot,
• 51:43
  Speaker 4: Like it's so sexy, totally.
• 51:46
  Speaker 5: Have you ever heard of anything as hot as Superannuation.
• 51:49
  Speaker 2: No, I've never seen nor heard.
• 51:51
  Speaker 5: I think my husband and I on our first date
• 51:53
  Speaker 5: talked about Superannuation. I just I knew it was true love.
• 51:58
  Speaker 2: I just knew that we were going to get married.
• 51:59
  Speaker 4: Yeah, he was irresistible. Once you said the word.
• 52:01
  Speaker 2: Super, I care about my super and I was like, oof,
• 52:04
  Speaker 2: that's nice. Yeah all right, tell me about your emergency fun.
• 52:10
  Speaker 2: Yeah that's basic. Let's move on. I haven't got allowed
• 52:12
  Speaker 2: dirty talk on this show. Okay, okay, I'm sorry. I'm
• 52:15
  Speaker 2: sorry I brought us down.
• 52:17
  Speaker 4: This next part I'm very excited about because I actually
• 52:19
  Speaker 4: have no idea what positive and negative gearing is, but
• 52:23
  Speaker 4: I've always wanted to know, and I feel like you're
• 52:25
  Speaker 4: going to explain it in such a nice, gentle way.
• 52:28
  Speaker 2: For me. It's not going to be gentle. It's going
• 52:30
  Speaker 2: to be sexy. Whoa, she's getting very hot.
• 52:34
  Speaker 5: So positive and negative gearing. A lot of people talk
• 52:37
  Speaker 5: about this when they buy property, and they're like, I'm
• 52:40
  Speaker 5: going to positively gear it and it's going to be
• 52:42
  Speaker 5: really sexy, or they're like, yeah, well it's negatively good.
• 52:45
  Speaker 5: Negatively gid properties don't really exist that much nowadays because
• 52:49
  Speaker 5: our interest rates are so high, and I'll explain why.
• 52:52
  Speaker 5: So it's really worth bearing in mind here the financing
• 52:56
  Speaker 5: options that you are choosing when picking an investment. That
• 52:59
  Speaker 5: is why I harp on about the fact that you
• 53:01
  Speaker 5: need to talk to a mortgage broker.
• 53:03
  Speaker 2: Can you bet go.
• 53:04
  Speaker 5: And get a mortgage or a loan on your own? Yes,
• 53:07
  Speaker 5: absolutely you could. You can walk straight down to your
• 53:09
  Speaker 5: bank and you can.
• 53:10
  Speaker 2: Sort it out yourself.
• 53:11
  Speaker 5: Okay, why would you do that when you could talk
• 53:14
  Speaker 5: to someone who does this at a minimum of forty
• 53:17
  Speaker 5: hours a week, day in days out, knows exactly what
• 53:21
  Speaker 5: they're talking about to put you in the best possible position,
• 53:23
  Speaker 5: Because I promise when you walk into your bank, if
• 53:26
  Speaker 5: you talk to a mortgage broker that works for a bank,
• 53:28
  Speaker 5: and I'm so sorry to any mortgage brokers that are
• 53:30
  Speaker 5: listening to this and you're like, I work with a bank,
• 53:32
  Speaker 5: I'd like, I get it. It's a good job. At
• 53:34
  Speaker 5: the end of the day, nobody's better than anybody else.
• 53:36
  Speaker 5: But as a consumer, if you walk into a bank,
• 53:39
  Speaker 5: let's call it the Bank of Victoria, because we're not
• 53:41
  Speaker 5: going to pick on any one bank.
• 53:42
  Speaker 2: Go to the Bank of Victoria.
• 53:43
  Speaker 5: The Bank of Victoria only has access and the brokers
• 53:46
  Speaker 5: that work there only have access to the products that
• 53:48
  Speaker 5: the Bank of Victoria is able to issue.
• 53:51
  Speaker 2: Sure, so they.
• 53:52
  Speaker 5: Might go, oh, well, we have two different mortgage OPTIONSPEC
• 53:55
  Speaker 5: this is the best one for you. They're not lying
• 53:58
  Speaker 5: that is the best option out of all the op
• 54:00
  Speaker 5: that they're able to write for you. They go, beck,
• 54:02
  Speaker 5: this option A is the best for you, and you go,
• 54:05
  Speaker 5: oh yeah, why oh, because compared to B it's just
• 54:08
  Speaker 5: not you know, as good for your situation. You go, oh, okay,
• 54:11
  Speaker 5: no worries. But if you go down the street and
• 54:14
  Speaker 5: talk to a mortgage broker who is independent of a bank,
• 54:18
  Speaker 5: they're going to have access to seventy plus options, so
• 54:20
  Speaker 5: they might go, oh, Beck, I see your situation. Actually,
• 54:23
  Speaker 5: don't go with that original Bank of Victoria that you wanted,
• 54:26
  Speaker 5: because you're actually going to have to have a full
• 54:28
  Speaker 5: twenty percent deposit, or if you have less than twenty
• 54:31
  Speaker 5: percent and you do ten percent deposit, you're actually going to.
• 54:34
  Speaker 2: Need to pay LMI.
• 54:36
  Speaker 5: But because of your career, because of what's going on,
• 54:38
  Speaker 5: I actually have the Bank of Beck and the Bank
• 54:40
  Speaker 5: of Beck they're going to actually wave your LM I
• 54:42
  Speaker 5: and put you in a better possible position. And you
• 54:44
  Speaker 5: know it has all these bells and whistles that you
• 54:46
  Speaker 5: said was really important to you. You're right, well, V
• 54:49
  Speaker 5: I didn't know that that credit union even did mortgages
• 54:51
  Speaker 5: go yeah, no, they're not as big, but they're really
• 54:53
  Speaker 5: good and they're going to put you in the best
• 54:55
  Speaker 5: possible position.
• 54:56
  Speaker 2: You go, great, I've got the best outcome for me.
• 54:59
  Speaker 5: So please make sure that when you are you know,
• 55:02
  Speaker 5: considering your financing options. You're not just going oh, I'm
• 55:06
  Speaker 5: a smart individual and I can absolutely do this. You can,
• 55:09
  Speaker 5: I promise, Beck, if you were going to get a mortgage,
• 55:11
  Speaker 5: you could go on every bank website, look at the rates,
• 55:13
  Speaker 5: look at the interest, look at the fees, and make
• 55:15
  Speaker 5: a decision that makes sense for you. But you don't
• 55:17
  Speaker 5: know what you're looking for, right. You know what the
• 55:20
  Speaker 5: bank is trying to tell you from their sales pages
• 55:22
  Speaker 5: on their mortgages.
• 55:23
  Speaker 2: Right.
• 55:23
  Speaker 5: You go into a bank and I promise that person
• 55:26
  Speaker 5: has been trained in sales, not in financing options, because
• 55:30
  Speaker 5: that's just what works for that environment. It doesn't mean
• 55:32
  Speaker 5: it's wrong, it doesn't mean it's bad. It just means
• 55:34
  Speaker 5: that you, as a consumer, deserve to be educated in
• 55:37
  Speaker 5: what a mortgage broker does. I'm obviously wildly passionate about
• 55:40
  Speaker 5: it because with Kate, I own Zella Money, which is
• 55:43
  Speaker 5: a mortgage broken company. But something that we super pride
• 55:46
  Speaker 5: ourselves on is just this super transparent nature of working
• 55:49
  Speaker 5: with our clients and going all right, Beck, well if
• 55:51
  Speaker 5: that's a goal of yours, Like the amount of times
• 55:53
  Speaker 5: we sit down with people just like you and go, oh,
• 55:56
  Speaker 5: you're not ready. I don't want you to do this
• 55:58
  Speaker 5: yet because you don't have enough of an emergency fund.
• 56:01
  Speaker 5: And that's not me going, oh, you can't afford it, like,
• 56:03
  Speaker 5: it's me going, I actually want you to be in
• 56:04
  Speaker 5: a stronger financial position so this doesn't screw you in
• 56:07
  Speaker 5: the future, yep. Like, And that, to me is one
• 56:09
  Speaker 5: of the hallmarks of a good mortgage broker or a
• 56:11
  Speaker 5: good finance broker, or someone who actually cares.
• 56:14
  Speaker 2: And that's not that common in our industry. Yeah. Sorry, but.
• 56:20
  Speaker 5: All I could do is talk about finance all day.
• 56:23
  Speaker 5: But let's talk about positive and negative gearing. You're going
• 56:25
  Speaker 5: to walk away so educated. So positive is where you
• 56:28
  Speaker 5: borrow money to invest and the income from that investment
• 56:31
  Speaker 5: or that property, for example, like the rent that you
• 56:34
  Speaker 5: get is more than the cost of keeping that investment. Okay,
• 56:38
  Speaker 5: so that sounds sexy. Positive means more than So you
• 56:42
  Speaker 5: might have a mortgage and it is three thousand dollars
• 56:45
  Speaker 5: a month that you pay to the bank, but you're
• 56:47
  Speaker 5: renting it out for four thousand dollars, right, So that
• 56:50
  Speaker 5: means that you're making quote a thousand dollars profit. Sure,
• 56:54
  Speaker 5: you will have to pay tax on that. But positive
• 56:56
  Speaker 5: gearing is essentially where you end up with more money
• 56:58
  Speaker 5: on the table than what it costs you to run
• 57:00
  Speaker 5: that investment. So then obviously we need to take into
• 57:03
  Speaker 5: consideration things like interest and other expenses and you know
• 57:06
  Speaker 5: daily maintenance and you know property fees. But we're just
• 57:09
  Speaker 5: with simplifying this down. It's where you end up with
• 57:11
  Speaker 5: more money. Negative gearing is something that obviously it sounds
• 57:16
  Speaker 5: very sexy and a lot of people want a negatively
• 57:18
  Speaker 5: geared property. And I'll give you an example of why.
• 57:22
  Speaker 1: So.
• 57:22
  Speaker 5: Negative gearing is where you borrow money to invest and
• 57:25
  Speaker 5: the investment income is less than the cost of the investment,
• 57:29
  Speaker 5: so you're out of pocketback. So you might be paying,
• 57:32
  Speaker 5: same example, three thousand dollars a month on a mortgage,
• 57:35
  Speaker 5: but the tenants that you have only paying you two
• 57:38
  Speaker 5: and a half thousand dollars a month, so you have
• 57:40
  Speaker 5: to cough up an additional five hundred bucks.
• 57:42
  Speaker 2: A month for your investment property.
• 57:45
  Speaker 5: And there's a number of reasons why you might do this,
• 57:47
  Speaker 5: and that's why negative gearing is relatively popular and not
• 57:51
  Speaker 5: popular because you go, I don't want to put additional
• 57:53
  Speaker 5: money in. But when you do, investors negatively gear because
• 57:57
  Speaker 5: they can generally claim a tax deduction for investment loss
• 58:01
  Speaker 5: and that kind of brings down their taxable income or
• 58:04
  Speaker 5: helps them in another portion of their life. Right, Like,
• 58:07
  Speaker 5: the aim for that property is that it increases in
• 58:10
  Speaker 5: value so significantly that it will offset the losses that
• 58:13
  Speaker 5: you made in earlier years. So like, as you know,
• 58:16
  Speaker 5: the property market over the world the last thirty or
• 58:18
  Speaker 5: forty years has called gangbusters. And we all know the
• 58:21
  Speaker 5: story of the mediocre, middle aged white man being like
• 58:24
  Speaker 5: I bought my first investment property at the age of twelve,
• 58:28
  Speaker 5: and like you.
• 58:29
  Speaker 2: Know what I mean.
• 58:29
  Speaker 5: They bought it for like twenty thousand dollars and that
• 58:31
  Speaker 5: house is now worth two million or something.
• 58:33
  Speaker 2: Ridiculous.
• 58:34
  Speaker 5: That is why they're doing it, because they might have
• 58:36
  Speaker 5: rented it out and been making quote a loss, but
• 58:38
  Speaker 5: now that property is worth two million dollars, right, so
• 58:41
  Speaker 5: they're in.
• 58:41
  Speaker 2: It for the big bank. Okay.
• 58:44
  Speaker 5: Why I said before that negative gearing is not something
• 58:47
  Speaker 5: that is attractive these days is because properties aren't increasing
• 58:51
  Speaker 5: as much as they used to. Sure, So historically, Beck,
• 58:54
  Speaker 5: let's buy a property in ten years, it will be
• 58:56
  Speaker 5: worth double. That's hot, Like that's where the real value is, right,
• 59:00
  Speaker 5: I mean, ten years will sell that property and we'll
• 59:02
  Speaker 5: have a whole heap of cash money win. But unfortunately,
• 59:06
  Speaker 5: nowadays property doesn't increase in the same way that it
• 59:09
  Speaker 5: used to, and so it's not something that is as
• 59:11
  Speaker 5: attractive to investors. Obviously, in a perfect world, from my perspective,
• 59:16
  Speaker 5: i'd have both. I'd have a property that's positively geared,
• 59:19
  Speaker 5: where my tenants are paying me more than my mortgage,
• 59:21
  Speaker 5: and also the property increases in value significantly. We're not
• 59:24
  Speaker 5: talking about thoughts or feelings on landlords or property ownership
• 59:26
  Speaker 5: or whatever that is right now, that's just us talking
• 59:29
  Speaker 5: about basic economic spec sure, not opinion. But I think
• 59:32
  Speaker 5: it's really important to understand the difference between positive and
• 59:35
  Speaker 5: negative gearing. And that's why if you sat down with
• 59:38
  Speaker 5: me and said, v I've saved house to posit, I
• 59:40
  Speaker 5: really want to buy an investment property, we would extrapolate
• 59:43
  Speaker 5: that all out.
• 59:43
  Speaker 2: And a mortgage broker will do that with you.
• 59:45
  Speaker 5: So they'll sit you down and go, okay, Beck, what's
• 59:47
  Speaker 5: the intention of this purchase and you go for investment? Okay, Well,
• 59:50
  Speaker 5: what do you want to get out of it? Do
• 59:51
  Speaker 5: you want to own this property until you're in your
• 59:54
  Speaker 5: sixties and you're retiring or do you want to own
• 59:56
  Speaker 5: this for like ten twelve years?
• 59:57
  Speaker 2: What's that look like?
• 59:58
  Speaker 5: And you would share that information and we would sit
• 1:00:01
  Speaker 5: down and work out, all right, well, what does rental
• 1:00:03
  Speaker 5: yield in that area look like? A rental yield is
• 1:00:06
  Speaker 5: just basically saying how much will the tenant page week?
• 1:00:09
  Speaker 5: And so you'd work out, all right, well, the tenant
• 1:00:10
  Speaker 5: will pay this month each week, and a property in
• 1:00:12
  Speaker 5: this location costs five hundred thousand dollars to buy, so
• 1:00:15
  Speaker 5: this is what you'd be paying on your mortgage and
• 1:00:18
  Speaker 5: what that looks like. And then because it's investment, we
• 1:00:21
  Speaker 5: might actually look at a few different options. So as
• 1:00:24
  Speaker 5: you know, beck a lot of properties around you know,
• 1:00:26
  Speaker 5: five hundred thousand dollars is probably on the low end
• 1:00:29
  Speaker 5: nowadays of what you can purchase, because the average property
• 1:00:32
  Speaker 5: price in Melbourne right now is about a million dollars,
• 1:00:35
  Speaker 5: which is insane. Let's not talk about it too deeply
• 1:00:37
  Speaker 5: because it will make us very depressed. But let's go
• 1:00:40
  Speaker 5: with that five hundred thousand dollars example.
• 1:00:42
  Speaker 2: You might be able to buy.
• 1:00:43
  Speaker 5: An apartment in Richmond, but you also for five hundred
• 1:00:46
  Speaker 5: thousand dollars might be able to buy a house in
• 1:00:49
  Speaker 5: an estate an hour or so out of the city,
• 1:00:52
  Speaker 5: and both of those are valid options for you, but
• 1:00:56
  Speaker 5: it will depend on what your expectations of rental yield are.
• 1:00:58
  Speaker 5: So you might look at it and go, all right, well,
• 1:01:01
  Speaker 5: the if I spend five hundred thousand dollars on an
• 1:01:02
  Speaker 5: apartment in Richmond, I might be able to rent it
• 1:01:05
  Speaker 5: out for four hundred and fifty or five hundred dollars
• 1:01:07
  Speaker 5: a week. Sure, But if I buy a house in
• 1:01:11
  Speaker 5: the suburbs, in an estate you know might be new
• 1:01:13
  Speaker 5: build for five hundred thousand dollars off, the plan might
• 1:01:16
  Speaker 5: be a relatively small block, and you might be able
• 1:01:18
  Speaker 5: to rent it out for three hundred and fifty dollars.
• 1:01:20
  Speaker 5: So you might look at it and go, wow, the
• 1:01:23
  Speaker 5: properties in Richmond to get more rent That is unequivocally true,
• 1:01:27
  Speaker 5: because it is closer to the city lifestyle. All of
• 1:01:29
  Speaker 5: those other things come into play, But that apartment might
• 1:01:32
  Speaker 5: not increase in value as much as the house will
• 1:01:34
  Speaker 5: over time.
• 1:01:35
  Speaker 2: Sure, the house is.
• 1:01:36
  Speaker 5: More likely to increase in value, but it will depend
• 1:01:38
  Speaker 5: on when and where and how what the economy is
• 1:01:40
  Speaker 5: looking like. Because recently those properties they are increasing in value,
• 1:01:44
  Speaker 5: but not by too much. Sure in comparison to if
• 1:01:48
  Speaker 5: you had done that exact same thing thirty years ago,
• 1:01:51
  Speaker 5: guarantee that property would have made a fair bit right.
• 1:01:54
  Speaker 5: So I think it's important to take into consideration, like
• 1:01:57
  Speaker 5: what does that mean when it comes to purchasing property,
• 1:01:59
  Speaker 5: because you might go, be, I don't think that property
• 1:02:03
  Speaker 5: prices are going to go up that much more, and
• 1:02:05
  Speaker 5: I can afford, you know, five hundred thousand dollars to
• 1:02:08
  Speaker 5: buy an apartment, but I've realized that if I pay
• 1:02:10
  Speaker 5: a little bit more, I can get a better property
• 1:02:13
  Speaker 5: further out, and I might get more capital gain in
• 1:02:15
  Speaker 5: the future. And at that point you might look at
• 1:02:18
  Speaker 5: it and go that means I'll be negatively gared and
• 1:02:20
  Speaker 5: it will cost me some money to owe, but like,
• 1:02:22
  Speaker 5: that's a risk I'm willing to take. So there's just
• 1:02:24
  Speaker 5: a lot to take into consideration. But essentially, positively geared
• 1:02:28
  Speaker 5: is where you borrow money to invest and the income
• 1:02:30
  Speaker 5: from the investment is more than the cost to you
• 1:02:34
  Speaker 5: to keep that property or that asset, and negative is
• 1:02:36
  Speaker 5: the exact opposite.
• 1:02:38
  Speaker 2: I love that.
• 1:02:39
  Speaker 5: Also, to throw another spanner in the work, something called
• 1:02:42
  Speaker 5: a neutrally geared property, and that's where all of the
• 1:02:44
  Speaker 5: costs break even.
• 1:02:45
  Speaker 2: Ah, beautiful, It makes sense, doesn't It does make sense.
• 1:02:48
  Speaker 2: The math is mathing. I think this is a really
• 1:02:50
  Speaker 2: good place to leave it.
• 1:02:52
  Speaker 5: Else No, but I am so done. I cannot fathom
• 1:02:57
  Speaker 5: how we would make an investor's Guide to tax time.
• 1:03:00
  Speaker 5: I'm more sexy. So we're just going to drop it
• 1:03:01
  Speaker 5: here and hope that you guys enjoyed it.
• 1:03:03
  Speaker 2: Awesome, That sounds great. Have a good week, guys.
• 1:03:05
  Speaker 3: We will see you on Friday for you then bye.
• 1:03:14
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