For many Australian’s, their home loan is their largest expense. And property investors should seek to minimise their borrowing costs (interest) as it’s one of the top three factors that directly impacts investment success as outlined in this blog. With this in mind, I thought it was timely to look at the current opportunities in the mortgage/interest rate market.
What the “market” is expecting
As the chart below illustrates, the implied yield on 30-day cash rate futures suggests that the market expects the cash rate to be 0.25% lower in the second half of 2019. These future contracts are used primarily by large institutions and banks and essentially represent the consensus view on the direction of interest rates in the short term (i.e. next 18 months). Of course, the market is not always right – it’s only one indicator.
https://www.prosolution.com.au/wp-content/uploads/2019/03/cash-rate-futuresv2.jpg
Economist predictions
Bill Evans, the Chief Economist for Westpac, was the first to predict that the RBA will cut its cash rate twice in 2019 (0.25% in August and then again in November). Since making this prediction on 20 February 2019, many other economists have joined him. Mr Evans was the first economist to correctly predict the start of the RBA’s easing cycle in 2011 – so he has good form.
Mr Evans cited weaker than expected GDP growth, the “wealth effect”[1] associated with a softer property market and an expected increase in our savings rate as the main reasons for forming his view.
What would have to happen for the RBA to cut
The RBA has previously said on a number of occasions that it is not concerned by the falling house prices. This commentary has never made sense to me because a falling property market definitely impacts on consumer confidence – look at what happened in the USA when the GCF hit. Perhaps the RBA was hoping its positive rhetoric would persuade Australian’s to ignore the wealth effect. However, in the last few weeks the RBA has changed its tune and acknowledge the risk that a soft property market might have on the wider economy.
Also, the RBA has downgraded its GDP growth forecast. I think the RBA would need to see an increase in the unemployment rate before it would be willing to cut the cash rate. Australia’s unemployment rate is still relatively low at 5.1% as illustrated in the chart below.
https://www.prosolution.com.au/wp-content/uploads/2019/03/unemployment-rate.png
Will the banks pass it on?
Of course, if the RBA does cut the cash rate below its current level of 1.5% p.a., the big question is; will the banks pass all of the reduction onto borrowers?
On one hand, given the scrutiny and negative publicity generated by the recent Royal Commission, you would think they would have to be very brave (read stupid or arrogant) to not pass it all on.
That said, a few small lenders have increased variable rates this year (e.g. ING) which suggest funding costs have been on the rise. Perhaps the banks will use this opportunity t

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A client was telling me a story about how the Chief Financial Officer (CFO) of a business he used to own passed away unexpectantly. Of course, it was a very sad event both personally and professionally. But an unexpected additional consequence was that the business was locked out of internet banking. The CFO had many important passwords committed to memory (for security). The business had to pay staff the week following his death without any access to banking! This taught my client a very important personal lesson. That is, make sure your loved ones are looked after in the event of your unexpected demise. Don’t leave them in the dark!
Here are a few things you must organise.
Passwords galore!
Its ridiculous how many passwords we have these days – almost too many to keep track of. If your spouse or loved ones don’t have ready access to your passwords, it can be very frustrating and stressful – at a time where additional and avoidable stress is definitely unwanted. You need to make a list of important passwords, including:

• Online banking
• Superannuation accounts;
• Managed fund providers or share brokers; and
• Any other investment providers.

There are password apps you can use or a simple password protected Excel spreadsheet does the trick. Save the file in Dropbox (or similar) and share it with your spouse (or executor/s). This is simple to do and will avoid a lot of unnecessary stress.
Summary of assets and liabilities
It is important to have an up-to-date summary of all your assets and liabilities. This will make it easier for your executor/s to ascertain what assets you have, their value and what immediate actions need to be taken, if any. It is also useful if you have a summary of regular financial commitments such as loan repayments to ensure these are met on time. This will help your executor get on top of everything. Perhaps you can include this information in the password-protected Excel file mentioned above.
List of personal risk insurances
You should also maintain a list of personal risk insurances such as income protection, life and total & permanent disability insurances. You need to note policy numbers, sum insures and insurer. This will be important because if you have an accident, your partner/spouse may be able to lodge a claim on your behalf.
Who to contact list?
Your spouse or loved ones will need to know who to speak to for help. Therefore, keep a list of any trusted advisors including a description of what they do for you and when to contact them, including:

• Financial advisor
• Accountant/tax advisors
• Insurance advisor
• Estate lawyer (person who drafted your will)
• Mortgage broker and/or banker.

Your investment strategy and what steps to take
Sharing your investment strategy with your spouse and loved ones is very important as it will ensure they have a clear picture of what steps to take. They should know exactly what to do if you pass away (e.g. sell assets, repay loans, invest insurance proceeds, etc.) and what to do to have a safe retirement. They should also know who to speak to and when.
This will obviously be a very stressful and emotionally painful time for them, so its best if you can ensure they don’t have any financial worries (or at least less worries). Communicating this important information will ensure they aren’t left in the dark and don’t need to worry about the future.
Each spouse MUST understand their

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How to get more control over how your super is invested and the fees you pay (and lower fees)Accountants often recommend establishing a Self Managed Super Funds (SMSF) as the best way to gain full control over how your super is invested. But most people don’t want the responsibility and compliance headaches that a SMSF can create.
A wrap platform is an excellent alternative to a SMSF. In fact, they are simpler, don’t come with any compliance obligations and are often lower cost. But they still give investors a lot of control over where and how their super is invested.
Steer clear of retail super funds
In my 17 years of experience in reviewing super funds, I have found that retail funds (e.g. AMP, BT, Colonial, MLC, etc.) invariably charge high fees and deliver very poor investment returns. This was confirmed by the Productivity Commission’s recent report into super. Therefore, if you are in a retail super fund, it’s almost certain that you would be better off switching (but you must consider any ancillary benefits and/or insurance before you do).
Concerns with industry super funds
I have written about my concerns with industry super funds in the past. I summarise my main concerns below:
§ Firstly, trade unions have a lot of control over the industry super funds, how they are operated and ultimately their lack of productivity. This ‘influence’ was highlighted during The Royal Commission into Trade Union Governance and Corruption.§ Secondly, I am concern but the amount of money paid to trade unions and I am concerned that there aren’t enough checks-and-balances. A report in 2017 highlighted that trade unions received over $18 million from industry super funds over a 4 year period. Here’s another article from January this year stating that KPMG calculated that Cbus paid over $7 million to unions over a four year period ending in 2014. The operation of (1) trade unions and (2) investing people’s retirement savings are two separate activities and should be completely independent.§ Thirdly, they lack a lot of transparency and accountability with respect to investment performance as I have written about here.§ And finally, given their scale, they should be reducing fees, not increasing them – a point which the Productivity Commission has made in its recent investigation.
Having said all that, industry funds are much better than retail funds. And if you are not going to use a wrap account (or SMSF), then they are the best solution for your super. Hostplus, Cbus and AustralianSuper tend to be the best performers in terms of investment returns. AustralianSuper has the lowest fees out of the three (by a reasonable margin) so its typically my preferred option.
What is a wrap platform?
A wrap platform is a portal (super account) that helps you invest your super. It provides y

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What is the best way to manage cash flow? Do you need a monthly budget to track every single cent? Or is high-level budgeting ok? And, how much is too much to spend i.e. how do you know if you are over-spending compared to your peers? This blog will answer these questions and many more.
You cannot earn your way to improved cash flow
Have you heard the saying; “it’s not what you earn, it’s what you spend that counts”? Well, it’s true! If you have poor cash flow management habits, it doesn’t matter how much you earn, you will always find it very difficult to save money. I have met people with seven figure incomes and very little wealth to show for it. And I have clients on five figure incomes that have accumulated substantial wealth.
Of course, the more you earn, the more you can “afford” to spend on living expenses. But best-practice cash flow management is mostly about avoiding over-spending – rather than turning into a scrooge. I define over-spending as expenditure that adds very little to your standard of living (or only provides very temporary improvements). Typically, people with poor (or no) cash flow management techniques can trim expenses without it having a material impact on their standard of living.
The cost of doing nothing is too big to ignore!
Sometimes people avoid facing the truth because it’s painful. When it comes to cash flow, they avoid taking steps to manage it better because they fear (or know) they’ll have to make painful compromises.
However, you can’t make a problem disappear just by ignoring it. In fact, ignoring a cash flow problem will only make it worse. You will have to pay the price of poor cash flow management at some point. And the longer you avoid it, the more painful it will be. Worst case is that you will have to sell your home to reduce debt, be reliant on public housing and will have to live off the aged pension – which is less than $36,000 per year for a couple!
You can’t build wealth if you spend everything you earn. The good news is that 90% of people can improve cash flow management pretty easily without it impacting on their standard of living. For others, it will require a painful but necessary adjustment – but less painful than it will be if you continue to spend all your income.
Spending: minimise non-discretionary, more experiences and less “stuff”
There are two types of expenses; discretionary and non-discretionary. Non-discretionary expenses include items such as food, power, insurance and so on. There are ways to minimise these expenses as listed in our financial hacks. Non-discretionary expenses are necessary but really don’t enhance our ‘enjoyment’ of life. Non-discretionary expenses tend to be relatively finite and there’s a limited amount you can do to minimise them. Discretionary expenses are all the things we buy purely for pleasure but could live without (if we needed to).
The main purpose of non-discretionary expenses is to make you happy and give you a sense of enjoyment. Research shows that expenditure on experiences (holidays, sky diving, etc.) have the greatest impact on our happiness compared to buying “stuff”. Buying “stuff” (e.g. designer shoes) typically gives you a temporary hit of dopamine but it never lasts (and you need a bigger hit next time). Let’s face it. We reminisce more about past holidays than we do about past purchases. Don’t use money to change your mood – it’s an expensive treatment plan and never works long-term – spend money wise

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Perhaps a softer property market will allow you to buy a future home now for below intrinsic value – especially if you plan to upsize or downsize in the next few years. Purchasers are in a stronger position in a softer market – especially with a backdrop of lower median property prices and lower auction clearance rates. This blog considers the financial merits of this strategy and what to look out for.
What’s the benefit of doing this now?
The advantage of buying at the bottom of the market (or close to it) is the probability that you will pay less for a property than you would if you purchased it in a more balanced or buoyant market. I wrote a piece for The Australian (here) in December stating that I believed we were close to the bottom of the market. And I still hold this view (e.g. auction clearance rates picked up over the weekend). So, if you agree that the market is unlikely to fall materially from here, then now might be a good opportunity to purchase a future home.
In addition to the benefit of buying below intrinsic value are lower transactional costs (stamp duty) and lower reoccurring holding costs (i.e. lower borrowings means a lower annual interest expense).
Buy now and rent it out
One strategy could include buying a replacement home now and tenanting the property until (1) you are ready to occupy it and/or (2) the property market improves and is more of a sellers’ market. This might help you to ‘buy low and sell high’ thereby maximising your equity and financial position.
An additional benefit to this strategy is that you will ‘lock-in’ your entitlement to benefit from negative gearing. This is important if you believe that the ALP will win the federal election in May and implement their ban on negative gearing. Purchasing before this ban is implemented could save you a lot of tax.
In order to do this, you must consider two factors:1. Does your borrowing capacity allow you to buy now and sell later? As I have written about in the past, borrowing capacity has contracted a lot and just because you think you can afford a loan, doesn’t mean a bank will share the same opinion; and2. Can you afford the debt from a cash flow perspective? Typically, I test affordability at an interest rate of 7% p.a. – to ensure debt is still manageable in a higher interest rate environment. Obviously, interest rates are a lot lower than 7% p.a. at the moment. And the market has priced in an RBA rate cut this year – although we’d probably need to see the unemployment rate increase for that to happen. So, there is a reasonable argument to be made to say that rates will remain low for a while. But don’t get seduced by the lower rates and risk over-borrowing.
Market arbitrage has its risks
Market arbitrage refers to buying and selling in different markets. This strategy is not without risk. Obviously, the key assumption behind this strategy is that buying today will cost you less than say buying in 5 years’ time. And it’s also assumed that selling your existing property in 5 years’ time will yield a higher sales price than selling now. However, this is merely an assumption and it could turn out to be wrong. Therefore, the lowest-risk approach is to buy and sell in the same market (i.e. this year).
However, for some people, the risk is worth taking i.e. buying now and selling in a few years’ time. This depends on your risk profile, financial position, location of properties and so on. If it’

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If you are contemplating investing in property, should you buy now or wait? What if prices fall further this year? Maybe you would be better off waiting?
As my analysis below reveals, buying for less than market value or at the bottom of the market (i.e. buying well), has very little impact. The price we pay for a property has little impact on success as investors. So, the desire to buy below market is probably driven more by ego more than fundamentals.
Timing the market is a flawed strategy
No one in the world has developed a reliable system for predicting how asset classes will change in the short term. As Mr Buffett says; “forecasters will fill your ears but never your pockets”. Therefore, if you think you can implement a strategy that involves picking the bottom of the market, think again! Not only is it impossible to do, but many of the indicators used to measure the health of the property market are lag indicators. That is, by the time the indicators change, prices would have already rebounded somewhat.How important is it to buy well?
This is a good question and one that I have spent a lot of time analysing. I financially modelled a $750,000 property investment and measured the sensitivity to the following factors/assumptions:

1. Capital growth – this is the average rate of appreciation in value over the next 20 years. My base case assumption is a nominal rate of 7% p.a. (assuming an inflation rate of 2.5% p.a.). The range I used was 4% (being only 1.5% above inflation) and 10% (which I have observed in blue-chip locations over the past 30 years).
2. Buying above or under fair market value – I measured the impact of buying 10% below market value versus over-paying by 10%.
3. Capital gains tax (CGT) – I measured the impact of paying no CGT (e.g. owning in a SMSF) versus paying the maximum CGT (e.g. the ALP’s policy is to halve the CGT discount). The midpoint I assumed is based on current laws at a tax rate of 39% p.a.
4. Interest rates – my midpoint is 6% but I sensitised using a range of 4% to 8% p.a.
5. Rental yield – this is the amount of gross rental income you will receive compared to the properties value (expressed as a percentage). I have assumed a normalised mid-point of 3% but then also tested a range of 2% to 5%.
6. Rental growth rate – this is how much the rent will increase by on average each year. I have used a growth rate range of 3% – being slightly above CPI and 7% – which is relatively high.
7. Negative gearing – as has been well publicised, the ALP will ban negative gearing on existing properties (if you own existing investments, these are excluded, so you won’t be impacted). As such, I sensitised the impact of negative gearing on an investment. I compared no negative gearing versus maximal benefit at tax rate of 47%. The midpoint was 39%.

What I did is held all factors that same (i.e. at the midpoint/base case) and changed one variable from high to low to measure the impact on after tax cash (assuming you hold the investment property for 20 years and then sell it). This included the cash flow cost plus the after-tax sale proceeds.
And the winner is…As the chart below illustrates, buying under fair market value has very little impact on the success of your investment. A property’s capital growth rate is by far the most important factor. A distant second is capital gains tax, then interest rate and finally rental income.
Download chart here: https://www.prosolution.com.au/wp-content/uploads/2019/02/market-timing.png
What steps should you take as a result of this?
If you are investing i

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It was reported over the weekend that private school fees have increased by 3.6% over the past year. However, the longer-term trend is closer to 5% p.a. Private school fees are tipped to soon exceed $40,000! That is a big hit to after-tax cash flow. This blog compares three financial strategies you can use to fund future school fees.
What is the future cost?
There are two things to keep in mind with respect to future education costs. Firstly, the average rate of fee increases is close to 5% p.a. Secondly, these expenses must be paid from after-tax income – so you have to earn a lot more pre-tax in order to meet these costs.
A child born this year will most likely start secondary school in year 2031. Assuming fees increase 5% p.a. and inflation remains at 2% p.a., the total cost of secondary private school education will be $280,000 in today’s dollars. A parent will need to earn at least $460,000 before tax (in today’s dollars) over a 6-year period to meet these costs – an average of $75,000 p.a. per child.
I am sure you agree that this is a substantial cost and one that you must plan for as early as possible.
Steer clear of education funds
The most prominent education fund producer is ASG. It creates structured savings plan so that parents will be better positioned to meet future education costs. However, their fees are high and investment returns are terrible. Parents would be far better off following one of the lower-cost, more transparent options below.
Strategy One: Park savings in your home loan
The best place to save money is to park it in your home loan and redraw it whenever you need it. The reason being is that the home loan interest rate is much higher than the deposit rate. At best, you might receive 2.5% p.a. in interest for money in a savings bank account. The home loan mortgage interest rate is currently around 4% p.a.I completed my financial projections using a home loan interest rate of 5% over the next 18 years (the average rate over this time will likely be higher – but I’m being conservative). I worked out that parents would need to direct additional cash of $1,200 per month into their home loan over the next 18 years in order to fund their children’s school fees. That is, in year 2031 they would redraw these extra repayments from their home loan to pay for their children’s school fees as they are incurred.
This approach (i.e. $1,200 per month for 18 years) costs $258,000 in after tax dollars – slightly less than the $280,000 above – because of the interest saving generated by the extra repayments.
This approach is very low risk because your return (being the home loan interest you will save) is certain. That is, home loan interest rates will almost always be between 3.5% and 8% p.a.
You can also park money in an offset linked to an investment loan – although it is less effective than a (non-tax-deductible) home loan.
Strategy Two: Invest in the share market
This option includes investing a regular amount in the share market. You don’t need to ‘pick’ shares in order to implement this strategy. Instead, you can use a low-cost, diversified index fund from Vanguard to do this. This means you only need to buy shares in one stock (codes are VDHG or VDGR for example) each month in order

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One of the biggest mistakes that people make is deciding to invest in a few assets/investments and then, after that, figure out what their strategy looks like. Worse still, many financial services and property businesses do this too. They market investments that initially appear attractive but ultimately won’t help you achieve your goals. I outline why this is a very bad approach and what to do instead.
Sexy investments sell
The most successful way to sell investments is to market them using the two primary emotions of fear or greed. An investment that promises high returns with little risk will typically have great appeal to the mass-market. The problem is that sexiness and fundamentals are almost always inversely related. Fundamentally sound investments are usually dry, dull and boring. Therefore, it is difficult to get people excited about them. However, shiny objects attract a whole lot more attention.
The fastest way for a financial services business to attract more investors is to market sexy investments. The problem with this approach is that whilst it might deliver short term profit (to the business – probably not the investor), it is at the costly expense of creating long term value for both the business and the investor.
Be sceptical of businesses that market investments
No one trusts used-car salespeople. The reason is that we are well aware that their goal is to make a sale and they might say or do anything to achieve that goal. Its not that they are the enemy or bad people. It’s just that we have a very healthy level of scepticism for anything they say or do.
The same is true for any financial services business that markets investments. Their goal is to highlight the benefit of their investments and pitch to you why it is perfect for you. Therefore, you must maintain a healthy level of scepticism. If you want to find someone you can trust, find someone that has nothing to sell you (other than their advice).
Here are two different examples of what I’m talking about:
§ Because borrowing capacity has tightened, some property advisors are now recommending their clients invest in regional locations – because they no longer have the borrowing capacity to invest in blue-chip locations. However, these same businesses have in the past communicated that regional locations have inferior investment prospects. It is clear to me that businesses like these are designing their advice to fit their client base. Instead, I believe that you must have the integrity to sick to what you believe is right and attract the clients that can afford to invest. A reputable business should never adjust their advice to accommodate the market or client demand. My advice is always; if you can’t afford to invest in an investment-grade property, then do not invest in property. Simple.§§ Some fund managers offer ‘high conviction’ share market investments. These are managed funds that invest in a small, concentrated portfolio of holdings (so they have high concentration risk). Often, these funds have high turnover too – meaning they buy and sell stocks regularly triggering tax and expenses. As such, almost their entire investment return is in the form of income and capital gains i.e. very little capital growth. Therefore, whilst the headline investment returns might seem attractive, they are very tax-inefficient which makes them financially inefficient because you lose half of your return each year in tax.§Would you swim to Europe?
Swimming has a lot of positives. It doesn’t cost anything. It is good for your health. Many people find the activity enjoyable. However, e

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If the ALP wins the election in May and ban negative gearing on established property (as proposed), does that mean property is no longer a good asset class to invest in? The answer is no, if you do it right. In an environment of no negative gearing, capital growth becomes even more important.
The razzle dazzle of tax savings is too tempting for some people to ignore
Too many people have been seduced by tax benefits when selecting a property investment. Potential tax savings distract investors’ attention away from an asset’s poor quality (lack of fundamentals). The problem is that you have to live with the asset’s quality long after the tax savings have evaporated. And the asset’s quality will dictate whether you will enjoy adequate investment returns (mostly in the form of capital growth) or not.
Tax benefits can come in two ways.
Steer clear of depreciation benefits
Firstly, there’s ‘depreciation’ which is a measure of the reduction of a dwellings value over time. If you are the first owner of a property, you can claim a depreciation deduction in respect to the building and its fittings and fixtures. The problem with depreciation is that it actually happens. It’s like driving a new car off the lot – they say it immediately depreciates by 10%! A new building will depreciate substantially in the first decade of ownership. Therefore, for the investment to work, the land value must appreciate at a much faster rate to (1) offset the building depreciation and (2) contribute to the property’s overall value appreciation (if there is to be any). The problem is that new-build properties typically have a smaller land value component so that doesn’t happen. The existence of a depreciation benefit is a red flag that a property isn’t investment-grade and therefore should be avoided from an investment perspective.
Negative gearing should help you generate capital gains
Amazon is worth over $USD830 billion according to the stock market. However, it makes $USD3 billion profit per year – which is not a lot for a company that is worth so much. Therefore, the reason that people invest in Amazon is because they think that the businesses will be worth a lot more in the future. Amazon shareholders are clearly investing for growth, not income (it’s never paid a dividend to shareholders).
The same concept is true for investment-grade property. Smart investors don’t invest for negative gearing. Negative gearing is merely a positive consequence of their investment. Smart investors are targeting capital growth so that whatever they lose in income (net loss after tax benefits) will be dwarfed by the amount of capital growth in the long run. However, some investors have incorrectly focused on (or been seduced by) tax savings when making investment decisions. In reality, this is an unwelcome distraction from what is ultimately going to make-or-break an investment in the long run.
In the future, you’ll have to be more picky
If you agree that the primary reason we invest in property is for capital growth, then, when considering any prospective investment, we must consider its future capital growth prospects. That is, we must be sure that a property’s future growth will more than offset any income losses to the extent that the net investment returns are still very healthy.The existence of negative gearing means that an investor needs a lower amount of capital growth in order to generate an adequate return. However, if negative gearing was to be abolished, I would argue that all investors must become even more

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When working out a retirement strategy, often people try to work out the value of investments they will need by multiplying the amount of annual retirement income they will need by a nominal interest rate. For example, if you want $100,000 p.a. in retirement and you think you can earn an income rate of say 3% p.a., you’ll need $3.4 million of net investment assets. The more aggressive you are with your interest rate assumption, the fewer assets you need to meet your goal. The reverse is also true.
Beware, there are a couple of pitfalls with this approach.
It results in a lazy asset allocation
If all of your investment assets are invested in cash or fixed interest investments (such as government and corporate bonds) in order to generate a stable income, you have little protection from inflation. This is because these investments do not provide any capital growth. All their return is provided in the form of income and your capital stays the same – think term deposit.
This means that over time, your assets will be worth less and less in real terms – because of inflation, your purchasing power is reduced. For example, $1 million today will be equivalent to $477,000 in 30 years’ time assuming the inflation rate averages 2.5% p.a. over that period.
People are living longer. Medical technology is improving at an increasing rate. Therefore, we must consider the likelihood of living to age 100 and beyond. To ensure you don’t run out of money, you must ensure you invest in assets that provide some capital growth so that your money at least keeps up with inflation and hopefully increases over time.You must account for taxes
Of course, you must account for any taxation liabilities. If all your money is inside super (and your balance is less than $1.6 million), then no tax will apply if you draw a pension. However, if you have assets outside of super, you will need to account for any income tax consequences. The good news however is that an individual can earn approximately $20,500 per year before they need to pay any tax. Therefore, hopefully you can share any personal income between you and your spouse to minimise any taxation liabilities. My point here is you must think carefully about ownership structures i.e. where your investments are held. Super is excellent, but you don’t want to put all your eggs in one basket. Putting all investment assets in one person’s name also typically isn’t very wise in the long run.
Markets will go up and down
The role of asset allocation (i.e. the methodology used to spread your money across various asset classes) is to smooth returns and minimises losses. That is, some asset classes are negatively correlated which means when one asset class generates high returns, the other will likely generate low or negative returns. However, if you invest in both asset classes in the right proportions, you will achieve better investment outcomes at a portfolio level. This (i.e. asset allocation) is the most important decision a professional advisor can help you with. Its an investor’s most important decision. Because investors cannot control markets or returns. But they can control where and how they invest their monies.
Therefore, by putting all your money in cash and fixed income assets, you risk missing out on a lot of returns. Take the last decade for example. Government bond returns have been historically very low – sub 3% p.a. Whereas international equity markets have provided a total return of just under 10% p.a. over this period of time. This demonstrates the perils of putting all your money in one asset class.
Sometime in the future, this will probably reverse. Equity markets will perform poorly, and bonds will perform

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Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

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My new book, Wealth by Design, is out now:

Buy online or in bookstores. The ebook is available now, audiobook coming soon.

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.