The Clever Investor Property Podcast

Christmas is a time of joy and celebration, but for many it can also be a financial challenge if you're not well-prepared. To ensure your holiday season is filled with merriment rather than money worries, here are five financial tips to help you better prepare for an Aussie Christmas.

1. Create a Christmas Budget:

One of the most effective ways to prepare for Christmas is by determining a comprehensive budget. Start by a list of all your expected expenses, including gifts, decorations, food, and travel. Be realistic and avoid overspending. Setting a budget not only helps you keep track of your expenses but also allows you to allocate those precious funds wisely, preventing unnecessary debt accumulation in the months after.

1. Save in Advance:

If you haven't already, start setting aside money well before the 25th of December to cover your expenses. Try opening a dedicated savings account and contribute regularly. A great idea is to set up an automatic transfer on payday so you consistently add to your Christmas fund. This saving in advance will avoid you resorting to credit cards.

1. Make a Gift List:

Gift-giving is an big part of Christmas for so many of us, but it can be expensive. Create a list gift-receivers before you head off shopping and determine a spending limit for each person. This is going to get you to be creative and that’s not at all a good thing. Thoughtful, heartfelt gifts often mean more than expensive ones. If you’re artsy or a baker, consider homemade gifts which can be more budget-friendly and memorable.

1. Shop Smart and Early:

Avoid the last-minute rush and the temptation to overspend by starting your Christmas shopping early. Keep an eye out for sales and discounts throughout the year and take advantage of sales events. Shopping in advance allows you to spread your expenses over several months, reducing the financial burden as the holiday season approaches.

1. Set Realistic Expectations:

It's essential to manage expectations during the Christmas season. Communicate with your loved ones about your budget and encourage them to do the same. Be open about your financial boundaries and explore alternatives like a Secret Santa gift exchange, where each person buys one gift, reducing the overall cost of gift-giving.

As the holiday season approaches, keep these financial tips in mind to help you better prepare for Christmas. By planning ahead, setting a budget, saving in advance, and shopping wisely, you can enjoy the festivities without the stress of overspending.

Dictionary definition: lottery ~ noun

• a means of raising money by selling numbered tickets and giving prizes to the holders of numbers drawn at random.

Winning the jackpot in lotto might seem like a stroke of luck, but have you considered the post-lottery experience?

You allegedly have a 1 in 77 million chance of winning over $1million on Australian Powerball. Remembering the basics of what it is, its gambling designed to raise money for the organiser and as long as there have been lottery winners there are lottery losers.

For years and years, former big-time winners have been sharing insights on how they not only lost all the money, but they also ended up losing companions, friends and attracting unwanted attention along the way.

A dream comes true??

Lottery millionaires often lose their newfound wealth quickly due to a lack of financial education. While winning the lottery seems like a dream come true, the sudden influx of money can be overwhelming and lead to impulsive decisions. Without a proper understanding of managing their finances, these individuals often fall into common traps that erode their wealth rapidly.

Many big-time lottery winners go on wild spending sprees making extravagant purchases without considering the long-term consequences. They buy expensive cars, luxury homes and indulge in lavish holidays. It seems innocent at the start but this reckless spending can drain their funds rapidly, leaving them with little to invest or save for the future. They often overlook the importance of budgeting and financial planning, which are essential for building and preserving wealth.

Lottery millionaires losing their fortunes quickly is a common occurrence due to their lack of financial education. The absence of financial knowhow leads to impulsive spending, susceptibility to scams, poor investments and an inability to plan for the future. Building and maintaining wealth requires an understanding of financial management and without it, the dream of long-term financial freedom can quickly turn into a nightmare of debt and regret.

But who are we kidding, winning lotto would be great, spend wisely, have a plan and as I always say, Knowledge is Power.

Superannuation was introduced to Australia in 1992 through the Superannuation Guarantee (SG) system. This landmark reform mandated that employers contribute a percentage of their employees' earnings to a dedicated retirement savings fund.

Superannuation has since become a critical pillar of Australia's retirement income system, ensuring financial security for retirees.

Australia’s superannuation scheme is relatively unique. While many countries have mandatory pension systems, they may differ in structure and implementation.

Some countries with similar systems include New Zealand and Singapore, but the specifics can vary significantly. It's essential to examine each nation's pension regulations individually.

What should I understand regarding my own Superannuation?

Most Australians are in superannuation funds selected by their employer.  Over 60% of Australians make no choice on how their super is invested and sadly 37% of Australians have little to no understanding of how superannuation works.

So, as you can imagine, each of these individual funds has annual running costs, this seem painless because it gets paid out of your fund. But having multiple funds running at the same time means long term you could be clocking big fee's associated with having these accounts. Collectively its costing Australians $2.6 billion in additional fees each year. Most Australian’s super is heavily invested in the share market.

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Over ten years ago, when SMSF property lending started, the highest loan you could get was $500,000.

Back then, house prices were lower, and this type of lending was new. But now, SMSFs are the second biggest superannuation asset class in Australia.

Now, they're making it easier for SMSFs to get more money by increasing the loan-to-value ratio (LVR) to 90%. Most SMSF property loans require you to pay back the interest and principal (P & I) over 20 years or more. 

education event on the 1st of November.  Follow the links to book in.

Just like a football team adjusts its game plan throughout the season to achieve victory, it's essential to understand the importance of changing your personal financial goals over time.

Just as no two games are the same, the financial journey you embark on is influenced by many variables. In this article, we'll explore how your financial goals can be likened to a football team's game plan and why flexibility is the key to success.

Structuring and adjusting loans are crucial to any transaction, no matter who you are. Nathan Newham and Russell Quinlan are two such experts from Mortgage Choice in Hornsby and Sydney’s Northern Beaches.

We chat about the dangers of not having a game plan, how the young adult kids of home owners have the power to help them get on the pathway to making some great changes. Especially if you encounter setbacks or changes in your life, it's essential to set new goals and adjust your financial plan accordingly

These realities can affect your ability to meet your initial financial goals. By remaining flexible, setting new goals when necessary, and seeking guidance, you can tackle financial challenges head-on and ultimately reach your end game of financial security and success.

Buy now or wait and save?

Lenders Mortgage Insurance (LMI) has been a big help in letting people who want to own a property get started with less money for a down payment.

It all began in 1965 when the government made a plan to give insurance for home loans that covered up to 95% of the home's cost. The idea was to make it easier for people, especially those buying their first home, to become homeowners.

Strachan Taylor knows everything you need to know about LMI and is in charge of partnerships at Helia, (formerly Genworth), Australia’s first Lenders Mortgage Insurance provider, a company that is dedicated to leading the way for years to come.

We asked Strachan to pop into The Clever Investor Podcast studio and tell us about the benefits of lenders mortgage insurance and how it can make a big difference for people who want to invest in property or buy their first home.

The Helia estimator provides some good insights into the deposit options that could suit your circumstances, click this link to have a play around. Deposit comparison estimator

Prepare to decode the enigma of superannuation with our latest podcast show, as we go Unravelling the the Mystery and find out the answer to the question, Is it Designed to Baffle?"

You can contact Tyron and his team:

Orange Financial Planning

Gen Z, refers to the generation of people born between 1997 to 2012. This means, the oldest Gen Zs would be 26 years old, and the youngest would be 11 years old. 

Dr Tony Hayek is back with us this week. As this podcast was being recorded the rest of the office was putting the finishing touches to an education event aimed at showing Gen-Z (and their family) all about how they can get into property.

• Help you create a plan to start your investment portfolio.

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Before 1966, Australia used a currency system that might seem to be puzzling for us today. Instead of the dollars and cents we're familiar with now, they used pounds, shillings, and pence. This system had its roots in British traditions, but as times changed, it became clear that a switch to decimal currency was necessary for various practical reasons.

Imagine going to the store and trying to calculate the prices of things using pounds, shillings, and pence. It was like trying to solve a math puzzle every time you wanted to buy something! This made shopping and handling money confusing for everyone and I mean everyone, from everyday people on the streets to businesses and banks. This complex currency system had 12 pence in a shilling and 20 shillings in a pound, leading to lots of tricky calculations.

The world was evolving, and trade and finance were becoming more international.

On February 14, 1966, the new decimal currency was officially introduced in Australia. The switch wasn't always smooth – some people were used to the old ways and were hesitant about change…. (no pun intended). But over time, the benefits of the new system became clear.

It showed that sometimes, embracing change can lead to better outcomes for everyone.

You would have heard the word depreciation, but what does it mean?

It's a slow change in value that happens to things over time.

Depreciation affects both cars and property, but in different ways, especially in Australia.

When you buy a brand-new car and drive it out of the showroom, it's no longer considered "new". Cars lose value as they get older and are driven more.

This decline in value is called car depreciation. In Australia, cars can lose value quite quickly, often around 20% in the first year and then around 15% each year after that. So, a car that's worth $50,000 when you buy it might only be worth $40,000 or even less after just one year.

Now, think about property, regardless of if it’s a house or an apartment.

Unlike cars, residential property generally tends to appreciate in value over time. This means its value increases as the years go by.

Property values can be influenced by factors like location, housing demand, local demographics and sometimes improvements made to the property. However, it's important to remember that property values don't always go up, there are situations that can cause them to stagnant for long periods or they can fluctuate, swinging up and down, depending on local market conditions.

In Australia, property is often seen as a long-term investment. People buy property with the hope that its value will increase over time, allowing them to be sold for a higher price in the future. This is why many Australians invest in property to help secure their financial future.

So, weather you're thinking about buying a car or investing in property, knowing how depreciation works can help you make informed decisions for your financial goals. Your own team of experts will help guide you along.