Investopoly
383 episodes - English - Latest episode: 25 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
What impact will coronavirus have on your investments?
March 03, 2020 03:17 - 19 minutes - 13.7 MBCoronavirus’ impact on share markets is a hot topic at the moment. We’ve seen global markets fall by over 10% between 21 February and 2 March 2020. It seems that the market’s sentiment shifted literally overnight from a state of being arguably ‘over-optimistic’ to being ‘very fearful’. Some of my clients have voiced their concerns about the impact that coronavirus might have on their investments. I wanted to share my thoughts on this and what actions, if any, you might take. The share marke...
The cost to hold an investment property hits an all-time low
February 26, 2020 00:00 - 12 minutes - 8.8 MBOver the last few weeks, lenders have aggressively cut fixed rates, particularly for investors that borrow on an interest only basis. Three and five year fixed rates now range between 3.18% and 3.40% p.a. This means the cost to hold an investment property is as low as it’s ever been. This doesn’t mean we all should run out and buy an investment property. The cost to hold a median property The graph below charts the annual after-tax holding cost of a median value house (average of Melbourn...
Major and important changes to income protection insurance
February 19, 2020 02:57 - 15 minutes - 10.8 MBI wrote a blog in December last year about how difficult personal risk insurance (e.g. income protection, Life and TPD) is becoming to obtain. Also, in December, the government directed Australian insurers to make some very significant changes to their products. I have been waiting to measure the insurers response to these directives. These changes will have a significant impact on your future insurance options. What is currently offered Before I discuss the changes that the government has...
It's a perfect time to sell dud investments
February 12, 2020 00:21 - 17 minutes - 11.8 MBWith share markets at an all-time high and sentiment in the property market recovering, it is a great opportunity to divest of any underperforming (dud) investments. Not all investments perform as expected. Therefore, it’s important you regularly review them. This review should be completed without any influence of emotion – it’s all about the numbers. Let’s first discuss why now might be a good time to do this. The US share market is high, very high Over the past 11 years, the US share ...
It’s a perfect time to sell dud investments
February 12, 2020 00:21 - 17 minutes - 15.7 MBWith share markets at an all-time high and sentiment in the property market recovering, it is a great opportunity to divest of any underperforming (dud) investments. Not all investments perform as expected. Therefore, it’s important you regularly review them. This review should be completed without any influence of emotion – it’s all about the numbers. Let’s first discuss why now might be a good time to do this. The US share market is high, very high Over the past 11 years, the US share ...
Are investment-grade apartments primed for growth in Melbourne and Sydney?
February 05, 2020 00:00 - 17 minutes - 11.9 MBOver the past few years I have observed a strong trend of investment-grade house prices growing stronger than apartments. It is true that all markets move in cycles and all cycles come to an end, eventually. It’s my thesis that several factors (such as the fall in the volume of new apartments, contraction of borrowing capacity and high population growth) are conspiring to create a growth cycle for older-style, investment-grade apartments. Supply of new build apartments drying up, fast Deve...
What are the best alternatives to term deposits?
January 28, 2020 23:00 - 18 minutes - 12.7 MBWith term deposit rates currently ranging between 1% and 2% p.a., and the prospect of further rate cuts by the RBA, many investors are contemplating where to invest their cash. Most commentators and economists agree that it looks like the interest rate environment will be lower for longer. If that turns out to be true, term deposit returns won’t even keep up with inflation. Therefore, most people will need to consider alternative investments. However, there is one potentially costly mistake ...
Tax benefits associated with investing in shares
January 22, 2020 00:00 - 16 minutes - 11.3 MBInvesting in shares can produce tax benefits. But it can also result in tax liabilities too. Terms such as “franking credits” and “imputation credits” (same thing) were frequently used during last year’s federal election (the Labor Party proposed to ban franking credit refunds). However, many people do not understand these concepts. So, this blog seeks to provide a simple overview of the possible taxation consequences resulting from investing in shares. There are two types of taxes that cou...
What does (should) a financial planner do for you?
January 14, 2020 23:00 - 18 minutes - 13.1 MBAn independent financial advisor does a lot more than just tell you how to invest your money. In fact, a lot of the work they do is ‘behind the scenes’ so I thought it was a good idea to share this information in a blog. This will give you a better idea of what a financial advisor does, and therefore whether you might benefit from having one. Develop a long-term strategy for you One of the predominant reasons people engage a financial advisor is to help them map out a long-term investment ...
Warning: Personal insurance is becoming impossible to get!
December 11, 2019 22:00 - 17 minutes - 12 MBPersonal insurances such as Income Protection, Life insurance and Total and Permanent Disability (TPD) are becoming impossible to get unless you are in perfect health. This change has occurred gradually over the past few years but has now reached the point that it’s become a real concern. This has a number of consequences which I discuss below. Insurers have a bad name We heard some shocking stories last year via the Banking Royal Commission about insurance companies including questionable...
How can you invest well and help the planet at the same time?
December 03, 2019 22:18 - 13 minutes - 9.24 MBThe bushfires in NSW and Queensland recently reinvigorated the conversation about global warming and whether the Australian government is doing enough to combat it. I’ll refrain from sharing my thoughts on this topic (I’m sure no one cares what I think about this anyway), but I thought it was timely to write a blog about sustainable investing. If you are concerned for the environment, this is a way of ‘putting your money where your mouth is’. Sustainable investing grew by 35% between 2016 a...
2020 Vision: What investment risks and opportunities will next year bring?
November 27, 2019 22:46 - 16 minutes - 11 MBWith the 2019 calendar year quickly drawing to a close, I thought it would be good to have a look at what next year might bring in terms of investment risks and opportunities. Over the years, I found that its best to form opinions on the economy by reading analysis/insights and attending economic briefings, whilst being careful to not overindulge. Too many opinions and viewpoints can confuse and sometimes send you down a rabbit hole. This should be complimented with real-world observation s...
How to invest in Emerging Markets such as China and India
November 20, 2019 06:00 - 15 minutes - 10.6 MBAccording to global bank Standard Chartered, the Chinese and Indian economies are expected to more than triple between 2017 and 2030. In fact, China’s Gross Domestic Product (a measure of a country’s economic output) is predicted to be more than double the USA. This is because the International Monetary Fund predicts that emerging economy growth rates will be nearly three times higher than developed economies. However, investing in emerging markets is not for the fainthearted. Developed ver...
Not all information is useful information
November 13, 2019 14:00 - 15 minutes - 10.8 MBNot more than 7 months ago, according to the media, investing in property was no longer a smart way to build wealth. Labor wanted to ban negative gearing, increase Capital Gains Tax (CGT), commentators were predicting that the market would crash by more than 20%, banks were tightening lending standards and so on. Since then, the world has returned back to ‘normal’ and most of these concerns have abated. According to the media, property is now a good investment again. But what if Labor had w...
What are your options if your interest only term is expiring?
October 22, 2019 22:00 - 12 minutes - 8.75 MBMost investors and some homeowners have interest only loans. However, the option to repay interest only doesn’t last forever. Most mortgages have a term of 30 years. Typically, the first 5 years is interest only. After that term has expired, repayments automatically convert to principal plus interest. If you have an interest only loan that is approaching the maturity of its term, what are your options? The government forced banks to curb interest only loans The volume of interest only mor...
Global recession. US/China trade war. Brexit. Low interest rates… What to do?
October 09, 2019 03:00 - 17 minutes - 15.9 MBIt feels like there is more global uncertainty at the moment. Things such as a global or domestic economic recession, US/China trade war tensions, Brexit, Trump’s rhetoric, the prospect of zero (or negative) interest rates, what property prices might do here, all seem to dominate the news. You may find these matters confusing and they can create inertia. So, how do you navigate these seemingly turbulent times? Consider issues in a long-term context Last week, the Australian share market f...
Global recession. US/China trade war. Brexit. Low interest rates... What to do?
October 09, 2019 03:00 - 17 minutes - 11.9 MBIt feels like there is more global uncertainty at the moment. Things such as a global or domestic economic recession, US/China trade war tensions, Brexit, Trump’s rhetoric, the prospect of zero (or negative) interest rates, what property prices might do here, all seem to dominate the news. You may find these matters confusing and they can create inertia. So, how do you navigate these seemingly turbulent times? Consider issues in a long-term context Last week, the Australian share market f...
The best way to help kids get into the property market
October 02, 2019 00:07 - 19 minutes - 13.7 MBAccording to the Australian Bureau of Statistics, first homeowner activity has increased by 51% since March 2016. First home buyers now account for just short of 20% of all new home loans. Whilst housing affordability has improved slightly recently, it is still tough for first home buyers to get onto the property ladder. However, the current low interest rate environment and the recent dip in prices is clearly encouraging more first home buyers. So, what is the best way to help your kids g...
Does you partner understand your finances?
September 25, 2019 22:00 - 12 minutes - 8.35 MBIn my experience, it is common for one spouse to have a greater interest in the family’s finances. In fact, the spouse that is ‘most interested’ typically takes fully responsibility for making the family’s financial decisions. However, there are some fundamental and important flaws with this approach which I’d like to share with you. What happens if one spouse unexpectantly passes away? If the spouse that is the ‘financial decision-maker” passes away, particularly if it’s unexpected, it do...
Property Market Prediction: what will the market do from here?
September 18, 2019 23:00 - 14 minutes - 9.73 MBThe media loves to talk about the property market; will prices rise or fall over the next year? It’s really not that important. “Timing” the market is virtually valueless, as I concluded in this analysis last year. That said, I understand the psychology behind it. People want to buy at the bottom of the market, just before it takes off and only experience the upside. There has been a lot of commentary recently about improvements in auction clearance rates, uptick in lending volume in July a...
Investing in shares 101: A beginner's guide
September 11, 2019 00:58 - 21 minutes - 14.6 MBMany people feel investing in the share market is a complex and scary concept. This is often due to a lack of understanding. I have written a number of blogs about the advantages of index investing. However, I thought it might be useful to take a step back and take a look at the basics of share market investing. How does the stock market work? The share market is merely a place where people come to buy and sell shares. Some people will be buyers, and some will be sellers. They will each b...
How should your split your wealth between shares and property?
September 03, 2019 23:00 - 12 minutes - 8.94 MBAustralian’s have a well-documented love affair with property. Many people pursue the “great Australian dream” of owning their own home and over 2.1 million taxpayers invest in property. Most Australian’s also invest in the share market too, via their superannuation. However, one of the decisions that many people struggle with is whether to invest in property, shares or both. And if the answer is to invest in both, how much do you invest in each and is it wise to do one before the other? L...
How will zero interest rates affect investors?
August 27, 2019 23:00 - 17 minutes - 11.8 MBYou would be excused for thinking that developed economies all over the world are gradually making their way to a zero interest rate environment. Long term fixed mortgage rates in the United States are less than 3% p.a. In the UK, rates are under 2% and even lower in Europe (circa 0.50% p.a. in France for example). In Australian this week, 5-year fixed home loan rate fell below 3% p.a. And in Demark the other week, Jyske Bank announced it would pay borrowers 0.50% p.a. to take out a mortgag...
The ATO is on the warpath! Here’s what it’s up to…
August 22, 2019 00:00 - 16 minutes - 15.1 MBWe all want to stay on the ATO’s good side. No one wants to invite a tax audit. But, at the same time, it is prudent to investigate all opportunities to minimise the amount of tax we pay. This often requires a balance between minimising taxes wherever possible, but not being too aggressive that you risk getting into trouble with the ATO. My view is that you always stick within the black letter of the law – never transgressing into any grey areas – as it’s never worth it in the long run. Th...
The ATO is on the warpath! Here's what it's up to...
August 22, 2019 00:00 - 16 minutes - 11.3 MBWe all want to stay on the ATO’s good side. No one wants to invite a tax audit. But, at the same time, it is prudent to investigate all opportunities to minimise the amount of tax we pay. This often requires a balance between minimising taxes wherever possible, but not being too aggressive that you risk getting into trouble with the ATO. My view is that you always stick within the black letter of the law – never transgressing into any grey areas – as it’s never worth it in the long run. Th...
Are property buyers' agents worth the money?
August 14, 2019 00:30 - 19 minutes - 13.2 MBA buyers’ agent is a real estate professional that will help you identify and negotiate the purchase of a property according to your specifications. They typically work for property investors but can also be engaged to purchase owner-occupier homes. This blog discussed whether you should use a buyers’ agent and if they are worth the money? Don’t forget, I’m independent! I have no vested interest in whether my clients engage a buyers’ agent or not. I am completely independent. The advantag...
How are you going to repay all your loans before you retire?
August 07, 2019 04:21 - 11 minutes - 8.14 MBBorrowing to invest (in property or shares) is typically a good wealth accumulation strategy as long as you do it prudently and adopt a proven methodology to select quality investments. If used wisely, debt can be a very effective tool. However, whilst your investment strategy might require you to get into debt, the strategy must also articulate how you will get out of debt (i.e. repay it). This blog sets out some of these strategies. How much debt is safe to take into retirement? You must...
You can’t earn your way to financial freedom
August 01, 2019 00:00 - 16 minutes - 15.3 MBI have written about cash flow management a couple of times previously (here and here) because it is the most important thing to master in order to build wealth. It is also the reason that most people fail to build wealth. In fact, I have never met a wealthy person that doesn’t have good cash flow management. That is not to say they don’t spend money on luxury items. They only spend on luxury items that matter to them. The purpose of this blog is to show you how to master cash flow manageme...
You can't earn your way to financial freedom
August 01, 2019 00:00 - 16 minutes - 11.5 MBI have written about cash flow management a couple of times previously (here and here) because it is the most important thing to master in order to build wealth. It is also the reason that most people fail to build wealth. In fact, I have never met a wealthy person that doesn’t have good cash flow management. That is not to say they don’t spend money on luxury items. They only spend on luxury items that matter to them. The purpose of this blog is to show you how to master cash flow manageme...
Making the most of a recovering property market
July 24, 2019 23:55 - 19 minutes - 13.7 MBTo watch the full presentation, go to https://www.prosolution.com.au/recovering-property-market/ 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...
Borrowing capacity has increased – but by how much?
July 17, 2019 00:00 - 13 minutes - 12.7 MBTwo weeks ago, APRA told the banks that it no longer expects them to use a benchmark interest rate of 7.25% when testing an applicant’s borrowing capacity. Instead, they must add a buffer of at least 2.50% onto the loan’s interest rate. Given most home loan interest rates are in the 3’s, that could substantially improve your borrowing capacity. The banks are starting to push back on regulators Until now, the banks have remained relatively silent about the government’s crackdown on lending ...
Borrowing capacity has increased - but by how much?
July 17, 2019 00:00 - 13 minutes - 9.56 MBTwo weeks ago, APRA told the banks that it no longer expects them to use a benchmark interest rate of 7.25% when testing an applicant’s borrowing capacity. Instead, they must add a buffer of at least 2.50% onto the loan’s interest rate. Given most home loan interest rates are in the 3’s, that could substantially improve your borrowing capacity. The banks are starting to push back on regulators Until now, the banks have remained relatively silent about the government’s crackdown on lending ...
What investment returns can we expect from share markets?
July 09, 2019 00:00 - 17 minutes - 12.4 MBThe Australian and US share markets reached all-time highs at the end of last week. This is great news for superannuation returns and existing share investors. However, where will the markets go from here? When valuations are high, future returns will be low There is a strong negative correlation between the starting valuation multiple (e.g. price-earnings ratio) and an investor’s subsequent 10-year investment returns. That is, if current valuations are high, future returns are likely to b...
Why I reject potential clients... and some important lessons
July 03, 2019 02:00 - 15 minutes - 10.4 MBI say “no” more often than I say “yes”. That is, I decline or defer the opportunity to work with more people than I agree to work with because, ultimately, I think it’s in their best interest. Not everyone is ready for tailored financial advice for lots of reasons as I discuss below. Products are easy to sell, tailored advice is not It’s very easy to buy a financial advice ‘product’ such as a property investment plan. But it’s much harder to buy tailored advice. A product has a clear deliv...
Why I reject potential clients… and some important lessons
July 03, 2019 02:00 - 15 minutes - 13.8 MBI say “no” more often than I say “yes”. That is, I decline or defer the opportunity to work with more people than I agree to work with because, ultimately, I think it’s in their best interest. Not everyone is ready for tailored financial advice for lots of reasons as I discuss below. Products are easy to sell, tailored advice is not It’s very easy to buy a financial advice ‘product’ such as a property investment plan. But it’s much harder to buy tailored advice. A product has a clear deliv...
Australia’s property challenge could be your investment opportunity
June 25, 2019 23:00 - 12 minutes - 11.3 MBEvery few years The Economist magazine writes a story about how property in Australia is overvalued compared to other countries – or something to that effect. Comparing Australia with other countries is like comparing apples and oranges. Australia is just so different. But this difference creates opportunities for investors that play the long game. Let me explain. Big country and not enough taxpayers I recently spent a few weeks travelling around France. It is so easy to get around. Its ro...
Australia's property challenge could be your investment opportunity
June 25, 2019 23:00 - 12 minutes - 8.53 MBEvery few years The Economist magazine writes a story about how property in Australia is overvalued compared to other countries – or something to that effect. Comparing Australia with other countries is like comparing apples and oranges. Australia is just so different. But this difference creates opportunities for investors that play the long game. Let me explain. Big country and not enough taxpayers I recently spent a few weeks travelling around France. It is so easy to get around. Its ro...
11 important tactics to become 'loan ready' in this tight credit market
June 19, 2019 02:32 - 17 minutes - 12 MBOver the past two years, I have highlighted how tight the credit (mortgage) market has become a couple of times. In the past, borrowing was simple. The bank would always offer you more than you wanted to borrow. You only had to provide a few documents and the money was yours! Things have changed dramatically. These days, banks spend most of their time trying to look for reasons to decline a loan rather than approve it. It’s as if they don’t want the business! The onus is on the borrower to ...
11 important tactics to become ‘loan ready’ in this tight credit market
June 19, 2019 02:32 - 17 minutes - 16 MBOver the past two years, I have highlighted how tight the credit (mortgage) market has become a couple of times. In the past, borrowing was simple. The bank would always offer you more than you wanted to borrow. You only had to provide a few documents and the money was yours! Things have changed dramatically. These days, banks spend most of their time trying to look for reasons to decline a loan rather than approve it. It’s as if they don’t want the business! The onus is on the borrower to ...
What should you do about Labor's proposed tax policies?
May 16, 2019 00:00 - 20 minutes - 14.1 MBLast week Jarrod McCabe and I recorded a presentation about the ALP's proposed changes to tax laws that impact investors. You can watch it here: https://www.prosolution.com.au/webinar-negative-gearing-replay/ In this week's podcast, I summaries answers to 5 questions we addresses: What is the impact on investors (in dollar terms)? What impact will these changes have on the property market - prior to 1 Jan and after? Is there anything existing property investors should do now? Will ...
Changes to capital gains tax are 5 times more costly than negative gearing
May 09, 2019 00:00 - 14 minutes - 9.77 MBThe ALP’s proposed ban on negative gearing has been well publicised and debated. However, its proposed changes to Capital Gains Tax (CGT) have received far less attention. I suspect that this is because investors tend to overestimate short-term consequences and underestimate more significant long-term outcomes. But, since most of us are long-term investors, I’d suggest that we should adopt a more balanced view. How does capital gain tax currently work? At the moment, only 50% of the net ca...
The importance of receiving advice without boarders
May 02, 2019 00:24 - 12 minutes - 8.59 MBDifferent professionals are able to give advice about a specific field – but who’s taking responsibility for looking at the big picture? How do you know if opportunities are slipping between the gaps? What if you have an issue/problem/question that bleeds over a few different fields? Firstly, it is important to understand the what different professionals can and cannot talk about (by law). Mortgage advice To give advice about a mortgage, borrowing capacity, interest rates, products and so...
Commonly missed investment property tax deductions
April 26, 2019 02:28 - 7 minutes - 5.23 MBAn investment property should be selected based on the likelihood of it generating strong capital growth rather than secondary benefits such as rental yield or negative gearing. However, saying that, this doesn’t mean we shouldn’t maximise the gearing benefits of your current or future investment property to save on tax! So, if you’re looking to purchase an investment property or currently have one, these are some commonly missed methods/deductions that will help you get the most from your i...
Understanding property growth, markets and being strategic
April 18, 2019 03:59 - 26 minutes - 18.2 MBUnderstanding how property growth behaves is critical when making buy, hold or sell investment decisions. Unfortunately, I have seen lots of people make terrible decisions based on misinformation or misunderstanding. Therefore, if you are a property investor, you must understand this concept. And if you are an investor with a low asset base, you can use this knowledge to your advantage. History always leaves clues I’m a big proponent of evidence-based investing because it removes a lot of ...
This is your biggest Achilles heel... and two ways how to avoid it
April 11, 2019 00:00 - 13 minutes - 8.97 MB“First rule of business is never get emotional about stock, clouds the judgment.” Gordon Gekko, from the movie Wall Street The quote above is from the fictional character, Gordon Gekko from the legendary 1987 movie, Wall Street. The challenge he was alluding to is the fact that it’s impossible to have a completely impartial lens when making financial decisions. There are many reasons for this. Firstly, it’s our money, we worked hard for it and we don’t want to make a mistake and lose it...
This is your biggest Achilles heel… and two ways how to avoid it
April 11, 2019 00:00 - 13 minutes - 11.9 MB“First rule of business is never get emotional about stock, clouds the judgment.” Gordon Gekko, from the movie Wall Street The quote above is from the fictional character, Gordon Gekko from the legendary 1987 movie, Wall Street. The challenge he was alluding to is the fact that it’s impossible to have a completely impartial lens when making financial decisions. There are many reasons for this. Firstly, it’s our money, we worked hard for it and we don’t want to make a mistake and lose it...
5 things you can do to prepare for the negative gearing ban (and should you invest before 2020?)
April 03, 2019 00:00 - 17 minutes - 11.9 MBThe ALP announced on Friday (29/3/19) that it will ban negative gearing from 1 January 2020 if it wins the election next month. I wrote an article for The Australian newspaper over the weekend which addresses the steps property investors can take to fortify their investments (which I list below). A number of people have asked me whether they should invest in property prior to 1 January 2020. I discuss this too. We still have a long way to go Of course, the ALP has to win the election befor...
The importance of becoming more professional with your approach to investing
March 27, 2019 22:30 - 14 minutes - 9.72 MBI’m a huge fan of Seth Godin’s work. He’s a presenter, author and entrepreneur and if you have any interest in marketing or business, you must subscribe to his daily blog. Anyway, his recent blog about the difference between an amateur and professional got me thinking. I think many of us could benefit from approaching our finances more professionally. The different between a professional and amateur Often, a professional investor such as a fund manager approaches investing a lot differentl...
Where are interest rates heading and what should you do?
March 20, 2019 23:00 - 12 minutes - 8.83 MBFor many Australian’s, their home loan is their largest expense. And property investors should seek to minimise their borrowing costs (interest) as it’s one of the top three factors that directly impacts investment success as outlined in this blog. With this in mind, I thought it was timely to look at the current opportunities in the mortgage/interest rate market. What the “market” is expecting As the chart below illustrates, the implied yield on 30-day cash rate futures suggests that the ...
Who’s going to manage your family’s finances when you’re gone?
March 12, 2019 23:08 - 15 minutes - 14 MBA client was telling me a story about how the Chief Financial Officer (CFO) of a business he used to own passed away unexpectantly. Of course, it was a very sad event both personally and professionally. But an unexpected additional consequence was that the business was locked out of internet banking. The CFO had many important passwords committed to memory (for security). The business had to pay staff the week following his death without any access to banking! This taught my client a very im...