Investopoly
383 episodes - English - Latest episode: 24 days ago - ★ - 1 ratingEach episode, about 15 minutes long, is packed with concise tips, strategies, research, methodologies, case studies, and ideas to help you safely and effectively grow your wealth. Stuart Wemyss, a qualified financial advisor, accountant, tax agent, and licensed mortgage broker, delivers holistic advice. With four authored books, including "Investopoly" and "Rules of the Lending Game," Stuart shares his insights through a weekly blog, which is replicated on this podcast.
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Episodes
Beware: Not all ETF's (exchange traded funds) are what they seem
February 16, 2021 22:00 - 15 minutes - 10.6 MBExchange Traded Funds (or ETF’s) have become very popular, particularly over the past 5 years. In fact, the amounts invested in ETF’s has doubled over this time. Last year (2020), Australians invested over $20 billion in ETFs. It is true that there are some advantages to investing in ETF’s. However, of course, not all ETF’s make good investments and there are some common pitfalls you must be aware of. What is an ETF? An ETF is simply a managed fund that is owned in a company structure and...
An investment case for putting all your property eggs in one basket
February 09, 2021 22:00 - 16 minutes - 11.6 MBIt is generally an accepted investment principal that diversification can reduce your risk and improve investment returns. The common vernacular is, spread your eggs amongst various baskets. I would agree with this principle, so long as it doesn't result in deterioration of investment asset quality. Sometimes property investors should not diversify. That's because the quality of your investments, will determine your future investment returns. You cannot expect to invest in average quality a...
Good financial decisions are a compounding asset
February 02, 2021 22:00 - 17 minutes - 11.9 MBOne good financial decision will have positive consequences. But five good decisions in a row will be life changing. It will create a lot more than five times the positive outcomes than one good decision will. That’s because good decisions are a compounding asset. Our lives are a sum total of the choices we have made - Wayne Dyer. When it comes to building wealth and fulfilling your lifestyles goals, true success comes when you master all six facets: (1) good cash flow management, (2) havi...
Can property prices keep rising at the same rate?
January 27, 2021 00:36 - 23 minutes - 16 MBA common question people ask is, “can property values continue to rise at the same rate which they have over the past 3 to 4 decades?” The short answer is no, they cannot. Mathematically, this is unlikely to occur as incomes are not rising at the same pace. I came across the interesting graphic/visualisation (below) which sets out how property values have changed in real terms (excluding inflation) since 1970. The surprise for me was how much Canberra prices have risen (thanks, public serva...
6 alternatives to savings accounts
January 19, 2021 22:00 - 17 minutes - 12.1 MBInterest rates on savings accounts were over 5% p.a. in 2011… only 10 years ago. Today, you would be lucky to receive more than 0.5% p.a.! That means your savings won’t even keep pace with inflation, let alone provide you with any investment return. As such, many investors are wondering what to do with their cash savings, other than depositing the money with a bank. This blog discusses some alternatives to bank deposits. However, please do not make any financial decisions solely on the inf...
6-step process I used to set my personal financial goals for 2021
January 12, 2021 22:00 - 25 minutes - 17.8 MBThe beginning of a new year is a great time to take stock and set personal and financial goals for the coming year. I wanted to share the process that I use personally. It has worked well for me and of course, I use the same approach when advising my clients too. It’s particularly useful to undertake this exercise after you have had a break, which most of us do over the Christmas/New Year period. That way you should have enough emotional energy to think and reflect clearly. It’s not a good ...
Four reasons the property market will take off in 2021
December 15, 2020 22:00 - 15 minutes - 11 MBDuring 2020, most economists and commentators predicted that property values would plummet by 10%, 20% or even 30%! In May I wrote a blog outlining the reasons why I disagreed with these overly bearish forecasts. We now know that property prices didn’t fall by any more than 2% to 3% and have since recovered. In 2021, I predict the property market rhetoric will switch from “values will fall” to “values are too high”! The media will start saying that property prices are too high, they’re over...
How much should you spend on investment property maintenance and improvements?
December 08, 2020 22:00 - 14 minutes - 10.1 MBOne of the advantages of investing in property is that you can make improvements to enhance its value and consequently your personal wealth. A disadvantage is that dwellings require ongoing maintenance, and this expense reduces an investment property’s cash flow. Minimising or avoiding maintenance costs is often a false economy. Maintenance cannot be avoided, only deferred. Problems either remain unresolved or they get worse. Either way, you will have to complete the maintenance at some sta...
What has 2020 taught us? Top 5 financial lessons learnt this year.
December 01, 2020 22:00 - 19 minutes - 13.1 MBWithout wanting to seem too philosophical, I believe that life offers us lessons, but we must be prepared to look for them. As we are approaching the end of 2020, I thought it would be a good idea to reflect on what Covid has taught us about our financial decisions. I have been very proud of how my clients have stayed-the-course this year. Only one client insisted on selling down some investments when the pandemic hit. To be fair, there were some extenuating circumstances. Thankfully, we he...
Don't put your tax deductible interest at risk: 10 rules to follow
November 23, 2020 22:00 - 20 minutes - 13.8 MBInterest expenses are often an investors largest tax deduction. You must realise that the onus of proof is on the taxpayer (you), not the ATO. That is, you must be able to prove to the ATO that your deductions are legitimate. If you are not able to do that unequivocally, you risk the tax deduction being denied in full (and you will have to pay interest and penalties). Therefore, it is wise to understand some basic tax rules so that you do not inadvertently put any of your tax deductions as ...
Important insights into a post COVID recovery
November 16, 2020 22:00 - 13 minutes - 9.49 MBUnderstanding how Covid lockdowns have impacted certain individuals and industries, helps to inform us about how quickly the economy and markets may recover. With this in mind, I thought it was useful to share a number of charts published recently by the RBA and banks which provide important and interesting insights. Covid has discriminated against younger workers and lower income earners Workers between the ages of 15 and 34 account for more than half of the jobs lost (unemployment) to ...
How much does financial advice cost?
November 10, 2020 22:00 - 22 minutes - 15.7 MBIf you need financial advice, how much should you expect to pay for it? Of course, the cost is what you pay, but value is what you receive. The value needs to exceed the cost for it to be worthwhile. So, how do you assess the value of financial advice? Whilst the answers to these questions can vary significantly, we must take into account that value assessments can be subjective, and I wanted to share my insights to help people with this analysis. Financial advice fees create tension On o...
How do you ensure your will is set up properly?
November 03, 2020 22:00 - 18 minutes - 12.5 MBMost people acknowledge that a will is an important document to create, but we all hope there’s no urgency to prepare it. As such, many people rarely ‘get around’ to it. One of the reasons for this is they don’t know enough about it and how to get started. This blog answers commonly asked questions and matters that should be considered when drafting estate planning documents. Rules are State based The laws that govern the administration of wills and intestacy (if you die without a will) i...
Research report: Performance review of investment-grade apartments
October 26, 2020 23:30 - 21 minutes - 14.7 MBIt is my observation that investment-grade apartments in Melbourne have under-performed (from a capital growth perspective) compared to houses over the past 8 to 10 years. That is, apartments have generated very little capital growth (sometimes none), whereas houses have grown in value by between 5% and 8% p.a. over the same period. I have prepared a detailed report investigating the factors that have contributed towards this capital growth performance gap. Whilst I have focused my analysi...
Update: US election, impact of zero overseas immigration, US tech stocks, super-low rates and more
October 20, 2020 22:00 - 17 minutes - 12 MBInvestment update: How to navigate current uncertainties There is never a perfect time to invest. The stars never align. In reality, there will always be reasons why investing now feels risky. The solution is to learn to dance with uncertainty. Generally, most people can achieve this by doing two things. Firstly, focus only on generating quality investment returns in the long run. Ignore any short-term outcomes, as they are rarely relevant. Stick to proven investment fundamentals. Only ado...
Why were you so wrong?
October 13, 2020 21:00 - 14 minutes - 9.73 MBHave you ever had a strong opinion (prediction) about investment markets which was subsequently proven to be incorrect? A recent example was when many people predicted borrowers would be forced to sell their properties due to the Covid lockdowns and the market would crash. This outcome now seems unlikely. It is my view that a humble mindset is the best way to avoid being blindsided by unexpected investment risk, whilst at the same time spotting all opportunities. Let me explain. Predicting...
Federal Budget 2020: Overview & analysis
October 06, 2020 22:29 - 19 minutes - 13.2 MBThis year’s budget was definitely aimed at business rather than individuals, and it needed to be. The main goal of the federal budget is to create jobs to repair the damage that Covid has done to the economy and Australian community. Therefore, if you already have a job, there’s not much good news for you in the budget. However, there is plenty of good news for the Australian economy which will probably enhance the share market and property investment returns. What’s in it for individuals?...
Lending update: interest rates and borrowing capacity improvements
September 30, 2020 01:27 - 19 minutes - 13.1 MBThe government made an important announcement last week. This change could substantially increase your borrowing capacity in the next year. It is perhaps the most significant change that has occurred in the last decade and will further fuel property price growth. I also wanted to update you on interest rates, particularly in light of recent expectations that the RBA will soon cut rates again. A positive change for investors and the property market In 2009, the government re-wrote the laws...
Why blue-chip property values will rebound by > 10% in 2021
September 22, 2020 23:00 - 19 minutes - 13.3 MBn May, I wrote a blog after CBA released its bearish ‘worst case’ forecast for the property market. It predicted a 32% drop in prices! I outlined in my blog why I thought that was rubbish and prices would not fall by more than 10%. To date, according to various data sources, property values have not slipped by much more than 2% to 3%, which is barely noteworthy. CBA revised its forecast on 9 September admitting they got it wrong. Now that the virus is under control in Melbourne (and also n...
How long will your super last after retirement?
September 16, 2020 23:00 - 20 minutes - 13.8 MBThe compulsory superannuation contribution rate is set to increase by 0.5% each year for the next six years (i.e. from 9.5% to 12%) beginning from 1 July 2021. It is understood that the Federal Government is considering postponing next year’s increase, due to concerns about whether the economy can afford these higher employment costs and at the same time as deal with the current economic challenges. A lot of the commentary about superannuation, including whether next year’s contribution inc...
It's not the size of the return, it's the length that matters
September 10, 2020 00:14 - 20 minutes - 14 MBInvesting well is important. However, investing well over long periods of time is most important. Everyone would agree that making a one-time 50% return on an investment is a wonderful outcome. But making a 7% return each year for 40 years is a far better outcome, as it multiplies your initial investment by a factor of 15! This is an important principal to remind ourselves of, especially at the moment when our lives (and, to some extent, markets) have been turned upside-down by Covid-19! ...
It’s not the size of the return, it’s the length that matters
September 10, 2020 00:14 - 20 minutes - 18.6 MBInvesting well is important. However, investing well over long periods of time is most important. Everyone would agree that making a one-time 50% return on an investment is a wonderful outcome. But making a 7% return each year for 40 years is a far better outcome, as it multiplies your initial investment by a factor of 15! This is an important principal to remind ourselves of, especially at the moment when our lives (and, to some extent, markets) have been turned upside-down by Covid-19! ...
How to tell if your accountant is missing valuable opportunities?
September 01, 2020 23:00 - 17 minutes - 12 MBThe difference between a great and an average accountant can be significant. Not only is tax one of your biggest annual expenses, but a great accountant should be able to proactively identify other financial opportunities, in addition to tax-saving measures. Typically, the more complex your financial situation is (e.g. if you are self-employed, running a business, have a trust or SMSF, etc.), the more you have to gain from having the right accountant. That said, working with a great account...
Why the next property you buy is the most important one
August 26, 2020 03:15 - 15 minutes - 10.9 MBThis blog’s title is a bit deceptive, because every property you buy is important, for either lifestyle or financial reasons. I contemplated using the title: “why the first property you buy is the most important one”. But the reality is, if you have made a mistake on your first property, you can always start again. The general theme of this blog is to demonstrate that the compounding impact of buying the right property is critical to understand. Why is it so important? Let me explain usi...
Property data is not always right, or helpful
August 19, 2020 00:45 - 16 minutes - 11.2 MBMy professional life has been all about “the numbers” for more than two decades! So, as an accountant and financial advisor, it pains me to say that numbers are not always right! Numbers are factual, verifiable, logical and the ‘robustness’ gives me a lot of confidence. However, when it comes to investing in property, a focus on numbers alone can cause very costly mistakes. Evidenced-based approaches are rooted in simple math I am a strong believer in only employing evidenced-based invest...
5 steps to (safely) maximise your borrowing power
August 12, 2020 23:54 - 1 hour - 44.5 MBSlides - Click here Watch the video - click here ASK ME A QUESTION ON YOUTUBE: https://www.youtube.com/watch?v=ACnxmEP8vv8 My YouTube channel: https://youtube.com/@investopolypodcast If this episode resonated with you, please leave a rating on your favourite podcast platform. It helps me reach more incredible listeners like you. Thank you for being a part of this journey! :-) Click here to subscribe to Stuart's weekly email. SPECIAL OFFER: Buy a one of Stuart's books for ONLY $20 in...
Why would you refinance? (Other than to get a lower rate)
August 05, 2020 02:04 - 22 minutes - 15.8 MBAccording to the ABS, the number of people refinancing their mortgage increased by over 63% in the year to May 2020. Quite often people think the only reason to refinance is to obtain a lower interest rate. However, this thinking is incorrect. Typically, you don’t need to refinance to obtain a lower interest rate (more about this below). As an experienced investor myself, I can tell you that there are far more important reasons to refinance your loans. What is a refinance? This might sound...
Why you should stick to your day job
July 28, 2020 23:00 - 16 minutes - 11.6 MBThere are three ways to generate passive income; start a business, invest or speculate. The key word in that sentence is passive. Passive means you can generate economic benefits without the requirement of your personal exertion. Since it doesn’t require personal exertion, it frees up your time to spend it on activities or with the people you love. Each of these three options have merit. But the important thing to note is that not all three will suit everyone. This point is very important t...
Which super fund produced the best returns in 2019/20?
July 23, 2020 00:53 - 26 minutes - 18.3 MBDespite the share market volatility as a result of Covid-19, all major industry super funds produced a positive investment return over the past financial year. Whilst that might seem entirely good news, there are some concerns for which industry super fund members should be aware of. Let’s start with the good news first I have compared the largest 8 Australian industry super funds. According to data collated by our research provider, Lonsec (SuperRatings), Cbus produced the best returns in...
Why is the stock market crazy?
July 14, 2020 23:31 - 17 minutes - 11.8 MBYou may have read commentary that the share market isn’t reflecting reality at the moment. For example, the share market can rise by 3% on the same day that we receive bad news in respect to the spread of the virus. Spectators are left thinking how can market values rise when global economic expectations are so negative? That is a fair question. Then there’s stocks like Tesla in the US and Afterpay in Australia. Electronic car manufacture, Tesla's share price has risen by 50% over the past...
What impact will Melbourne’s virus lockdown 2.0 have on property and economy?
July 08, 2020 02:00 - 18 minutes - 16.5 MBMelbourne’s Covid transmission outbreak has been widely publicised by the media. Melbourne’s daily positive test rate is relatively benign by world standards (i.e. 0.5-0.6% versus 7.5% in the USA). However, the reinstated 6-week lockdown of Melbourne is likely to have a negative impact on Australia’s economy. Melbourne is responsible for producing over 19% of Australia’s GDP. Spending has bounced back strongly with Victoria lagging Firstly, let’s start with the good news. The good news is ...
What impact will Melbourne's virus lockdown 2.0 have on property and economy?
July 08, 2020 02:00 - 18 minutes - 12.4 MBMelbourne’s Covid transmission outbreak has been widely publicised by the media. Melbourne’s daily positive test rate is relatively benign by world standards (i.e. 0.5-0.6% versus 7.5% in the USA). However, the reinstated 6-week lockdown of Melbourne is likely to have a negative impact on Australia’s economy. Melbourne is responsible for producing over 19% of Australia’s GDP. Spending has bounced back strongly with Victoria lagging Firstly, let’s start with the good news. The good news is ...
Proof that 'what' you buy, not 'when' or 'how much you pay', matters the most
June 30, 2020 22:00 - 15 minutes - 10.3 MBThe price you pay for an investment property will only matter if you purchase the wrong asset. An investment grade asset will, in the long run, mask any purchase price errors that you may have made. That is why focusing on the quality of the asset is easily the most important thing you must do when investing in property. Simple math proves timing the market or buying below fair value is relatively meaningless. Purchasing above or below intrinsic value Let’s face it. We all want to get the ...
Not all low-cost indexes exhibit the same risks and opportunities
June 24, 2020 01:44 - 23 minutes - 16.1 MBOver the past decade, investors and large institutions have been deserting expensive active fund managers in return for using their cheaper index equivalents. According to Morningstar, investors in the US withdrew $USD204 million from actively managed investments (net) in the 2019 calendar year. However, low cost index funds continued to grow in popularity receiving (net) $USD162 million of new money. The transition away from active management into low-cost index funds has been happening fo...
How low interest rates can help build your super
June 16, 2020 23:00 - 17 minutes - 11.9 MBIf you have a couple of thousand dollars surplus cash each month, what is the most effective way to invest it? You could invest in the share market, repay your mortgage(s) or invest in property. But there’s another strategy that might be particularly more attractive, especially since mortgage interest rates are ridiculously low at the moment. You may not want to repay debt or invest in shares or property It certainly doesn’t cost a lot of cash flow to borrow to invest in a residential pr...
Tax planning ideas for 2020
June 10, 2020 04:29 - 14 minutes - 9.71 MBWith the financial year coming to a close, I thought it was timely to share some of the common strategies we consider when helping clients minimise their taxation liabilities. Of course, none of the information below should be considered personal taxation advice. I don’t know your circumstances and everyone’s situation is different. Therefore, please don’t act solely on the information contained in this blog. It is best to check with an experienced and appropriately licensed professional. ...
What is quantitative easing, and should we be concerned?
June 02, 2020 23:57 - 18 minutes - 12.4 MBGlobal ratings agency, Fitch estimates that the value of Quantitative Easing (QE) implemented this year could reach $9 trillion! To put that in context, that is equal to more than half the cumulative total global QE that occurred between 2009 and 2018! The Federal Reserve in the US has alone pumped $4 trillion into the market over the past 11 weeks. This is absolutely unprecedented. Should investors be worried about the long-term impact of all this money printing (QE)? What are the risks th...
Why I think the property market and economy will be okay
May 25, 2020 23:00 - 20 minutes - 13.8 MBThere have been a number of economists and commentators who have predicted that property values will fall anywhere between 10% and 32% this year. It seems like it’s almost become a competition for who can be the most bearish. However, my view is a lot less bearish. I believe property values won’t fall by more than 10% and it’s quite possible that they might not fall at all. You could be excused for thinking that I’m an unrealistic property optimist, but I promise that is not the case. Of c...
Will ‘working from home’ change how we invest in property?
May 19, 2020 23:54 - 14 minutes - 13.4 MBIf many employees continue to work from home, then perhaps demand for property in close proximity to capital city CBD’s will fall. And conversely, perhaps demand for property in regional centres that are well serviced by pubic transport (trains) will increase. This encourages us to consider whether the work-from-home movement will change the way we invest in property. Covid forced us to work from home Most employees have been required to work from home over the past few months due to the C...
Will 'working from home' change how we invest in property?
May 19, 2020 23:54 - 14 minutes - 10.1 MBIf many employees continue to work from home, then perhaps demand for property in close proximity to capital city CBD’s will fall. And conversely, perhaps demand for property in regional centres that are well serviced by pubic transport (trains) will increase. This encourages us to consider whether the work-from-home movement will change the way we invest in property. Covid forced us to work from home Most employees have been required to work from home over the past few months due to the C...
What happens (to rents and prices) when it's cheaper to own your home than rent it?
May 13, 2020 00:50 - 15 minutes - 10.9 MBWith interest rates at all-time lows, in some situations, it is now a lot cheaper to be an owner-occupier than a renter. And with the prospect of interest rates not rising anytime soon, it could stay that way for a few years, unless the market changes. I thought it would be interesting to analyse the potential impact of this phenomenon. Obviously, there are some practical implications for people contemplating renting versus buying. But also, there will no doubt be broader consequences for t...
Mastering cash flow management during the pandemic
May 05, 2020 23:06 - 14 minutes - 10 MBDue to the impact of coronavirus, many people are having to navigate unexpected changes in income and expenses for the first time in their life. This is something I have been talking about over the past few weeks with clients, during presentations and podcast interviews. Cash flow management is the cornerstone of successful wealth accumulation. It doesn’t matter how much you earn, if you don’t manage cash flow effectively, it’s unlikely that you will be successful with building wealth. I ha...
Which strategy? Upgrade your home or borrow to invest?
April 29, 2020 23:00 - 18 minutes - 12.4 MBA few months ago, a reader of this blog asked me to analyse two options. Option one is to borrow more money to fund an upgrade of your family home and consequently enjoy tax-free capital gains. The second option is to invest in property. The reader wanted to know which is the best option, net of all taxes such as capital gains and land tax? Widen the scope of the question I’d like to widen the scope of this question and add one more option – investing in shares. I have concerns with invest...
Will property prices fall by 10% because of higher unemployment thanks to COVID-19
April 22, 2020 22:00 - 19 minutes - 13.4 MBCBA Economics stated last week that property price declines are “inevitable”. It has forecast that prices will fall by circa 10% in Melbourne and Sydney over the next 6 months. It cited many reasons for this forecast including higher unemployment, lower economic activity, lower mortgage volumes, falling rents and fewer overseas buyers. I wanted to take some time to look at this forecast and provide my commentary. This exercise serves as reminder that all forecasts are inherently uncertain a...
How to make financial decisions in times of high uncertainty
April 15, 2020 22:00 - 16 minutes - 11.2 MBIf there is one certainty in life, it’s that there’s always going to be some uncertainty. Of course, there are times in our lives where there’s higher levels of uncertainty, which can be very stressful. But, to a degree, we all have to become comfortable with some level of ‘uncertainty’ and learn how to dance with it. This is especially true with financial decisions. Markets never exhibit zero risk (i.e. no uncertainty). This blog considers how to financially navigate uncertain times, much...
Property and loan related FAQ
April 08, 2020 23:00 - 17 minutes - 12 MBWe provide answers to a number of frequently asked questions below. We will continue to add new questions and update our answers as events and government announcements unfold. Questions about pausing loan repayments How does the loan repayment pause work? Banks are offering customers the ability to pause residential loan repayments for up to 6 months if they have been impacted financially by coronavirus. I provided links to each lender’s relevant webpage at the bottom of this blog post. ...
Working from home (home office) tax deductions
April 01, 2020 01:01 - 14 minutes - 9.72 MBWith most people being required by their employer to work from home, I thought it would be timely to update you on what deductions you can claim and what evidence you need as substantiation. Start keeping record now Remember, the onus of proof is on the taxpayer to substantiate any deductions they claim. If you use a tax agent, you probably won’t have to lodge this year’s income tax return until March 2021. How likely is it that you will remember everything you did and all the purchases yo...
Investing is more a game of lending than it is investing
March 25, 2020 00:05 - 17 minutes - 11.9 MBAuthor and property investor, Michal Yardney says “real estate investing is a game of finance with some houses thrown in the middle”. People think that the scarce resource is investment-grade property. But the scarce resource is actually borrowing capacity – as everyone has a limit to how much they can and should borrow. In a normal market, investors that seek professional advice from a buyers’ agent will eventually be able to identify and acquire a quality asset. And if you had an unlimit...
What financial actions should you take in response to coronavirus?
March 18, 2020 02:27 - 23 minutes - 16.2 MBGiven many people are worried about the unknown consequences of the Coronavirus, I thought it was timely for me to share my thoughts and advice. Like in all ‘crises’, it is important to not let emotion or fear drive your responses. ‘A steady hand on the tiller’ is the best approach when navigating any storm. I acknowledge that the Coronavirus may have caused significant emotional and heath distress to people around the world. I fully empathise and understand this situation and do not seek t...
My insights on the power of a gearing strategy
March 11, 2020 01:05 - 20 minutes - 14.1 MBBorrowing to invest, particularly in property, has been a very popular investment strategy in Australia. A mortgage is a wonderful servant but a terrible master. If you use mortgages properly, in a risk adverse way, it can be a very powerful wealth accumulation tool. However, if used poorly, it has the power to destroy more wealth than it creates. After almost 18 years since establishing this firm, I thought it was timely to share some insights and observations about borrowing to invest. In...