Insurance is often described as a necessary evil. It can be expensive and, if you never need to claim, the premiums can feel like a waste of money. However, in many situations, most people agree that going without at least some cover is too risky. I think most people want the same thing: to protect …
A LinkedIn post caught my eye recently. It used a mocked-up receipt to tally the “cost” of not getting financial advice: a crashed portfolio, extra tax, a clawed-back Age Pension and missed growth. Its message is blunt: making financial mistakes is very costly! I have written before about how to assess whether financial advice is …
For years, $100,000 was the “magic” number for annual retirement spending. However, after several years of higher-than-average inflation, $120,000 is now a more realistic figure. To fund that level of spending from age 60 to age 90, a household needs around $2.1 million in investment assets by age 60, measured in today’s dollars. A perpetual …
In 2023, I wrote that inflation and interest rates could remain higher for longer than most people expected. That view was based on 50 years of history showing that once inflation exceeds 8%, it usually takes a decade or more to settle back down. Underlying inflation subsequently fell from around 4% in mid-2024 to a …
Our approach to constructing investment portfolios is best described as value-aware: investing in high-quality assets when they are attractively priced. Quality determines whether an asset or asset class is worth owning. Price determines when to invest and how much. Value-aware investing requires assessing these factors separately including accurately estimating an assets intrinsic value to determine …
Most investors think good investing is about finding more things to say yes to. More opportunities, more asset classes, more products in the mix. In my experience, the opposite is true. The investors who build the most wealth over a lifetime are the ones with the discipline to say no, repeatedly, to almost everything that …
The government has now introduced two separate 30% minimum taxes. However, only one of them is law. Division 119 is already law and applies a minimum 30% rate of tax to capital gains after 1 July 2027, including capital gains distributed by a family trust. The second measure, taxing trust distributions at a flat …
Over recent months, I have explained why we are currently underweight Australian shares. Australia represents only a small part of global developed markets; its index is concentrated in a few sectors, and we question its capacity to generate acceptable future returns relative to current valuations. Therefore, we believe that investors should allocate more to global …
I would like to explore a funding strategy that may help investors prioritise investing in the highest-quality property they can afford while managing the cash flow impact of quarantined negative gearing. However, before I explain the strategy, I want to make one point very clear: this is not an attempt to justify investing in established …
Property investors who owned assets before Budget night will continue to benefit from negative gearing. Therefore, most will be reluctant to sell, because if they subsequently reinvest in an established property, they will lose immediate access to those tax benefits. However, given the Melbourne property market’s significant underperformance over the past decade, investors are naturally …
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