We have all read the horror stories in the newspapers or seen them on television: Mum and Dad put their trust in a financial advisor. The advisor ‘sells’ them an investment that paid him a substantial commission. The investment was poor quality. Mum and Dad subsequently lose their life savings and the advisor goes unpunished. A new story like this comes up every few months. It’s frightening and very upsetting!I propose you can only do one thing to eliminate 99.9 per cent of all these stories occurring: remove all and any conflicts of inter­est. Once all conflicts of interest have been removed, working out if you should and can trust a particular advisor becomes a lot eas­ier. In that situation, it simply comes down to whether the advisor has enough experience, knows what they are talking about and has a track record of producing good results.Let me put it this way, would you be comfortable if your doctor (GP) was employed by a pharmaceutical company? Absolutely not! And that is why laws in Australia prevent pharmaceutical compa­nies from owning and operating medical practices. I believe that we should have similar laws in the financial services industry (but I suspect the banks’ political lobbying power will prevent this from happening). How do you choose which GP you visit? You make an assessment of whether the doctor knows what they are talking about, the results they produce and whether you feel comfortable dealing with them.Therefore, before concluding that all financial advisors are crooks, I invite you to recognise that two types of financial advisors exist: independent advisors and conflicted advisors. When you read the next horror story in the newspaper ask yourself whether the advi­sor was independent or conflicted. I’ve no doubt you’ll find they are always conflicted. The golden rule here is that you should always avoid conflicted advisors. To be truly independent I believe the advisor needs to satisfy five conditions1. Take no investment commissions, referral fees or kickbacks2. Offer fixed fees3. Have no investments to sell you4. Be privately owned with an AFSL and with no links to banks or investment providers5. Demonstrate deep knowledge of all asset classes (especially property and shares)https://www.prosolution.com.au/what-is-an-independent-advisor-five-important-tests/

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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.

Evinced-based investing (EBI) is an approach that you can use to invest in either property or shares (and other asset classes). This process makes investing feel a whole lot more secure because its more transparent, you aren't making guesses and you have a lot more confidence that your investments are going to work!
Evidenced-based investing refers to the process of adopting a set of rules to guide the implementation of the investment strategies and tactics. The efficacy of these investment rules is typically supported by long-term empirical evidence and peer-reviewed academic studies. That is, there’s an overwhelming body of evidence that proves these rules work and, perhaps most importantly, why these rules work. It is important to understand what has driven the returns – not just take the returns on face-value. You only invest when an overwhelming body of evidence exists that demonstrates you will be successful.

For more information including examples of evidenced-based investment strategies, go to: https://www.prosolution.com.au/evidence-based-investing-reduces-risk-and-maximises-returns/

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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.

Download them here

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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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.

It stands to reason that not everyone needs a financial plan or relationship with a financial planner. There might be various reasons for this. However, perhaps the best way to answer this question, i.e. “who doesn’t need a financial plan” is to discuss what’s involved in a plan and then you can draw your own conclusions.

In this podcast I discuss:
•    what’s involved in the financial planning process i.e. what outcomes will you enjoy
•    how to set the two most important goals
•    how to map out an action plan
•    what a financial planner will do ongoing (each year).
This will give you enough information to decide whether its for you or not.

For more, check out my video here.

Our most popular free guides:

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.

Download them here

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

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

Got a question for the podcast?

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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.

If you sell a dud investment property, you may have to pay capital gain tax (CGT), selling costs and then stamp duty again when you reinvest… it can be a very expensive exercise! And if you have owned the property for a while, it is probably putting money in your pocket each month (i.e. more than covering its expenses – not costing you anything) and the CGT could be significant – even more reason to not sell it, right?
This is what I would like to investigate in more detail. In particular, how bad does the property’s performance need to be to warrant selling?
A dud investment is any property that hasn't and won't appreciate in value by 7-10% p.a.
There are three costs you need to consider before selling being:
1. Selling costs - agent fees, marketing and maintenance
2. GST - the rule of thumb is to multiple your net gain by 23.5%
3. Re-purchasing costs (stamp duty and buyers' agent fees).
The chart below looks at how much the new property needs to beat the old property by (growth rate) for it to be worthwhile.

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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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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.

Mistake # 1: The absence of a methodology – most investors make ad hoc investment decisions. How can you expect to win the game if you have no game-plan?
Mistake # 2: Belief that they can make quick profits – too many people thing too short term.
Mistake # 3: No patience – invest in quality assets with a quality (proven) methodology and then have the discipline to ride through the volatility.
Mistake # 4: Almost no diversification – diversification is by far the biggest single necessary ingredient to winning the game of share investing.
What is the simple solution to these four mistakes?
The antidote to these four mistakes is very simple and available to all smart investors. Essentially you need to do three things:

1. You need to adopt a proven, low risk methodology. I am a strong believer in the passive investment methodology. Its low-cost and very diversified and proven to generate higher returns.
2. You need to invest in a manner that you would be comfortable doing so for the next 10 years. You need to avoid the temptation of trying to predict market returns – “market forecasters will fill your ear but will never fill your wallet” – yes, another Buffett quote; and
3. You need to diversify markets and assets classes. This means that you should invest outside of Australia – particularly in the US market as it makes up over half of the world index and provides tech exposure as discussed above. You should also consider defensive assets such as bonds too.

Visit this blog for more information.

Our most popular free guides:

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.

Download them here

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

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

Got a question for the podcast?

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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.

How you structure your loans can have a large impact on the tax you pay, your risk, your ability to build wealth, your cash flow and your general financial strength. Efficient loan structuring is a commonly overlooked and rarely understood topic but that’s not to say it’s overly complex. Like anything, you don’t know what you don’t know until you know it. Many people tend to carry a reasonable amount of (investment) debt throughout their working life so it’s especially important for you to ensure your mortgages are your servant, not your master. You can save a lot of tax by optimising your loan structure.Part 1Loan structure # 1: Always borrow the maximum and use an offsetLoan structure # 2: Always interest onlyLoan structure # 3: Minimise securityPart 2Loan structure # 4: Diversify lendersLoan structure # 5: Avoid cross-securitisationLoan structure # 6: Never mix business with pleasureLoan structure # 7:  Stagger fixed rate expiryFor further details, read this blog

Our most popular free guides:

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.

Download them here

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

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

Got a question for the podcast?

Email us at [email protected]

Interested in working with our team?

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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.

How you structure your loans can have a large impact on the tax you pay, your risk, your ability to build wealth, your cash flow and your general financial strength. Efficient loan structuring is a commonly overlooked and rarely understood topic but that’s not to say it’s overly complex. Like anything, you don’t know what you don’t know until you know it. Many people tend to carry a reasonable amount of (investment) debt throughout their working life so it’s especially important for you to ensure your mortgages are your servant, not your master. You can save a lot of tax by optimising your loan structure.
Part 1Loan structure # 1: Always borrow the maximum and use an offsetLoan structure # 2: Always interest onlyLoan structure # 3: Minimise securityPart 2
Loan structure # 4: Diversify lendersLoan structure # 5: Avoid cross-securitisationLoan structure # 6: Never mix business with pleasureLoan structure # 7:  Stagger fixed rate expiryFor further details, read this blog

Our most popular free guides:

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.

Download them here

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

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

Got a question for the podcast?

Email us at [email protected]

Interested in working with our team?

Discover how we can work together

Subscribe to my weekly blog:

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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.

In my experience, novice investors can talk themselves into believing that an investment exhibits less risk than what it actually does. They think they are investing but in reality, they are closer to speculating than investing. The solution is to understand what evidenced-based investing is and how to use it effectively.
This podcast discusses the difference between investing, speculation and business - sometimes they overlap as shown below.
For more information, go to the blog page here.
https://www.prosolution.com.au/beware-wolf-dressed-sheeps-clothing/

Our most popular free guides:

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.

Download them here

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

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

Got a question for the podcast?

Email us at [email protected]

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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.

Parents always want their children to have the best education. For some people, that means sending their kids to a private school. Of course, private schooling can be expensive and can have a big impact on your cash flow. But I’d like to suggest that the ‘cost’ is a lot more than the initial cash flow impact which parents should take into account - it can be more than 5 times the actual cash flow cost . And maybe there's a better alternative to consider that ticks both the 'education' and 'wealth' boxes.
For more information about this topic, go to https://www.prosolution.com.au/opportunity-cost-private-education-alternative-consider
To subscribe to my blogs, go to: https://www.prosolution.com.au/subscribe-blog/ 

Our most popular free guides:

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.

Download them here

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

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

Got a question for the podcast?

Email us at [email protected]

Interested in working with our team?

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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.

In Melbourne, investment-grade apartments have not appreciated in value very much in the past three to five years when compared to houses – as illustrated in this chart
https://www.prosolution.com.au/time-to-buy-apartments/
I would like to explore why this might have been the case and share my opinion of whether this performance differential will persist.

Our most popular free guides:

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.

Download them here

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

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

Got a question for the podcast?

Email us at [email protected]

Interested in working with our team?

Discover how we can work together

Subscribe to my weekly blog:

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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.