Investopoly

The difference between a great and an average accountant can be significant. Not only is tax one of your biggest annual expenses, but a great accountant should be able to proactively identify other financial opportunities, in addition to tax-saving measures. Typically, the more complex your financial situation is (e.g. if you are self-employed, running a business, have a trust or SMSF, etc.), the...

This blog’s title is a bit deceptive, because every property you buy is important, for either lifestyle or financial reasons. I contemplated using the title: “why the first property you buy is the most important one” . But the reality is, if you have made a mistake on your first property, you can always start again. The general theme of this blog is to demonstrate that the compounding impact of bu...

My professional life has been all about “the numbers” for more than two decades! So, as an accountant and financial advisor, it pains me to say that numbers are not always right! Numbers are factual, verifiable, logical and the ‘robustness’ gives me a lot of confidence. However, when it comes to investing in property, a focus on numbers alone can cause very costly mistakes. Evidenced-based approac...

Slides - Click here Watch the video - click here My new book is available for pre-order now: Pre-ordering the book will help me get it into bookstores. So please do me a favour - please consider pre-ordering now - links and pre-order bonus are available here: https://prosolution.com.au/book-preorder-bonus Do you have a question for the podcast? Email us at questions@investopoly.com.au . If you&apo...

According to the ABS , the number of people refinancing their mortgage increased by over 63% in the year to May 2020. Quite often people think the only reason to refinance is to obtain a lower interest rate. However, this thinking is incorrect. Typically, you don’t need to refinance to obtain a lower interest rate (more about this below). As an experienced investor myself, I can tell you that ther...

There are three ways to generate passive income; start a business, invest or speculate. The key word in that sentence is passive . Passive means you can generate economic benefits without the requirement of your personal exertion. Since it doesn’t require personal exertion, it frees up your time to spend it on activities or with the people you love. Each of these three options have merit. But the...

Despite the share market volatility as a result of Covid-19, all major industry super funds produced a positive investment return over the past financial year. Whilst that might seem entirely good news, there are some concerns for which industry super fund members should be aware of. Let’s start with the good news first I have compared the largest 8 Australian industry super funds. According to da...

You may have read commentary that the share market isn’t reflecting reality at the moment. For example, the share market can rise by 3% on the same day that we receive bad news in respect to the spread of the virus. Spectators are left thinking how can market values rise when global economic expectations are so negative? That is a fair question. Then there’s stocks like Tesla in the US and Afterpa...

Melbourne’s Covid transmission outbreak has been widely publicised by the media. Melbourne’s daily positive test rate is relatively benign by world standards (i.e. 0.5-0.6% versus 7.5% in the USA). However, the reinstated 6-week lockdown of Melbourne is likely to have a negative impact on Australia’s economy. Melbourne is responsible for producing over 19% of Australia’s GDP. Spending has bounced...

The price you pay for an investment property will only matter if you purchase the wrong asset. An investment grade asset will, in the long run, mask any purchase price errors that you may have made. That is why focusing on the quality of the asset is easily the most important thing you must do when investing in property. Simple math proves timing the market or buying below fair value is relatively...

Over the past decade, investors and large institutions have been deserting expensive active fund managers in return for using their cheaper index equivalents. According to Morningstar , investors in the US withdrew $USD204 million from actively managed investments (net) in the 2019 calendar year. However, low cost index funds continued to grow in popularity receiving (net) $USD162 million of new m...

If you have a couple of thousand dollars surplus cash each month, what is the most effective way to invest it? You could invest in the share market, repay your mortgage(s) or invest in property. But there’s another strategy that might be particularly more attractive, especially since mortgage interest rates are ridiculously low at the moment. You may not want to repay debt or invest in shares or p...

With the financial year coming to a close, I thought it was timely to share some of the common strategies we consider when helping clients minimise their taxation liabilities. Of course, none of the information below should be considered personal taxation advice. I don’t know your circumstances and everyone’s situation is different. Therefore, please don’t act solely on the information contained i...

Global ratings agency, Fitch estimates that the value of Quantitative Easing (QE) implemented this year could reach $9 trillion! To put that in context, that is equal to more than half the cumulative total global QE that occurred between 2009 and 2018! The Federal Reserve in the US has alone pumped $4 trillion into the market over the past 11 weeks. This is absolutely unprecedented. Should investo...

There have been a number of economists and commentators who have predicted that property values will fall anywhere between 10% and 32% this year. It seems like it’s almost become a competition for who can be the most bearish. However, my view is a lot less bearish. I believe property values won’t fall by more than 10% and it’s quite possible that they might not fall at all. You could be excused fo...

If many employees continue to work from home, then perhaps demand for property in close proximity to capital city CBD’s will fall. And conversely, perhaps demand for property in regional centres that are well serviced by pubic transport (trains) will increase. This encourages us to consider whether the work-from-home movement will change the way we invest in property. Covid forced us to work from...

With interest rates at all-time lows, in some situations, it is now a lot cheaper to be an owner-occupier than a renter. And with the prospect of interest rates not rising anytime soon, it could stay that way for a few years, unless the market changes. I thought it would be interesting to analyse the potential impact of this phenomenon. Obviously, there are some practical implications for people c...

Due to the impact of coronavirus, many people are having to navigate unexpected changes in income and expenses for the first time in their life. This is something I have been talking about over the past few weeks with clients, during presentations and podcast interviews. Cash flow management is the cornerstone of successful wealth accumulation. It doesn’t matter how much you earn, if you don’t man...

A few months ago, a reader of this blog asked me to analyse two options. Option one is to borrow more money to fund an upgrade of your family home and consequently enjoy tax-free capital gains. The second option is to invest in property. The reader wanted to know which is the best option, net of all taxes such as capital gains and land tax? Widen the scope of the question I’d like to widen the sco...

CBA Economics stated last week that property price declines are “inevitable”. It has forecast that prices will fall by circa 10% in Melbourne and Sydney over the next 6 months. It cited many reasons for this forecast including higher unemployment, lower economic activity, lower mortgage volumes, falling rents and fewer overseas buyers. I wanted to take some time to look at this forecast and provid...

If there is one certainty in life, it’s that there’s always going to be some uncertainty. Of course, there are times in our lives where there’s higher levels of uncertainty, which can be very stressful. But, to a degree, we all have to become comfortable with some level of ‘uncertainty’ and learn how to dance with it. This is especially true with financial decisions. Markets never exhibit zero ris...

We provide answers to a number of frequently asked questions below. We will continue to add new questions and update our answers as events and government announcements unfold. Questions about pausing loan repayments How does the loan repayment pause work? Banks are offering customers the ability to pause residential loan repayments for up to 6 months if they have been impacted financially by coron...

With most people being required by their employer to work from home, I thought it would be timely to update you on what deductions you can claim and what evidence you need as substantiation. Start keeping record now Remember, the onus of proof is on the taxpayer to substantiate any deductions they claim. If you use a tax agent, you probably won’t have to lodge this year’s income tax return until M...

Author and property investor, Michal Yardney says “real estate investing is a game of finance with some houses thrown in the middle”. People think that the scarce resource is investment-grade property. But the scarce resource is actually borrowing capacity – as everyone has a limit to how much they can and should borrow. In a normal market, investors that seek professional advice from a buyers’ ag...

Given many people are worried about the unknown consequences of the Coronavirus, I thought it was timely for me to share my thoughts and advice. Like in all ‘crises’, it is important to not let emotion or fear drive your responses. ‘A steady hand on the tiller’ is the best approach when navigating any storm. I acknowledge that the Coronavirus may have caused significant emotional and heath distres...