Jan. 10, 2023

#84: Simple, not easy: Personal finance for veterinarians, with Noel Whittaker

#84: Simple, not easy: Personal finance for veterinarians, with Noel Whittaker
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Season 1

We talk about well-being a lot on this podcast, but one thing we don’t really discuss all that often is financial well-being. And while it’s a truism that money can’t buy you happiness, I'm also of the opinion that if the number of shifts you do is purely determined by your level of debt rather than your level of enthusiasm that there is likely to be an increase in sadness! Which is why we invited one of the world’s foremost authorities on personal finance, Noel Whittaker, to set us off on the right path. 

This episode is a recording of a Q&A session that we did with Australian finance icon, Noel Whittaker, and several of the team from Animal Emergency Australia to help us with our burning money questions.  Noel is a bestselling author, finance and investment expert, radio broadcaster, newspaper columnist and public speaker. He reaches over three million readers each week through his columns in major Australian newspapers and magazines, and also broadcasts on over 50 radio stations. He has over 20 bestselling books, including a brand new one called 10 Simple Steps To Financial Freedom.  His first book, Making Money Made Simple, set sales records across the country and was named in The 100 Most Influential Books of the Twentieth Century. For 30 years, Noel was the Director of Whittaker Macnaught, one of Australia’s leading financial advisory companies, with more than two billion dollars under management. In 1988 Noel was named Australian Investment Planner of the Year and, in 2003, he was awarded the Australian Centenary Medal in recognition of his services to the financial services industry. In 2011 he was made a Member of the Order of Australia for service to the community in raising awareness of personal finance. He is currently an Adjunct Professor and Executive-in-Residence with the Queensland University of Technology, as well as a committee member advising the Australian Securities and Investment Commission.

We're joined by the team from AEA to answer questions about financial topics relevant to most of us, including whether it's best to buy or rent, smash the mortgage or start investing, whether it makes sense for younger people to pay extra into their retirement fund, how to think about student debt, insurance planning, balancing debt with investment, planning advice for rising interest rates and much more.  (Quick translation for our non-Australian listeners: Super  = Retirement fund. HECS debt = Student loan) 

If you'd like your financial and professional journey to be as part of a veterinary team that does more than just talk about team well-being, listen to our job add at the end of episode 83 to find out about working with me in one of the best locations in Australia and AES Tanawha, or contact me at vetvaultpodcast@gmail.com to ask all your questions. 

Go to thevetvault.com for show notes and to check out our guests’ favourite books, podcasts and everything else we talk about in the show.

If you want to lift your clinical game, go to vvn.supercast.com for a free 2-week trial of our short and sharp highly practical clinical podcasts.

We love to hear from you. If you have a question for us or you’d like to give us some feedback please get in touch via email at thevetvaultpodcast@gmail.com, or just catch up with us on Instagram.

 

 

 

We talked about well being a lot on this podcast, right?But one thing we don't really discuss all that often is financial well-being and while it's a truism than money, can't buy you happiness, we do also know that a lack of money can definitely get you quite a bit of sadness.
I once saw this quote, that I really like that said, money can't buy you happiness but it's much nicer to cry in a Mercedes than on a bicycle in the only other money episode that we've had to date back in episode 58 with dr.Sandberg, we talked about learning.More money, how we value ourselves and getting over that stigma that we tend to have as vets.
That money is a dirty word.But in this episode, we look at what to do with your money.Once you've earned it so personal financial management stuff or to put it more bluntly, how not to piss away your money and be smart with it.So you don't still have to be working 50-hour weeks when you're in your 50s just to break even on your expenses and we have an A amazingest to Enlighten us.
If you're an Australian over say 30 Of age then I don't have to introduce no Whitaker for everyone else.No Whitaker is one of the world's foremost authorities on Personal Finance, he's an international best-selling, author, finance and investment expert, radio broadcaster, newspaper columnist and public speaker.
Null reaches over 3 million readers each week with these columns in major Australian newspapers and magazines and also broadcasts on over 50 radio stations, he has over 20 best-selling books, including a Brand-new one called 10, simple steps to Financial Freedom.
His first book making money made simple set sales, records across the country and was named in the 100 most influential books of the 20th century.I read a statistic somewhere that at one point more than something like sixty percent of Australian homes, had a copy of that book on the shelf for 30 years.
No was the director of Whitaker mcnaught.One of Australia's leading Financial advisory companies with more than 1 million dollars.Sorry that two billion dollars under management in 1988.
No was named Australian investment planner of the year.And in 2003, he was awarded the Australian Centenary medal, in recognition of his services to the financial services industry in 2011.He was made a member of the order of Australia for service to the community in raising awareness of personal finance.
He's currently an adjunct professor and executive in Residence with a Queensland University of Technology as Well, as a Committee Member advising the Australian Securities and Investments commission.So basically what I'm trying to say is sit up and pay attention.
I do just have to tell you a quick story here about how this episode actually happened.I mean, how does a little niche podcast for vets?Get no freaking Whitaker on the show.If you listen to our previous episode, you'll know that I do my clinical work.At one of the a is hospitals up here on the Sunshine Coast but in addition to my clinical work, I also do a private podcast.
Is team members where we interviewed team members and have conversations about the stuff that impacts us and matters to us.It's pretty cool.Then, rub Webster who you'll know as our ECC Guru over on the clinical podcast and who is the CEO of a had?This idea of doing a series on Personal Finance, recognizing that if we're trying to improve the team's well-being, that one factor that will play a big factor in their overall, let's call it.
Happiness is how financially fit their, which makes sense, because let me tell you, That if the number of after our shift, someone does is determined primarily by the level of debt rather than the level of enthusiasm not an ideal scenario.So we decide we want to get a financial advisor on the podcast and have a Q&A session where anyone from the team can ask all of their burning money questions.
And for ages I'm contacting advisors and asking do you want to come on our podcast?And I'm racking my brain and not getting anywhere.And then one day I have a conversation with this guy called James Whittaker.Shoutout to James and his excellent broadcast.When the day who was leading a podcasting Mastermind that I was a part of and I suddenly remember that he said, one day that his dad was some sort of Finance guy.
Now remember that I'm not a strated so I'm a bit oblivious so I go.Hey James, do you reckon your dad would want to join us on this session that I'm planning for my work and he said, sure I'll send him a text next thing you know where they could takes me.And he said, sure, I'll just come to your house one day and I'm like, yeah, you should stay A for lunch, it'll be fine.
And then I start preparing and I googled no Whitaker and I'm like, oh, okay, hey, there we go.This conversation was so cool and feedback from the cvaa was that the content could literally be life changing, which sounds like an overstatement but it's not.
So I asked Rob and the guys who join us to ask their questions, shout out to doctors.Hannah Davies, the Hana hou Brooks a look for by Arthur and dr.Raab himself if I'd be happy if we shared this to The Wider width world.And here we are, so listen, enjoy and then please act on it and then one day when you're rich, you can buy me a beer and you can say that episode with no Whitaker change my life to quick shout outs.
Before we jump in on the previous episode, we had an ad for a vet job at a s up here at the 1000 Clinic where I work if you missed it and you are curious about a career in emergency or you want to check whether your reasons for thinking that emergency is not for you.You a valid jump back to the last 5 or 10 minutes of our episode with Kate and cam.
So that's episode number 83 for all of the details.And then, if you do decide to stop a maturing your financial life and start acting on the advice in this episode head to Knowles website, know where to get.com for a range of spectacular resources, including his new book on Personal Finance.
I've been playing with retirement calculator, and the compound interest calculator to see if I can use the one to affect the other.He also has a great newsletter to slowly bring your Your level of financial literacy up towards your level of knowledge on how to fix sick animals.Okay, let's jump in with nowhere to go.
Now it is just an absolute privilege to get to meet you.I was away when you texted and said, who was going to be here and I've just got to share, I guess you get this all the time, but I was a fairly no hoping vet student.
And I actually stole this book off my future father-in-law's bookshelf, all right?And it was one of the first books I ever read on.On some of the concepts of money, business and personal development.
So, I'm sure it's probably not one of the ones you for everyone who can't see the title.It's called getting it together and it's a book by null for young teenagers and it was probably the best thing.My father-in-law could have left on his shelf for me to steal for the good of his daughter because it really was a huge changing book.
And yeah, just an awesome privilege to be here Knoll and I'm hoping we've got a group of about 400 young people in the emergency Ruth and right.If you could help, you know everyone here has got awesome questions.
But if you could help you know, 1 to 10 or 20 young vets, nurses or client care representatives, make that decision that you helped me make from to become an investor, that would be Beyond valuable for the people in this group and I might add that the guys here.
With us today.There they, I think they've all made that shift already and there's some pretty bright Sparks here to grill, you today.So awesome.I hope you're ready for some questions that book has changed, its name to beginner's guide to wealth because the title was ambiguous.
And then James, my son, co-wrote, The Secret of that, look, it's the same book with a bit more in it and he started out of the bit more for young people and stuff.But basically it's about life's Principles and one of them is you the only way to succeed is to fail and most people don't get that.
You know, if you're, if you don't fail, you're never stretch yourself.Set all truthful, finances as well.No, you don't do not really feel like failing financially, too hard.You don't want to walk into a lion's cage without armor, on do you?
I mean, there's this degrees of that, right?I'm going to kick off because it's my house so I get to ask the first question.Okay, and then we'll take it from there.Well, they'll see you wrote making money made easy.The first edition where first mistake, it's not making money May easy.
It's simple.Simple and easy are very, very different, okay?They made simple.And it's very simple.What's the difference between easy and simple?First of all?Well, for example, it's simple to say, You must walk for one mile a day but that may not be easy.
If you're lazy, that's what I try to make investment happen automatically.Automatically.I think that's an important point.It's simple, but it's not easy.You still have to still have to do it.Look, I'm writing a book.Now for young people called 10, simple steps to Financial Freedom.
The first chapter is spend less than you earn 80% of people can't do it.There's nothing hard about becoming wealthy, really isn't?Which have got to do what you got to do?
It's all if you got a dog, you got to walk it every day.You got a dog, you got to feed it, you got to feed it the right things, but that's not, it's simple.Not hard to learn.It's a paradigm shift because a lot of people weren't easy, right?
We went there, we won the quickfix, we want the easy.We want the make money quickly, get rich quickly and easily.We all want the 14-day lose 10, K diet.You know, the MBA in 10 minutes, the big muscles, you know, doesn't work like that.
That's, that's the Paradox.Everything worthwhile takes time and and money growing by its nature is a slow process.And like all success principles, it's slow to start and most people give up.
I've been going for a year, nothing's happened after a year.Well, sorry about that.It's like a uni course.You know, you don't learn to be a vet in six months.So, all progress.That's important takes time.It's also slow to start, but it gets better and better as time goes on.
That's the essence of it.Almost stopped there.That's That's, that's the first message my question.No was gonna be so that book you wrote in a no-win 8787.Yeah.And then you had a revised version later as anything drastically changed.
If you had to rewrite that book.Now is anything drastically changed, or what has changed in your life?I've Rewritten the book.Yeah, in detail.And the reason was I found out that information by itself is useless.You need an action plan.
So the new book is the same stuff, but it resolves around the action plan.But also, what's the bit scary?There is a major economic difference that was before the woke times in that book.
In 87, I said, if a couple if the average couple on the average income bought the average house and used her wage just for the mortgage in five years, then debt-free now rates per 15 percent, then Now the same book says the average couple on the average wage by the average house.
In 10 years, the debt can be controlled on one income with interest rates at four percent.That shows how much relatively dearer House of God.In 1974, the average Brisbane house was about 30 grand.
That was two years wages.Now it's, maybe eight or nine years wages.Yeah, that's massive.It is, it is, it is.All right, guys, over to you guys questions.Who's going to be first?Come on.Someone's got to start me as the optional uses him on the matter.
So I guess my one of my first question was you imagine About the economic Times reasoning.How would you recommend people taking advantage of the recession's about to come?Well, I started my business in 1974 building spec houses and I was to steer, but the know there was a recession on you know, I think you've got to control what you can but what but worry about what you can't pets will get sick, pets will get treatment and you guys should be in a recession-proof business as far as I can see.
In fact, I think as we all know in in Covent the price of pets double because people had pets instead.So I think you guys are in a in a recession-proof business.See what you can, you start?Our, there's a recession coming.
What I do, things will get bad, you just keep on doing it.You just keep on doing it.Look.We're you asking more in terms of personal finance there in terms of personal investment or what you, what you do with the money because looks not the business owner, so that's all right.Is it the legend?
Yeah, so I'm just yeah, I just work.I just everything.I am going straight to Rob for the company.
What are some of the tricks or that you would recommend?I guess, you know, preparing for worst-case scenario.Hopefully don't have to put that.We won't be in that worst-case scenario.But what would you use some of the recommendations that you get by going to keep the families and everything that's for expected hard times, I guess.Okay, first question, is there any way you can improve your skills?
If you can improve your skills and I don't know the answer, but if you can improve your skills are you can improve your income.And second, we couldn't you improve your services.The money's in the extra products you can sell as we all know.
Is there an an extra product you can ethically cell?That's the way you do it, because if you could increase your sales without increasing your costs, the effect on your bottom line is massive.So a improve your skills if you can.Because that improves your income.
But s we can your business offer other services.Like, I know, but when we had a dog, you had dog dog now, but every month, the vet would send a text to steer for some need or something.Now, it was only the text from the vet that got me going back there all the poor dog.
That needs the needle.So I think that's your focus.Yeah, that makes sense.Yeah.Absolutely.We're in the specifically this group in a slightly different situation because it is an emergency.Yeah, we don't send reminders.
Hey, okay.It is a you coming when you need us.Yes, you do.And you mentioned the word, ethically.That that is an issue.You don't want to oversell service.As we've got to do what we need to do to get the best outcomes.But also if my dog got hit by a car, is it hard to reach you people?
Because my own mind is our G.Where's the vet?Are they going to be there?How am I going to wait?So I think again you've got to make it easy to do business with you.And I think that's one of the major principles and most people don't do that.
Now, if you phone anybody now you know what will happen, but the time you press button 1 + button to and pressing 3 then there's recording saying unusually high volume of calls.Of course, it's hopeless.But, you know, people people are starved for human touch It was there anything that you would recommend at the Heart, Like An, in the home finances and I think just to like, you know, better prepare themselves.
Well, if you want a mortgage try and bring you home, they out of a 15-year term.That will save you all this interest.And that's about eight dollars a thousand a month.So if you've got a four hundred thousand dollar loan about 3200 will bring you alone down, it'll give you a safety buffer.
If rates increase and your pay, It back if they don't and the word is this morning.That rates will do this.I was talking to a guy who knows people in The Reserve Bank and he was telling me that they want to go bang, bang, bang, quickly, but quickly, instead of going little bit little bit, little bit, little bit bang, bang, bang and stop and start going down again.
Because what they want to do was scare people, they don't want to send people broke, they want to scare them, get them to do.What?What's the, what's the motivation?He part about it, I mean they talk about inflation but inflation's out of our control.
I mean I'll still need petrol, I'll still need groceries, it's a worldwide problem.So today I want to scare us to spend less or unless I guess which can be very difficult.Yeah.So I guess with that information being so high.
All right, at the moment I last night that I think the CPI was like 5.1% for Australia.It was like, I think 9.1% came out in America.That's love, that's right.Yes, yeah, yeah.So how will this such high interest rate inflation rates?Where would you recommend people keeping their money because in the bank's, it's losing money.
Would you recommend like inflation hedge against like Commodities like gold or anything of that nature, right?No, no, no, no.They've only got cash property and she has, yeah, that's your three places if you've got a loan, an offset accounts a great place.
If you've got a housing An offset account will pay you what the loans charging.So guaranteed 4.2 tax for free in the offset account.Post, you've got the ability to withdraw it if you need it in your superannuation.How old are you?
I'm 30.Okay.Well, you can put money into soup.Was it tax deduction?And in thing is, you can't touch it to you until you're 60.So yeah, I've got one more big question on.Here we go.I love the big ones that, well, this is on luc's behalf because Luke is an investor.
I, we talk Investments a lot and he invests currently in shares.What?In crypto, surely in crypto, Not in crowds Theory.Yeah, Luke's been looking at buying a house in Brisbane for how long look for a couple of years now.
And so Luke hasn't bought that house and the lady behind him, Deanna ho did buy a house in Brisbane and as they're both pretty switched on investors.And Deanna's house has appreciated quite significantly in value.The question, Luke hasn't asked yet, is, should he go and buy a house in At this point of the market null.
And he's a 30 year old with significant income and some Investments and some cash, right?I know you can't give you specific advice but some thoughts would be much appreciated.Okay let's get one thing.
Very clear there is no such thing as the housing market.Its absolute bullshit.Do you mean cans or quilt be or Perth or Point Piper houses?Units or what?So you first of all, need to work out the market that you want to be in this that Cooper oo.
Oo Revit and park or Windsor or an r-la, you know?So I think the first thing you need to do is work out how much you can borrow.And the key to success in real estate Is You by well and you add value, that's why apartments are normally a terrible investment because you can't add W 2 1.
You read vary by location or by getting a house that you can do it cheaply.So I think he needs to work at how much how much you can afford to spend?Then can he get what he wants in that price range?Because location is the ultimate in property location.
The value-add it makes sense.Yeah.The question still that I've often wondered about?And especially the younger guys.Like so I'm a homeowner of that ship has sailed for me, but Do you go?Well, let me back my money in a home or do I see more growth in the same market?
So we'll keep renting, but invest my spare money and shares.It is.There is it?If it's not as I'm sure that equation will shift depending on the market.If it's not a simple answer, is that a way to determine what's the most sensible strategy?It's pretty well clear.
That the optimum is to rent and invest in an index fund, but most people won't do it.Like I bought a post down the coast and apartment for 500,000 in 1990.I sold it recently for a million You know, index fund that would have been 11 million dollars, but see, I wouldn't have put half a million dollars in shares in 1990.
See people don't do that.So I think for the average person you're better off to buy a house in, you've got something and then borrow against the house for an index fund.Index funds, average nine percent per annum for 120 years, it can't go broke.
It's paying 4.5% Freight And the cost is bug a rule.That's that's the easy way out.No.Could you explain for some of the team who might not know what an index fund is?What it is?And what why it's so cheap to invest in?
Okay, there's a there's a thing called the stock market, right?That's about 3,000 companies are which most don't trade.So you what about two or three hundred companies?Which make up the real Stock Exchange.
That's your westpac's, your Commonwealth Bank Harvey Norman JB Hi-Fi Rio Telstra.You noted over there, when you buy the index, you're buying every horse in that race.Your basket contains every share in the top two or three hundred.
Can't go broke.It's just a statistic that can't go break it.Do this and this and this and that's all it is.And there's no decisions to make instead of trying to pick this and try to pick that, you know, we've all had winners and losers once you try and pick, it's like horses, all the good ones and the bad ones.
But for the average person, the index is so simple.Yeah, because emotionally there's that you look at that at that growth rate and you go.Oh, that's so slow.But if I can pick a winner I can double it, double my money.Hey, I bought Magellan shares at a dollar.
I bought 50 Grand at a dollar, they went to 70 bucks.Well, I started a couple million dollars at 70.I've still got 18,000 left.They've gone from 3212 in the last year.I've still got 360 Grands worth for my 56,000 investment as so.
Am I happy or unhappy?I'm saying.So but that was a lucky shot.Like to know how to do it again.Yeah, that's the trouble.So then, how would you recommend the essay, you know, the beginners the first time is that have never really touched investment before to go about investing in the S&P, 500 or your index funds?
What will the index fund?The the codes.STW Sierra Tango.W-whatever W is it's an ASX, funny, just but you just bite, like, a BHP share.It's all there is to it.Yeah, which means you can buy a thousand.Dollars worth I bought in the past but in Morningside for my old art is because she was sort of getting old and I promised a tenancy until she died.
That was 20 years ago and she's now 93 and still going strong, that's gone from 216 to 400 in that time.Having got the 500s coming down again because Apartments get old that same money in the index would be 1.3 million bucks.
You see what I mean?That's my view but the next thing is, when she dies I'm going to sell, it will be up to Hundred grand in capital gains tax because I can't sell the front stairs.If there was a 1.2 million dollar share portfolio, I could sell 20 grand or 30 grand, or leave it be.
And that's the flexibility of shares.The thing about shares is no land tax, there's no rates, there's no maintenance, there's no vacancies Jenna, it's just easy.Do you understand?Frank dividends definitely not everyone.
In our group will understand Frank dividends before we move out because D is a share market, investor.And she Counsels Luke not to buy any more cryptocurrency quite frequently that's good.You can see she says it but it doesn't earn an income.So he's wasting his time.
But could, if you could explain a little bit about Frank dividends and why they can be so powerful as well, I don't have a black wood.Every time I make a speech to retirees, I asked the question, not one of them understands Frank dividends So to keep it very simple company Tax is 30%, you get a credit for the tax, the companies paid.
So if your company makes a million dollars it pays 300,000 in company Tax.Can give you 700 thousand back as a dipped in you with me so far.Okay.So what's to keep it simple?Say it's a seven hundred dollar check you've got back with a franking credits attached worth. $300. to pay you for that tax, the company has paid That is value because you can get it back or use it so it's taxable.
So you've only got seven hundred dollars in the bank but you got a credit for 300 with it.Now if you're earning about 120 Grand a year, the tax on that will be, what about 34% won't it?So you have to add the franking credit so you only Bank 700, but your credits 300 so you pay tax on a thousand dollars.
The tax on a thousand dollars at thirty point, five is three $45.The credit is 300 You only pay $45 tax on your dividend of seven hundred dollars.Now let's say you've got a two hundred thousand dollars share.
Portfolio returning.Keep it simple 5% growth and 4% income capital gains does not trigger until you sell to.You can spend the next 30 or 40 years building up with no tax.
So you turned with thousand dollars is just giving you nine thousand dollars back 100,000 site.The hundred thousands growth is in taxable for thousands, franked, taxable lightly.So you just cracked $9000 Improvement in the portfolio and the taxes, bugger all their white.
That's why share investing is so simple for you guys.You just build build build build.Now, that makes sense to that franking.That makes sense because most people don't get this I don't hide represent, understand it how it works, but I know it works.
That's right.You get a check plus an attachment you pay tax on the combined value of what you got.Plus the credit less the credit.Well.
My question is for those beginner addresses Ivan's, investors itself like which you normally cuz I dollar cost average whenever I invest but I guess the argument for a lot of people it's like do you invest small portions but consistently and regularly or do you accumulate a certain number before going into the stock market?
That's always the debate with a lot of investors.I think the regular one is the way to go, one of the great cases.You don't miss what you don't get.We spend what we get most people.You just put the direct debit, two thousand dollars every month.
It is super, it's tax-deductible.You won't miss it in 30 years time, that's a couple million, but it happens automatically.I had a photographer come around once to home.Oh, I can't say, I said, okay, you invest one gig week.
Oh, all right, it worked for you.You've got to make sure that part of your income is taken away from you automatically.So you said that, that automatic payment into Super, so share, buying like Maddie's asking you to do the same thing by a little bit of shares, every month or every instead of saving.
And is that is that purely psychological thing?Is it because otherwise you're going to have 20K sitting in your bank account, that's your mug for shares and then you suddenly go or I could buy a new car.Is that every Tuesday and Thursday at 6:00 in the morning, my personal trainer comes to my house.
If he didn't come, I wouldn't train.You know what human beings are inherently.Lazy is always a reason not to do but you don't miss what you don't get.The only not trick but the fact is that soup is deductible.
If you're not going to Super it's coming out of after-tax dollars.That's the difference.Once you start doing it, you'll be amazed how it builds.You get your credit card statement.When the credit card statement comes, what do you think?What do you think whether critic a stipend comes?
It happens to me.Every month Cavalier has been so mad.You've spent four thousand dollars but it's like it's 220 and 230 in the groceries and there's nothing on it but it's four or five grand but investing works the same way.
I like raised.I like Rai Sid.I think raises fantastic.Is there a minimum amount that you would advise to invest?Because you know how with stock markets depending on what platform you use there is broker course and broker fees and insulin is that a certain percentage of like Investments like broker fees that you're taking to consideration before investing.
Like, for example, if the broker peace is around $10, you know, there's no point investing.Anything less would then you know, like just say 2000, I agree with that, I agree with that, but I do You know, this, but I thought there's online things that have the very cheap aren't out there, online, Things become sick or something.
We use classic, I don't know what they charge, but I don't think Luke will know, look how tall is she.Yeah.
A woman, the broker was charging a thousand dollars a month, and that's horrendous and he pay on the transaction.You mentioned raised what's race?I don't know that it's, it's the old acorns are II's ID.
It lets you cryptocurrency to if you want it, it lets you choose a portfolio, it'll take it out of your bank will all the time for you raise is just such a lovely learning.Experience.Okay, have a look.All right.Great.Yeah.Yeah.
And it is also spaceship as well.Spaceship.I don't know.Spaceship, is it similar?Yeah, it's pretty similar, but for the first five thousand dollars, there's no fees for the first five thousand dollars.Yeah, but it's the same principle.Okay?The old micro investing platform?Yeah, good morning, Brooke and Brooks joining us from Melbourne.
Hi Brooke.Hello everyone.In my family is so excited that I get to speak to you.Funny.Nothing dad, get your emails every week and they always send them to me to read that.Nice, just sign up for yourself.It's free t-shirt.
And that's instead of word.I know.She's listening and learning.So who's gonna go Brooke ahead ahead of you been waiting patiently.You should wash it for us.Yeah, my question is, I know you can't give like personal finance advice, but my question is that I'm 23 and I've been a bit, but just over a year.
So our only which started in my Like earning capacity per se and so you were talking about cash versus super.She is a property property.Yeah.Especially cashiers property like which one would you start it?
Because if I'm trying to save for a house deposit and single person and trying to decide, you know like only and so much where do I put it?Every asset class has a purpose right and shares and Purty, a long-term Investments cash is more or three to five year investment.
So saving for a house cash has to be in the bank now I know there's a thing you can access part of your super and take it out again.There's a way you can boost your savings a little bit by putting money to soup and getting it back.
It's a little bit complex though.I'm not sure if it's worth the effort, to be honest.But the main thing is the first things that goal, It all starts with you go.The first thing is, okay, I want to buy a house.How much do I want to spend and how much do I need to save up for it?
And what resources have I got available?Is there help from my parents or not you know, is there a part time job?So other words, once you set the goal that will get your mind going.Yeah.They say you want to buy it.You decided you want to buy a half ago.
Should you also invest like put a bit of money in the share market?If it as well, I think it's your age, you've got to focus on the go.Okay, once you've got your house deposit and once you bought the house, that's when you can think further.
Yeah.Okay.Thank you.Can I jump in on that?Sorry, Brooke, you be next but the next question then is that's more my stage in life.Now you have the house.Now you have the mortgage with the interest payments on it.Do you try and smash that mortgage?
And then start looking at chairs?Or is it a both at the same times you go?Well, let me aim for a like you said a 15 years paying off the mortgage and then if you have spare also invest in the share market, or do you focus all of it to try and get rid of the the dead?
I like the emotional feeling of being debt-free of saying well I want to get rid of the dead but which is a sensible approach but you need to understand the importance of Time.How much you have at 50, 60?70 80.Whatever depends on the rate you can achieve and the length of time.
If you're 55 with half a million dollars in, super, if you can delay retirement until age 60, you get 40% more because I tell the story of the Lily in the pond.
Lillian upon starts as a tiny Speck and doubles every day.How long to go from quarter fall to 42 days quarter, full to half on the 9th half to fall on the 10th.
If that 10-day frame is your investment journey.And you've got to stop and harvest on the 8th.You've missed out on three quarters of what You could have had to every time your money doubles, there's more growth in the last doubles and all the other doubles one thousand, two thousand, four thousand, eight thousand, sixteen thousand.
So you need time, that's why it's so important.Once you've got your mortgage under control, is then investors.Well because you need to get that Capital some growing because the extra five years.Is make some massive difference.
So quantify or clarify getting your mortgage under control, what doesn't what is that and under control mortgage look like?Well I think eight dollars of thousands by what you said earlier, okay?If you can pay back eight dollars, a thousand a month and then you invest anything extra, you can invest by a lion Dubai shoes or just investing every thing in chairs because of my my instinct at the moment especially again.
What Luke said, interest rates going up.So now Anakin going on, need to put more money into the mortgage.It's that compound.So I look at the short-term Returns on, on the share market versus what my interest rates are, and then makes me panic.But I think that's a paradigm shift.
What you just said is, don't focus on the short-term returns focus on that long-term.And remember I said, get the highest effective rate of return possible If you focus on your mortgage you're getting the mortgage, right?Yeah.
Maybe 45 shares you should get 9 But you want to make sure that you're comfortable, you never want to be forced to dump shares at the worst time.See, I should have had this conversation 15 years ago.
I hear that.So often these guys are 15 years ago.So great they're fine.So what about what people with heck steps?Sorry like it for me, I've finished uni couple years few years ago and I've got a hex editor, say, 50 60 thousand dollars with an interest rate of about 3% or keeping up with inflation.
Everything would you try and pay that off as soon as possible?Or would you just let that come out of your tax and Just focus on the Investments.I think that that bigger letter pay itself off, I had a letter recently, for the paper, he had only had 18 Grand, I still visiting Grandpa it off but I think it's as big as 50.
I would like to lose that much invested, Capital your age.So it's a donor asked to pay that off.Same loser choice.If I've got the 50 Grand in mahom.Now why pay off the hex dead or investor?Same Vista.
Okay, dr.Brook.What have you got for us?So following along with the mortgage Trend, where is it better to have the money when you're paying off a mortgage in the offset for actually, in the mortgage and paying down the mortgage in the offset account in the offset.
And I'll tell you, one good reason why which isn't often talked about, I it means you can take the money if you need it.Secondly, a lot of people buy a cheap house to start.Then they want to keep it and they say to me, can I take a loan to buy the dream house because it's paid off but you can't see it paying tax on the rinse of the house to keeping, but just hypothetically, if there was a four hundred thousand dollar house with the 400,000 loan and you reach the stage where the offset is 400,000, the effect of debt is is zero.
Now you want to buy your I am home, you withdraw, the money from the offset, that's 400,000 dollars.As a deposit on the dream, home leaving the first hand, totally geared.It's a much more effective way, tax-wise, okay, that's awesome.
I just have a clarifying question just to to ask null as well, when you say totally geared and tax effective, could you just explain the It's between the interest that we're paying on our primary place of residence versus the investment property.
Now that we've just moved on, for the interest to be deductible.It must be for the purpose of buying the income-producing asset.So, if you buy alone for your own home and then you pay it off because it wasn't the deductible.
It's now a debt-free home.If you borrow against that home to buy and Dream Home.The purpose is for a private purpose is not deductible, but if you own a property, then it changes character.
I'm now going to move out of my - we geared own home.Go to a new home, the loan becomes deductible again, all right, meaning that the interest that you're paying on that home because it's a source of income comes off your textbook.
Yes.But only because the loan And it's the original loan, you cannot borrow against that house for the purpose of your own house.That makes sense.Anybody else is next more questions.So, is it worth it to avoid going into the upper tax bracket to salary sacrifice into Super as a lump sum before the end of the year, if you realize you are heading towards that upper tax bracket, should you dump some of your money into super pretty quickly to avoid being taxed at a higher rate, copy me extra tax and keeping the extra money or putting.
Money and super and paying less Tak next principle.Every decision has good points and bad points.Every decision, right?How old are you?I'm 27?Okay, the advantage is you get a tax deduction, right?
That you lose, 15% going in, but that's it.But that money is now Untouchable for the next 40 years.So the price of the the tax saving now is losing the money for 40 years.
That's all I've got no trouble with that.I mean I think it's great to build a build up your super but she must understand.Maybe another option would be to borrow for investment getting the ten thousand dollars is tax deductible interest except that the income from what you buy would negate it.
I also think that tax brackets are going to happen.I feel the Labour government's, go to increase the taxes on you guys.It's one of those things.There's no certain answer that's all.My next question is just want to give you opinion, because I always like to, I like to dig into every investment, wind Sunday, the spot.
That's all so pathetically that's right.Yes!Hypothetically.If the interest rate goes up by say, 10% in debt, Spence.If like I'll ask you about what you are at your current state, like in your age and the moment, what are your first tree moves?
If the interest rate goes up by 10%, what is the first tree things that you're going to do?When it comes to either?Yo, your cash flow, your investment property or yourself, okay?If rates go up by 10, which won't happen, half the homes will be foreclosed.
It'll be absolute.Trophic property debacle.Because everyone will lose their houses.Not going to happen.Okay.All right, I think there's a it's a true psychological thing.
Most people worry about what isn't going to happen and don't worry about what is going to happen.That makes sense.You got good health insurance and income repost but insurance, and Trauma Insurance.See it's more unlikely that you'll get a not being personal here not at all likely.
You'll get cancer stroke, heart attack and right sir go to 10.In okay well it's almost you know, if we average it long enough isn't it, it's almost a certainty that you'll get cancer stroke or a heart attack at some stage.Whereas the other is a hypothetical but I can see by the look in their eyes, both Hannah and Luca hanging for this period where the rates go up and all the houses are foreclosed so that jump in Vienna of course if that happened no one could afford a loan and rinse and go Sky High.
Rinse it.Go Sky High because no one could afford a house.They probably couldn't afford to pay rent.Either.The I remember, when the rates were 15%, I put my money in a term deposit.So I was only 15 we're speaking about like insurances.So like income protection, tpd trauma and we talk about life insurance, are you want to consider Insurance because you know how superannuation super companies they also offer Insurance, same ones that we have, which are recommend people at all.
Eh the 20s or 30s, is it better to take these kind of insurances, true, all super, or is it better to take it in a separate company like third-party company?Like what I, okay, if the ensures is deductible like income replacement, you pay that personally.
Because you want the because you want the text adduction for it.If it's life insurance or death or tpd, which is non-deductible, take it inside, super because your contributions are tax deductible.So non-deductible Insurance inside super and deductable in your own name or your own business entity just be very careful.
If you change super funds, you may lose your insurance will possibly.There's a case at the moment, a guy was dying with cancer.You had a four hundred thousand dollar life policy and he's wife to save fees Amalgamated, he super and lost his life insurance.
These are older people but still these things happen.And how you feeling?How you feeling inspired overwhelmed?Hey, like I'm trying to keep a simple.I'm doing my best.It's a big topic.No it's good, it's good.Yeah, it's good to have some sort of financial education because Let me know your any of that in school.
So I've got a new book coming out in eight weeks, called 10, simple steps to Financial Freedom, written for young vets young uni students Donnie, 120 pages in ten chapters, right?That's 10 things you must do.
Right?Number one, is you spend less than you earn is. 80% of people don't I'm sitting here looking at the group of people we've got here.And everyone here is an investor already and let's go ahead.It was like, that's awesome.Yeah, they're bloody young.
So it's great any time on this side?Well, Mike, my question is, there are, you know, another 390 of us in the organization.Many of whom are not yet investors.
And I don't know if you could, you know, you've been around a long time and you've seen a lot of people's Financial situations and their quality of their lives.Is there anything you can share with us that helps explain the absolute importance of making that shift?
You know, the tactics will come over time but that actual spend less than you earn and invest something but it changed my life forever.But you've seen this happen for a lot of people and I'd love you to potentially explain why that's just so important a decision.
Mike starts with desire, you know, thinking very which was the book that changed my life.Number one is desire and some people haven't got it.That's why we say you hire attitude and teach skills.You can never teach attitude.
Attitude.Something you hire.I think you know there are doers and they're not doing it.Are we all done, guys?Have you got more questions?Always starting know.I have a few more.Okay, so I guess like when it comes to financial mindset because I think a few people that I know I've spoken to the the mindset it so it's like, you know how a lot of people go like, especially the new investors at this moment probably listening to this podcast in future.
They always had the mindset of it is probably too late to how do we get ourselves?Cough out of that because like, how you say, you can you can never teach attitude it.But what pulls our wisdom?Can we get from today?Especially for those people who have been started investing yet, no matter what stage of your life, how is it that?
Before you find yourself saying it is too late to do something.You know, change that my inside, I get that from 80 year olds as well.I mean, it's never too late to make the best of what you've got.But young people have got the Just think time, I don't have time.
I can't buy time.Once 24 are scouts gone, like you've got all that time for compounding to work, understand the power of compounding, you need that sense.I need to start.And if they, as I said, it's got to be automatic every day.
You do something.So easy, not to But by having it automatically happen, makes it work.And I think the reason we don't sometimes, why certainly personally is, if you don't feel in control, then it's really scary.
Like you, you don't want to look what's hiding in the forest because you head in the sand, sort of an approach.It's scary to start because you worried about what everybody else is.So far ahead of me or I don't know what I'm doing or anything like that, but I think exactly that just saying well face that initial hurdle and but there are some people in their life, always want to talk about it, but not doing it.
You must have struck that.You know, oh yeah, I don't want to talk about it.Just do it and do it.You know, it was recited, the longest journey starts with one step.If you never make the first step, you'll never make the journey you got to start.Okay.
So I'm 32 I don't have kids but I guess like this is for parents of future parents.Like what do you think is the first step if they want to consider investing for their children's future right now?I mean, like we know it's never better than today to do it, okay?
You don't want to stop kids helping themselves.I think, as parents, your first job is to get your own finances under control, that's the first thing then you teach your kids.Their my daughter has on her on a fridge, is the kids jobs for the week and how much they get for those jobs, you know, you've got to teach the kids about you of work.
And I think that's how you start you instill in them the principles because these days, they don't see cash.They see you go to the bank into the ATM and sticking them in the cabinet paper.So poor they see you swipe your phone kids aren't used to seeing exchange anymore.
That's I think it's always get back to basic principles.You walk your dog and you feed it.Well, its basic principles.You know, that makes sense.You must of these things.There there are no simple answers to many questions, but there are some at what point would you start our effect passing to super well?
Again, when you're ready to lose that money, till you're 60, I think, but it's a nice way to build a nest egg and you can put in twenty seven and a half Grand a year as a tax deduction. 27500 is a tax deduction that includes from all sources you know nice way to get going.
So if you say when you ready do you mean mentally and emotionally ready or find that?Is it while I have some money will be there at the end of the month?It's one of these things I think it's a good thing because in ten years time you're going to have half a million bucks.When you're 40, you have half a million bucks in super And that'll be more than most people and you learn to take care of it and watch it, and tender it and nice thing to have.
So, as soon as you have the money spare to do it, I think that idea here was the danger with other way we waste it.I'll buy a new handbag, I'll go for a trip have a night out, you know, all of a sudden that goes but putting your 27 and a half or two thousand a month, then that's done.
It's a nice foundational.Be there for you, if you get what relationship, And it breaks up.Its one thing that the other guy fought hard to get his hands on oh, really.Oh yeah, what about?So you say like, you know, 2000 is like a no-good start to fight in this a month.What about for those that have very little fat at the end of the month to invest.
Would you then, say recommend keeping to raise or spaceship or something of that nature?But the people who don't have as much money to invest in his other people, then I think you change your mindset and you decide how much a month you need to invest then Cut your cloth and cut your expenses and that should be your first investment.
If you need 2,000, a month to invest, you put it in there first.That means you don't have a beer, you don't have a beer.If you don't have avocados or something because it's human nature to spend what we get.So 99% of people will say, I kept nothing left to invest.
But once you take the money out of the stuff, while we still do it, I had a restaurant.Okay, to me very, very successful.Did it can't.Save said, Okay, I want two thousand bucks a month for you and your wife.It is super every month.
As a tax deduction.No contract.Oh, can't do it.Do it three months later, GM doing it. 12 months later, was doing it for years.Wait, I've got 600,000 there, you know.He bought a car you'd paid off witches.
Yeah, we all pay our commitments.So it's like Robert Kiyosaki says the, you know, pay yourself first and everyone else.That's the basic principle is not new to him.That that was said in long before him, I said that longer.He said that's our image him again.
That's alright.I don't mind, it's all look, it's all good to learn things, it's great.Think about it, talk about it and I think these these principles have been around since the Romans, you know, or even before us in Civilization.It's just that there's no formal way, they're taught.
If only, you know, it's not taught in high school, the richest man in Babylon.Remember, you know, the first thing is a part of all you earn is yours to keep.That's the first principle the richest man in Babylon.So if you keep part of what you earn you can't get overdrawn you won't for for buy now pay later.
Then that grows and you put that to work and it grows and grows and grows and it grows faster and faster.The trouble was it takes a while to get going and that's why people give it up psychology.They want it right now.Instantaneous give me a tip.
Although I what's a good tip?Now, I get it all the time.All right, everybody done.You know, it's amazing.Thank you but nice to meet you got was virtually.Thank you so much pleasure, pleasure.
To make work not suck.And I personally thought that the answers to a fulfilling happy carrier as a bit play in personal growth and better workplaces, and all of the other non-clinical staff that we talked about, but something that surprised me, when we started doing, the clinical podcast was help bigger role that played in my personal enjoyment of work and judging by the feedback.
We get from our listeners, it's a common occurrence.Here's why I think it is.Sucks to feel in the dark with your cases, the feel green or Rusty in your knowledge, you feel guilty because you feel like you should know more and you should be learning more but you're also trying to have a life outside of it.
So ongoing learning Falls by the wayside on the flip side.It's a really nice feeling to know your stuff when you get that case to know the answer or if there is an answer to know that it's not because of your lack of knowledge.It's just one of those cases Patents breeds confidence.
Confidence is key.And our clinical podcast is, the easiest way to work on your competence little bits of growth every week with minimal effort on your part, try it works.Join our growing community of it felt needed, and get your mojo back at Vivian's the super cast.com.
Patents breeds confidence.Confidence is key.And our clinical podcast is, the easiest way to work on your competence little bits of growth every week with minimal effort on your part, try it works.Join our growing community of it felt needed, and get your mojo back at Vivian's the super cast.com.

Noel Whittaker