Finance & Fury Podcast

Welcome to Finance and Fury, the Say What Wednesday Edition Today's question comes from Octav Hi Louie, My question is how the universities are functioning in Australia, especially the one that are governmental managed. How do they make the advertisement for casual and part time positions available? From my experience, the positions are given to students and acquaintances without a selection process. Today we will talk about universities in Australia An overview The nepotism Overview: 43 universities in Australia The department of education has the responsibility for administering funding and policy A hybrid model with funding from government and tuition fees The universities adhere to government rules and regulations Funding comes from commonwealth schemes, scholarships, and grants. HECS/HELP debt covers 2.2 million Australian's debt at around $40.2 billion in total Takes an average of 8.8 years to pay off Uni is set to become more expensive as the government starts covering less of the cost upfront How well are they functioning? Rankings in the top 100 Uni's in the world Quality of education (30%) – comes down to alumni and staff winning prizes Quality of faculty (40%) – highly cited researchers and papers published Research output (20%) – papers indexed Per capita performance academically (10%) of an institution Australian Uni rankings 7 in the top 100 What other methods show the functioning of a university? Any focus on preparing people for the real world? Last year 73% of people found a job after graduating and 27% are still looking Pharmacy graduates had the highest change of employment Creative arts graduates only 52% were in full time employment after graduating Science and mathematics graduates had 64% employment 4 months after graduating Only 57% of graduates who were employed full time after graduating believe their qualification was important for their current employment Only 39% of undergraduates in fulltime and part time jobs reported that their skills and education were not fully utilised And they have HECS debt to repay The degree should improve your employment prospects Look at a career with a wide range of job prospects I was interested in Another important factor is about building resilience Makes it hard to educate on topics if people get offended Are universities functioning well based on how much it will cost you? Previous episode link here on the political tool used to get votes and should you go to university What is the incentive for universities to keep their prices low? Second part of Casual and part time employment Internally hire through the ranks Universities don't hire many casual or part time workers, 70% are full time Thanks for the question, if you want to get in touch you can do so here. Resources: https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/FlagPost/2018/May/HELP-debt-statistics

Welcome to Finance and Fury There is a saying that goes hoping for the best but planning for the worst. With the election around the corner, for those wanting to make it for themselves and create financial security may be in for a bit of a shake up Today I want to recap proposed policies, breakdown of the economy and strategies to avoid pitfalls from election results. Recap of policies: Minimum wages and penalty rates reintroduction has an impact on small business sector Taxes has one of the biggest effects Income tax – more tax from the average income tax payer Capital gains – reducing the discount to 25% from 50% impacts risk/return ratio for those investing in capital growth investments Negative gearing – only on new properties impacts investing decisions Family trusts – higher tax on distributions at minimum of 30% rather than the beneficiaries marginal tax rate Franking credits – still in place, but the rebates will go. This still helps to offset tax, but lower incomes for self-funded retirees State of the economy Retail and hospitality – restoring penalty rates will force small business to cut staff or go out of business Australian Retail Association – competing with online retailers means lower profit margins Higher wages – leads to costs of running a business and administration bankruptcy Why you see surcharges on holidays or reduced hours Retailers and hospitality going out of business, retail employs 10% and hospitality 8% of the working population Business – they just want stability Frequent PM changes are bad for consumer spending and confidence Fears of looming uncertainty increase the longing for political continuity and stability Market Focus showed 77% of small businesses expect to be adversely affected by the results of the federal election What do you do if you think something bad will occur? Taxpayers – Bill Shorten uses "top end of town" to defend additional tax on income earners, investors and self-funded retirees 10% of taxpayers to pay $32 billion more 400,000 voters earning more than $180,000 a year Policy suite will hit medium to high income earners Individuals – reversing $285 billion in tax cuts proposed by the Morrison government will deliver $13.6 billion extra revenue by 2022 1 million workers earning more than $120,000 paying 45% of Australia's tax Earners of more than $90,000 a year MTR 5% higher by 2022 This group accounts for 88% of net income paid already and 52% of Australians don't pay any net tax Inequality won't change – Gini index – Labor's is 0.36, and Coalition is 0.37 5% of taxpayers will pay 30% on superannuation contributions rather than 15% like the rest of Australia Family trusts – tax on distributions goes to 30% is the next part of Labor's plans to redistribute wealth ABS says 93.2% of the value of trusts is held by the wealthiest 20% of households Holding wealth isn't the only thing Family trusts are used for 1 million family trusts in Australian, 250,000 small businesses operate using trusts Used to distribute income to beneficiaries and asset protection What about big business? They will make up 5% of the extra tax from $32 billion of increased tax over 4 years Small businesses will feel the squeeze further, impossible to compete with higher wages and higher tax Plus additional regulation costs, $25k of licensing costs is a lot for small business The issues: Low growth economy leads to an underperforming share market People's perception has a lot to do with marker performance RBA slashed its forecasts for economic growth as subdued household income and real estate price corrections Weakening household consumption is a key risk to the economy RBA slashes the GDP growth forecast for the year to June to 1.7% from 3.25% just 6 months ago Our exports are mostly owned by foreign companies, so it doesn't help the economy very much Lower disposable incomes for a few million Australians Household consumption is forecasted to grow at nearly 2% this year, and it represents nearly 60% of the economy Investment in building new homes is expected to be down 6.7% this year, and construction accounts for nearly 10% of jobs. It is expected to create more job losses. Where to invest? Salary sacrifice becomes more attractive if taxes increase and investing for the future Can bolster your retirement savings, save more in tax on investments too You won't be able to access funds until the preservation age of 60 An investment strategy can be passive and are long term holds Risk reward will go down but doesn't matter if less than 12 months Midterm sell strategies may not be worth it Unit trusts may be an option to replace family trusts but aren't an exact replacement Still provides asset protection and won't attract the same 30% minimum tax Won't have the flexibility of distributions as units are fixed to members Types of Assets This is all speculative International shares and looking for growing markets Countries like Indonesia, India, China, Thailand USA country direction, the l

Welcome to Finance and Fury, the Furious Friday edition This is a continuation from this week's Say What Wednesday episode, in part one on Who to vote for? Check it out here. Part 1: Political culture Tribalism 3 main parties policies and promises Today: How to tell the difference between promises and policies? Break down how votes tend to end up with 2 parties How to tell a promise from a policy? Every promise focuses only on the outcome Look at if the policy proposal is stating an outcome versus how it will be done Example: "Uni should be free" – how is this achieved? The breakdown is the difference between dialectic and rhetoric Rhetoric - language designed to have a persuasive or impressive effect, but which is often regarded as lacking in sincerity or meaningful content. Dialectic - discourse between two or more people holding different points of view about a subject but wishing to establish the truth through reasoned arguments – but truth requires facts/information Social media and the spread of disinformation makes rhetorical very powerful Look at the Russian collusion of the election in the US Scott Morison targeted by social media accounts affiliated with the Chinese Communist Party Comedy is used as a subversive tactic Subversive tactics are used to pass policies with positive rights: Previous episode on positive rights Negative rights make it illegal to do something to you, positive rights make it legal to force you to do something Healthcare as an example: Nobody can stop you from seeking medical treatment vs medical treatment is covered by the taxpayers. Someone is forced to pay for it, falling into the positive right territory. Rhetorical statements get used in regards to something being free or human rights Labor website Liberal website One relies on policies and the other relies on rhetorical statements The how or focus to achieve an outcome is very important What are the polls saying? Polling in Australia is more accurate, as it is compulsory to vote Current polls suggest Labor will win, but now not so much But what about the Primary Vote? Why can a party with more votes end up losing? Preferential voting: Does your vote count? What you think about your vote is important The number of formal votes a party needs is 50% + 2 systems of preferential voting House of representatives – box with a number in order of preference Senate – above the line and below the line voting Above the line: preference a party Below the line: number all individual candidates How does preferential voting work? The full distribution of preferences is used to calculate the two-party-preferred statistics Your vote isn't wasted How do we vote for our PM? We don't, we vote for a member of a party and they chose the PM Summary: Break down of messaging used in campaigns Evoking emotional responses versus focusing on outcomes Every vote is important and does actually count Thanks for listening, if you have any questions you can ask them here.

Welcome to Finance and Fury, the Say What Wednesday edition Had a few questions recently which is topical. Mostly from friends and family. They know I take interest in politics and policy, and asked me "Who should I vote for?" Can't tell you that, nor I did them Today: Discuss 2 things to help make an informed decision Policy, what each party proposes and where they stand on the political and economic spectrum Next week: Where your vote is going with preferences Our political culture: Us vs Them mentality Voting tribalism Creates a dangerous element in any organisation Hate and violence towards the other Personal disclaimer: whoever provides more freedom in their policies Cost benefit and Pros and Cons Parties: 3 main parties: ALP, LNP and The Greens Most people are voting for 1 or 2 main issues For Labor voters, the environment was the top issue (40 percent), followed by the economy and health care (each 11 percent). For Coalition voters, the economy was the top issue (44 percent), followed by the environment and superannuation (each 10 percent). Among Greens voters, not surprisingly, the environment was overwhelmingly the major issue (63 percent) Run through each parties stance on the major issues and next episode we will go through healthcare and some minor issues Tax: Coalition – 10 year income tax cut package immediately doubling the low and middle-income tax offset - benefit 10m taxpayers raise the threshold for the 19% tax rate from $41,000 to $45,000 in July 2022; flatten tax brackets so everyone earning between $40,000 to $200,000 pays a marginal rate of 30% from 2024. No changes to negative gearing, capital gains tax or Franking Credit rebates Labor – tax cuts for people earning less than $48,000 Abolish negative gearing for existing properties Halve the capital gains tax discount and end the franking credit rebate – grandfathered for Age pension and existing investments Greens – Support Coalition low-income tax offsets, but block everything else Make Deficit Levy permanent, Remove all negative gearing and capital gains tax concessions Remove fossil fuel subsidies to raise approximately $21bn, increase Company tax rate back to 30% Climate Change: Coalition - reduce emissions and ensuring grid stability in the electricity sector - the national energy guarantee $2bn "climate solutions fund" to reduce emissions, with funding to be rolled out over 15 years Look at subsidising the mining and coal industry – based around an emissions study Labor - propose to regulate the electricity sector - set a higher emissions reduction target of 45%, beef up regulations to drive more rapid emissions reduction – but if these don't pass plan B - $10bn for Clean Energy Finance Corporation - $5bn fund to modernise aging transmission infrastructure to retire coal stations over time. Introduce vehicle emissions standards - 105g of CO2/km - imposed on car retailers (not manufacturers) Wish to review a carbon emission tax – reduced scope compared to the 2013 tax Greens - proposing a carbon price (tax) – shut down coal exports by 2030 along with coal power create a new public authority, Renew Australia - a new government-owned energy retailer ban on new internal combustion vehicles by 2030 – lower EV tax, but raise Luxury taxes on fossil fuel cars $0 funding if fossil fuel cars are no longer allowed to be sold Industrial Relations and Economy Coalition - Stop employees who were misclassified as casuals from being back-paid entitlements, preventing them "double-dipping" and accessing both the casual loading and entitlements of permanent workers. Create a right for casual workers to request permanent full-time or part-time work Give the Federal Court power to deregister unions or disqualify officials for repeated or serious breaches of law and introduce a public interest test for union amalgamations Prevent enterprise agreements mandating which fund to pay workers' superannuation into Labor - Change the rules the Fair Work Commission uses to set the minimum wage, reverse Sunday and public penalty rate cuts for retail and hospitality workers and prevent labour hire setting their own wages Introduce a new gender pay equity objective and lower the bar for making an equal pay order to boost women's pay Amend laws to "improve access to collective bargaining, including where appropriate through multi-employer collective bargaining" Abolish specialist union regulators, the Registered Organisations Commission and the Australian Building and Construction Commission Greens - Legislate a minimum wage of "at least 60% of the adult median wage" Change the Fair Work Act so workers are free to bargain "at whatever level they consider appropriate and with whoever has real control over their work, whether at a workplace, industry or other levels" – increasing unions scopes massively Will it work? It is impossible to answer Voting is based on rhetorical over dialectic Tax - Lower taxes vs the government having money to spend Climate – Slow and

Welcome to Finance and Fury Have you ever thought about What would you do if you won the lotto? What would you do with it? This depends on many things: the size, type of lifestyle, and how much you value money now. Today: Talk about how winners end up with no money The tricks and psychology used to make people buy tickets Who plays the lotto? 11 million participate in gambling 6 million have bought a lotto ticket or scratchie 1 million spend more than 10% of their annual earnings gambling What happens when you win the lotto? It can turn out well or not It takes time to learn about money beyond how to spend it You hear many famous cases of how winners lose their winnings These are great cautionary tales How should you spend it Why doesn't everyone do this? Value – not worked for and there is a lot of it. It depends on mind frames. Not planned for – it is a lot of money in one go, it's an oversupply or marginal utility. Knowing yourself with money, having self-control and knowing the value of it There is a difference between dreaming and planning This is how the lotto gets marketed How to value every dollar? Everything has an expected return What is an extrinsic value? We can calculate the expected return of lotto Lotto makes money from keeping people focused on the short term The losses are long term What if you looked at investing that $60 each week? 10y - $47,743 - $31,200 of own money - $16,542 growth - 53% gain 20y - $153,931 - $64,400 of own money - $91,531 growth - 147% gain 30y - $390,112 - $93,600 of own money - $296,512 growth - 317% gain Why isn't this popular? Investing is too long of a time frame How does dopamine change things? What is the expected value for investing? How do you get the same feeling of the payoff from long term investing? This is about generating your own wealth where the odds are in your favour What would you do once you win the lotto? Thanks for listening, if you want to get in contact you can do so here.

Welcome to Finance and Fury, The Furious Friday edition Today We will go through how the share market changes with economic theory, particularly the theory of Milton Friedman in regards to shareholder value and certain volatility The share market behaviour changes as the thoughts of investors change It is based around Game Theory To start: What is the predominant thought of today The returns of a company drive demand, people want shares that are doing well Quarterly reports have a short term focus This can take priority over long term health What is the fiduciary duty of directors? Where does this view come from? Who is Milton Friedman 1962 collection of essays "Capitalism and Freedom" "there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition, without deception or fraud." Prices can respond quicker with information being readily available How does this all work? Projected versus actual financial reporting Value is not price, it is what people think the price should be Technically pursuing short term value should maximise long term value Sometimes short-term gains come at a loss of long-term potential What is another view of economic good? Public companies are always exposed to short term investors or speculators who have a clear goal Slight misallocation started to occur The drive for CEO's to be held accountable with shares as payment, came with an incentive to manipulate share prices This is the sort of market we have to work with Companies with good managers is the number one measurement Long term performances One of the most important parts Don't panic sell If the company is good, it should recover long term Selling the shares just crystalises the loss Slow and steady wins the race Next best things "in fashion shares" When to get out? Buy and hold well managed companies I looked at the difference between large cap and small cap active managers I outsourced the guessing to people who do this professionally Thanks for listening, if you want to get in contact you can do so here.

Welcome to Finance and Fury, The Say What Wednesday Edition Today's question came from Matt and Lucas Labor's plan for 50% of new cars to be electric by 2030 plus introduce a carbon emissions target for new cars. The Greens have one-upped this. Today we break down the EV market Why they are doing it? Talk about the platitudes and promises What it will cost? Why are they doing it? Paris agreement to reduce CO2 emissions by 46% per person Australia has a growing demand for fuel Most Australians travel to work via car We don't have the greatest public transport What is EV range anxiety? How much are EVs? Other countries are banning petrol cars What are the charge times for these vehicles? How well do these cars work? Transport takes up 18% of greenhouse gas pollution in Australia Where does electricity in Australia come from? How much CO2 is emitted? How much do these electric cars cost? How will this be done? Labor's plan was making car dealers responsible for this The majority of cars produce more than 105g of CO2 per kilometer What are the savings? $200 million investment across Australia How is this going to reduce the sales of petrol cars? Potential pitfalls? Introducing a new tax on road usage Additional burden on the power grid What is the additional cost to Australians for these EVs? How much will solar panels help? Take a step back: Naturally, EVs will predictably make up about 50% of car sales in 2030 anyways It is an easy election promise to fulfil On Monday's episode we went through promises versus policy Never thought I'd say this: Bill Shorten is right about making Australia a manufacturing country again But he has contradictory policies We aren't competitive because of Lima accords What happened with XXXX? What are the massive taxes on alcohol? I think going towards clean energy production is important I think they are focusing on the worst forms of technology Why don't we use nuclear? The fears around nuclear are greatly exaggerated Might help to lower emissions: Only wealthy people can afford EVs Will they be subsidized by the poor? How will lower income earners afford EVs? Summary: Great idea, won't be good in practice Just another government policy to increase control on your life I wish we were done with this topic We already mine uranium and thorium for other countries I don't see protests for the lithium mines Thank for listening, if you want to get in contact you can do so here.

Welcome to Finance and Fury The election has been set for the 18th of May The marketing has been coming in and it has been pretty forward with the smear campaigns It seems like a lot of it preys off people not understanding how the economy works, and there is nothing wrong with this as it is a complicated topic. But its abhorrent that its used to win votes, without providing policy on how a party will run things. Today See through the political messaging used The messages used The tactics used An election promise is not a policy There are 2 sides to every policy 'those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety' Under governmental policy, it is a trade off Liberty is the state of being free within society from oppressive restrictions imposed by authority on one's way of life, behaviour, or political views Safety is a state where you are not in danger or risk We have a relative safety measure, economic, terrorism, climate change etc. You need to give up liberty. For example, climate change = additional taxes, restrictions on choice of power What were the TSA introduced for? DHS found a 95% failure rate in detecting weapons or explosives in their undercover operations In Australia, we had the Gun buyback laws in 1996 after the massacre at Port Author There was already a downward trend in gun-related deaths before these laws But what about deaths overall, were they decreased? Is society becoming less violent overall? What isn't mentioned is armed robberies increasing Policies don't seem to be needed Is there a political message here to make you just feel unsafe? Fearing something evokes a stronger emotional emotion than gaining something. Called loss aversion The political message gets you to operate out of fear Each side of politics has a starting point: On the left side – the starting point is that things are unfair and a vote for us gets a solution to the problem On the right side – the starting point is that things are good and not to give it up, a vote for us avoids a problem So what has changed? Our perception of how good we have it? What do you want in life? What about your neighbour? What about some random 3 blocks away? Why do you want to increase freedoms? What does it do for the country? Mao's great leap forward and the enemy within If you think that you are doomed to begin with, would you ever even try bothering? Can the problems in Australia really be solved with 1 vote? How is our health care? The message of a fair go? Democracy is two wolves voting to eat the sheep A lot of this caters to envy and greed another power emotion next to fear Summary: A major issue for politics today Not a win for the country, but a win for the party Watch out for any government policies that rely on you giving up your liberty for promises of more How they will make it easier for my efforts to work? It is better for you to choose your own path Thank you for listening. If you want to get in contact you can do so here.

Welcome to Finance and Fury the Furious Friday Edition On the last episode we talked about the City of London Corporation, a mini plutocracy Today we are exploring at what point does a financial sector state to crowd out real economic growth? Referred to as the 'financial curse' I have found some contradictions to my previous beliefs – research shows a tipping point Why is finance important? We all use it Each economy has stages with a financial system Reaches an optimal size Beyond this point a financial system starts to inflict damage Profitable techniques start to impact the creation of wealth There is a limit to useful roles of a financial system The Tipping Point: Financial crisis Supporting the creation of wealth vs extracting it from other parts of the economy Shaping laws, rules, thinktanks and culture The damage it does Measurable impact: link to database Finance becomes a net drag on GDP growth and productivity – misallocation of resources Negative relationships between rate of financial sector growth and rate of productivity growth Bank incentives shift after GDP to debt reaches a certain size What do credit booms do? The ratio of household debt reflects what? What does the IMF study show? Real life examples: Britain and the City of London corporation What kind of hit has it put on the UK economy? Lost economic output and misallocation costs No longer lending into new business, mostly each other, housing and commercial real estate USA The cost of the 2008 financial crisis Australia Credit to the private sector surpassing 100% of GDP makes financial sector contribution to economic growth negative When interest rates are lower there is less incentive to save and more incentive to borrow The Unmeasurable Finance curse inflict damage in many areas Economic, cultural, democratic and social effects Summary: With too little and too much financial sector, we would be doomed Resources are being misallocated How some investments come at the expense of other investments I own? Next week we will dive deeper into the share market and Milton Freedman Thank you for listening, if you want to get in contact you can do so here.

Welcome to Finance and Fury, the Say What Wednesday Edition Today's question from Zed "I recently noticed that Australia seems to be opening lots of lithium mines as the demand for Electric Vehicles rises and we turn away from oil. Is Australia at risk of their lithium mines being undercut by competition from South America in the near to medium future?" Today: Demand for Lithium Who is providing it? What is Lithium? Alkali metal Used in rechargeable batteries The supply is increasing Where Lithium comes from? Lithium from brine (70%) It can take over a year to extract the Lithium through evaporation Lithium from hard rock (30%) Hard rock drilling and extraction through traditional methods Lithium can potentially be recycled Who are the producers? Bolivia, Argentina, Brazil, and Chile South America produces a lot of the Lithium Australia holds more than 2.7 million MT of identified lithium reserves Chinese companies own more than half of the world's production What are the Issues? Oversupply dropping prices Australia has a low cost of production Perhaps there is lithium hoarding happening? Long-term issue is the alternatives to lithium-ion batteries The Ryden dual carbon battery, sand battery, and sodium ion battery Looking to invest in companies in this space: They lack the circle of competence Price takers rather than price makers Lithium miners have dropped by 50% in prices A look at 3 ASX companies – Pilbara minerals, Galaxy Resources, and Orocobre Limited Price is based around fair values Summary: Australian mining of Lithium isn't in too much risk from South America Long-term risk for Lithium is the global demand dropping from alternatives Very speculative – prices determined from supply and demand If you want to get in contact you can do so here at the contact page.

Welcome to Finance and Fury Everyone has heard of more money, more problems – it is a bit of a contradictory statement It is false as money can cover bills and be used in emergencies It is true as not valuing money can lead to problems How to value money? What is conspicuous consumption? Why does this occur? The display of economic power is a means of their social status What is Affluenza? What did Oliver James say? What does it matter if someone has more stuff than you? Seeing wealthy individuals online can help contribute to the affluenza problem Where it comes from? Marketing triggers your spending habits What does wealth really look like? Societies can remove the negative consumerist effects Price versus value What leads to overconsumption? What creates a society of individualistic consumers? What are downshifting spending habits? The realignment of spending priorities Identify the need for an alternative political philosophy What are the long-term effects of downshifting? What are the elements that help? Regaining control of your finances What is the endowment effect? Putting a premium on your spending habits helps you to downshift What is the opportunity cost of parting with your money? Start by looking at timeframes: Short, medium and long term What can you do right now? Get disciplined, pay yourself first (check out the calculator), the hard truth How stressful would it be to get to 65 years old and not have enough to retire? If you planned ahead, these stresses could have been avoided Summary: Know that most of what you see on social media is a lie Don't try to live up to anyone else Know the value versus the price Thank you for listening, if you want to get in contact you can do so here

Welcome to Finance and Fury, the Furious Friday edition Today we will talk about democracy never really existing in The City of London We are continuing on with the series of Brexit – nothing really new to report as the vote has been pushed back until October The first episode was on the neo-cons The second episode was on Brexit Today will be a combination of those 2 episodes – subverting democracy and economies The City of London: Government is The City of London Corporation It is not the greater London region, it is the major financial services district of the UK It is technically not a part of England The city has it's own police force They have their own power grid The History of The City of London It dates back to the Romans They have operated in the same manner since Medieval times – enshrined the Magna Carta's clause 9 – 1215 The companies get votes here – an example of a plutocracy There are 4 layers of elected representatives What are the livery companies? Who is the remembrancer? This has made regulation of global finance nearly impossible This leads back to Brexit The corporation possesses a large pool of cash What is the Lord Mayor's role? Extensive partnership work with who? Protest groups in the great UK are funded by who? Intellectual property and tax erosion practices There are conduit OFC's and sink OFCs (Offshore financial centres) Multi-national companies do not care about increased regulation What do you think? Who benefits from being a part of the EU? What is the growing trend of first world economies? We will finish this off in the next episode When the financial sector turns away from supporting the creation of wealth we are doomed to repeat past mistakes Thank you for listening, if you want o get in contact you can do so here.

Welcome to Finance and Fury, The Say What Wednesday edition Today is a special episode – we have another resource page excel tool Question from Nick "I'm sure as a Financial Advisor you are quite aware of the Financially Independent Retire Early concept, but I want to ask this question as it may be applicable to a lot of younger listeners. I wonder how achievable is a FIRE lifestyle? And what other investments exist for long term growth with high yields?" We will go through both parts: Investments to use Working out how much you will need Start: FIRE: Financial Independence Retire Early I believe that it is achievable – but how committed is the individual? You probably won't have access to Superannuation so there is a 2 prong strategy You'd need to accumulate funds personally Types of Investments: The way I would do it ETFS, Managed Funds, and LICS Steer clear of Large Cap active managers What to do with property? What is the problem with property? Low transaction costs Why investing beats savings with the FIRE strategy? Getting income from your investments I tend to aim for investments that pay around 5% income yields and have high growth potential How much to save? I have built a calculator in excel It is similar to Goals Workbook How much monthly investments you will need to make to generate the passive income How to use it? Enter in the passive income level you are after (in today's dollars) The number of years you have to achieve this by The current level of investments you have (excluding super as that won't be accessible by 60) and The income yield Total returns you are after Gives a rough idea about the amount needed to invest every month What is important to you? What do you need to cut spending on? You must use the calculator reasonably Enjoy your life with great experiences Summary: If you are subscribed, you will get it emailed to you If you not, visit the resource page linked here Work out the investments you will choose How much will you need to cut on spending to make this strategy work? Thank you for listening today, if you want to get in touch you can do so here.

Welcome to Finance and Fury Today we are going to talk about relationships and money, and some strategies to start working as a financial powerhouse couple We all spend money and we all have relationships Doesn't mean romantic relationships How has your relationship with money been developed? Did your parents talk about money around you? A lot of your foundations are through things you picked up as a kid Did you notice your parents ever fight about money? Based on what you observed you might try and avoid conflict about money What I was exposed to made a huge difference in my development It initially was uncomfortable talking to others about money, but with time you get used to it Relationships & Money 101 Compatibility helps a lot. Some similar goals and visions. As a couple, you are meant to be greater than the sum of its parts That means something bigger/better than you would expect from the individual parts Think about a relationship in terms of an equation 1 + 1 = 3 If you have 2 people leading towards the same goals, you get a much better return. Your finances allow you to live a certain lifestyle What happens if you have differing values? First step: Work out your own personal inventory and your values Get to know yourself a little better and use one of our workbooks Look at your financial habits and how they are impacted in a relationship Is there anything influencing your behaviour? What is my personal experience? Getting on the same page – What you can do? Have you had a meaningful chat with your partner about money? Talked about spending habits, savings habits and shared goals? It needs to be a pretty focused chat around your goals What gets in the way? If uncomfortable, you might find it's not as bad as you thought Important to get all the baggage out of the way at the start Create a list of shared financial goals Accountability buddy - Helping each other keep on track of these goals The most important part: Talking about money with your partner Delaying this will do you no favours Relationships alone are a significant investment The more you invest, the better the relationship gets Are you both working towards your end financial goals? Thanks for listening. If you liked it let us know with a rating or tell us over on the contact page.

Welcome to Finance and Fury, the Furious Friday edition. Today we are discussing what is happening with Brexit? At the time of the release of this episode, we will be approaching the 11th hour of the 2nd deadline to negotiate a deal for the UK to leave the EU. Why would it be grim and awful as they put it? Today: Want to give a timeline of events Look at the massive tax scheme that is going on Check out the series on the EU – What happens if the EU collapses? and Will the EU fall apart? Start at the beginning: The referendum to leave the EU 23rd June 2016 Between then and March of 2017 it was business as usual, and then the UK served their withdrawal notice Invoked article 50 of the Treaty on European Union which sets out a 2 year plan to leave the EU That negotiation period expires on the 12th of April 2019 The leaving agreement must set out arrangements for withdrawal The agreement must then go through a few bureaucratic systems So what is behind all the mess? UK conservative party lead by Terresa May They established the department for International Trade (DIT) There has been a lot of back and forth between the UK and the EU The UK is being made an example of 2 years down the track, where are we now? The EU has been the better negotiators even though the UK is in the position of power The contents of this agreement are only that it sets up a transitional period of further deliberation to be in the EU until December 31st, 2020 This is essentially the UK still being apart of the EU but without a vote How has the deal been going in UK parliament? Failure to negotiate: Article 50 provides for a negotiated withdrawal If there is no deal, The EU treaties cease to apply The EU technically can't block them from leaving If there is no agreement, then trade falls back onto the world trade organization rules on tariffs and trade The EU operates similarly to a cartel What is Gibraltar? The financial sector seems to benefit more from being a part of the EU Why is it so beneficial for Financial services to be a part of the EU? The UK is now ranked the 2nd largest global conduit for corporate tax haven policies Summary of the racket: Firms will set up a letterbox office in the City of London Then there will be subsidiaries in other EU countries One charges the other for intellectual property, and you essentially write off profits You have other countries wanting to do trade deals with the UK, without going through the EU Next Friday: Finish off the series How the tax racket works Who is behind the "grass roots" remain protest organisations Thank you for listening, if you want to get into contact you can do so here.

Welcome to Finance and Fury, the Say What Wednesday Edition This week's question comes from John. Hey Louis, Really enjoying your latest episodes, thanks again for the great content. I saw recently there was a question raised around superannuation reform that TPD insurance within a superfund my now be unnecessary as funding is available under the NDIS for people who are, or become disabled, and therefore might be unethical for super funds to be selling this insurance (assuming it is indeed unnecessary). My question to you is, generally speaking of course, should i be paying for TPD insurance through my superfund, or will I be adequately covered under the NDIS if I suffer an injury that leaves me disabled and unable to work? First off: What is the NDIS? And How is it different to TPD insurance? What are the issues with relying on the NDIS? What is the NDIS? In 2016, the National Disability Insurance Scheme (NDIS) started It is a system to provide support to those with disability It is not replacing a disability support pension It is additional funding to support specific needs or "reasonable necessary supports" There is an eligibility to receive the NDIS support The average individual allocation to date has been around $39,600 per year The payment must not include any day-to-day living cost not related to your disability support needs It should take into account other support payments What is the real issue? You have to reach a level of disability and you only receive funding for costs in relation to that disability It becomes income and asset tested, which will change your disability support pension payments TPD insurance – depending on the definition, pays around your eligibility to work or not Types of TPD insurance link ADL – Feed self, cloth self, mobility, toilet, shower – Probably close to NDIS definitions Any – Any occupation you are trained for Own occupation – Specialised occupation generally If you meet a definition of disability, TPD would be easier to claim on Scenario: Married couple – Both working full-time for $80,000 p.a. each – 2 kids aged 13 & 14 and a mortgage of $550,000 NDIS and DSP DSP - $698.10 FN maximum payment but asset/income tested Reduction after $304 FN by 50c per dollar – Remaining partner earns $80,000 = $3,076FN = $0 DSP Left with NDIS – and it will cover costs of disability TPD and IP (owned personally) You would receive a lump sum payment with TPD to pay off mortgages or cover lump sum costs Income Protection (if owned personally) would pay you up until the benefit period for the whole time you were disabled (which can be nominated on policies up to the age of 65 to 70) IP of $60k (at 75%) – lower but no mortgage now If Income Protection is owned in superannuation however, it wouldn't provide the same double up of benefits This allows you to fully protect your finances and to maintain a certain lifestyle if you were disabled and unable to work The best forms of protection against disability is a combination of TPD cover and Income Protection Covers What is the longevity of the NDIS? Not all Australians considered disable will receive the NDIS This program might become unaffordable for the government The productivity commission has updated its estimates on people helped and the cost Into the future, the program is estimated to cost 1.3% of the GDP in 2044/45 – whereas it currently costs 0.12% of GDP Summary: Probably not the best idea to rely on it You would need to find another form of income to cover living expenses If you want to get in contact, you can do so here.

Welcome to Finance and Fury Today will be a quick update for the upcoming election and policies in response to the budget plans released last week. This election is becoming a battle for votes among salary earners. In the past we have talked about class warfare strategy – it's a tactic being used by both major parties. Breakdown: Where is each party is hanging their hats with incomes and taxes? Liberals announced tax cuts at the last budget last year Frydenberg's affirming even more tax cuts for individuals and businesses, spending on education and infrastructure A reward for effort, aspiration, and enterprise, upholding personal responsibility and providing a helping hand where needed Next generation does not have to pick up the tab for the last generation Liberals are promising other things too like a budget surplus of $7.1bn which is a massive turnaround from 6 years ago when they took office Tax original plan under Liberals: Provide immediate relief by increasing tax offset Protect income earners from bracket creep – wage growth with no threshold increase pushes people into higher tax brackets Abolishing an entire tax bracket – incentivising hard work Doubling the low and middle-income tax offset from 2018 – 19 Structural reform by lowering the marginal tax rate to 30% for earners of $45k to $200k Limit the amount of tax as a share of the economy Being in surplus now means the government can reduce their revenue The previous episode explaining Reagan's approach Someone earning $300k was paying 10 times more tax than someone no $45k What is Shorten's response? Calling the budget radical right wing? Exposing shorten Claiming tax reductions are the same as giveaways. A giveaway to let people keep what they work for? What is Shorten's background and what he represents vs what he has? Morrison summed it up best – why would you work hard under the Labor government? Labor's budget plans: Alternative tax cuts and relief from bracket creep Said that 4.5 million workers earning between $48k and $90k will be better off under their plan, but are yet to release the details. ANU centre for social research has said under Labor there will be an increase in tax revenues of $39 bn over the years until 2024, which is a 5% increase from current revenues Analysts and professors say Labor's plan will modestly lower income inequality but Liberal's plan will modestly increase it because they pay more tax Let's have a look at some statistics FT Employed – 6.7m and PT employed – 3.9m – about 10.6m people 5m people shorten referred to are mainly PT or entry working positions Median Income (middle) for full-time workers - $78,268 p.a. Average Income of FT worker - $90,300 Average earnings of all workers (Pt and FT) - $67,243 What does this mean? The good side Simplified tax codes – this is a good thing Global confidence reaffirming the AAA rating Being on par with taxes in a global economy What is bad? Other bits of regulations, you need less regulation in conjunction with lower taxes to benefit Abhorrent material on platforms tax Encryption laws to get around privacy breaches ISPs banning sites Summary: Some very good things here with tax cuts Tax cuts are good, especially when they benefit low-income taxes Income taxpayers fund the government, so its good to incentivise them to work Thank you for listening today. If you want to get in touch you can do so here. Please don't forget to review us and share us with your friends and family. Resources:

Welcome to Finance and Fury, the Furious Friday edition Today we will be talking about conservatives and why they are not conserving anything anymore. In particular, the new form of conservatives the neo-con conservatives and the noble lie or the big lie. Remember the Occupy Wall St movements? And the population protesting the 1%? Some perspective is you were likely in the world's 1%. The anger should have been directed towards the political systems that facilitated the behaviour that led to the GFC. Wrap up: Neocon Political ideology is framing policy to influence banking GFC initiated by past policies, like the Housing Urban Development Act in 1992 Federal Home Loan Mortgage Corp (Freddie Mac) loans 30% of loans to low income households Glass Steagall episode link Clinton Cash book Why am I talking about all this? Clear up some conceptions, which is the point of Friday episodes When people talk about today's conservative politicians, there is a good chance they are neoconservatives What is conservatism? Political philosophy promotion traditional institutions in the context of culture and civilisation Who was Quinton Hogg? "Conservatism is not so much a philosophy as an attitude, a constant force, performing a timeless function in the development of a free society, and corresponding to a deep and permanent requirement of human nature itself" Conservatives morphed out of classical liberalism Neocon is named appropriately – the new con Trotsky and Stalin's relationship and how communism operated in Russia The bitter infighting between socialists and communists Revolutions in feudal countries lead to capitalism What did Leo Strauss write in regards to Plato and the noble lie Plato turned the mythologies into a class system Introduce the neoconservatives in the 1960s, Irving Kristol the godfather of neoconservatism How does this change conservative values? What are the 2 Major Concerns? The neocapitalist and interventionalist foreign policy Neocapitalism – characterized by correcting the excesses by means of application of measures that guard over social well-being. This is part of the big lie High representation of Keynesian economists around politics What is Irving Kristol take on capitalism? It becomes a state monopoly capitalism – more money in politics means more influence in politics This policy just creates a concentration of companies resulting in monopolies There used to be 50 companies (1960s) that determined the distribution of information, now there are only 6 Interventionalist approach with international policy and war Permanent revolutions and pre-emptive war to achieve desired ends Protection of currency – the petrodollar episode link Occupation of other nations through military might and bases – this opposes neutrality History is a struggle for power: Any political organization the pursuit of power is the priority Principals of the party soon give way to principals of power Social life cannot dispense without organization In terms of representative democracy – how much participation do you have in the laws going into place? What is the totalitarian mill? Only power restrains power It seems like the power dynamic is increasing over time. The representative political system gives the people an illusion of control. This has been an explanation as to why supposed conservatives don't act like it or use supply side economics. We will touch on this again next week when I cover Brexit, where the conservative party keeps pushing the British independence off. If you liked the episode, please review it and share it around. It helps others see it as well. If you want to get in contact you can do so here. Resources: Irving Kristol's Neoconservatism - https://archive.org/stream/IRVINGKRISTOLTHEAMERICANREVOLUTIONASASUCCESSFULREVOLUTION28/Neoconservative%20Persuasion%20S%20e%20l%20e%20c%20t%20e%20d%20%20E%20s%20s%20a%20y%20s%20%2C%20%201%209%204%202%20-%202%200%200%209%20by%20Irving%20Kristol-42_djvu.txt

Welcome to Finance and Fury the Say What Wednesday edition. Today we are continuing on from last week's episode about climate change, so if you haven't heard it, check out last week's episode here. Today I will run through the Paris Climate Agreement, and their proposed solutions. How is policy made? What are second-order effects? An example is capping electricity prices – what's the first consequence? The second? The third? It sounds a bit far-fetched, but it happens a lot when prices are capped The outcome was the opposite of the original intended policy This is what is dangerous about government policy – check out the episode on positive rights here Making changes in a complex system: What you get may be the opposite of what you want What are the aims of the UNFCCC Paris Climate change agreement? Reducing the increase in temperature Link to the UNFCCC Paris Climate Change agreement Lots of bazaar language What is a climate fund? What is the financial target? What is the Green Climate Fund? What are the accredited entities? This sounds innocent, but what is it really doing? Who are in the committees? What is it at the core? How will countries manage their CO2 reduction? What are the solutions for developing nations? There are so many first-order consequences Finance transfers – might lead to more CO2 France is the model country – one of the few developed countries with reliance on renewable energy Why is their electricity price so expensive? Why is there so much civil dispute in France? How are countries going to afford the Paris Climate Agreement? What is greenwashing? What happens with this? Australian Emission reduction target 50% reduction per person This target doesn't penalise heavy polluters What is the impact on the average Australian worker? Solutions shouldn't be to put a financial strain on the population How can thorium reactor technology help? What is cleaner than nuclear power? How does it compare to solar panels? We need more power capacity Thanks for listening. If you want to get in contact you can do so here. Resources: Climate accord - https://unfccc.int/files/meetings/paris_nov_2015/application/pdf/paris_agreement_english_.pdf Workbooks - https://financeandfury.com.au/resources/

Welcome to Finance and Fury Today we have Jayden with us, and we will be talking about Interest rates. The first Tuesday of every month, the RBA releases the updates on the cash rate. The markets currently appear to be going down, and the cash rate reflects a negative trend. The markets show that it will gradually reduce from 1.5% to 1.25% in August and in 2020 down to 1%. Fixed Interest Rates are HUGELY popular right now. And they're only going to become more popular if interest rates continue to go up. The question is: How do you know if fixed rates are for you? Or if now is a good time to fix? Fixed Rate Basics Fixed interest rates (also known as fixed rate home loans) are interest rates that will not change for a period of time, usually between one to five years. Variable rates can move up, and down depending on a range of factors – fixed interest rates remain static, giving you certainty on the repayment of your loan. Why you might Need Fixed Interest Rates Fixed interest rates are a way to reduce the risk of your loan repayments increasing During the fixed rate period your repayment cannot change for the period set for Regardless of the bank, market or RBA interest rate movements. Great for budgeting future payments When Fixed Rates might not suit you The flip side is also true, so if interest rates decrease in the market the lower rate is not passed onto you, but that's just the start. Fixed home loans do come with a few limitations when compared to variable home loans. Australian lenders severely limit how much you can make in additional repayments per year. If you got paid a large bonus, received a tax refund or wanted to make additional repayments over the set ones – you will have to pay a penalty. Penalties – break costs: why would you want to break a loan? Interest rates have come down significantly, sold a property and need to pay back the loan Break Cost = Loan amount prepaid * (Interest Rate Differential) * Remaining Term. $500,000 is fixed for 5 years and then is entirely repaid by the customer with 2.5 years The loan was fixed was 5.50% p.a. - current 2.5-year bank rate 3.50% p.a (2% difference) = $25,000 If you sell the property, you could violate the loan contract and have to pay the break cost Extra repayments limited Depending on the bank or lender, it is possible to pay extra on your fixed rate loan. Amounts – they range from $5-20k p.a. or $30k over the life of the loan No offset accounts - if you have cash saved up, it won't offset interest Things to consider Economists sometimes don't get it right, with certainty they will suggest markets will go up, but in our time we have seen this not to be the case a few times It all depends on international markets Options for fixing your rates 1 year fixed rate - don't like committing for too long a period for all the reasons outlined above Interest rates could drop over the medium term, you might want to make additional repayments or look at selling your home in the next few years. The benefit is that you will be able to budget around your loan payments over the next 12 months, Rates - The fixed rate market is constantly changing and depends on the money and bond market. Markets think rates will go up, 1 year less than 5 years - RBA indicator – drop of 0.25% 6 months, 0.25% early 2020 If markets think rates will go down, 5 years less than 1 - 3 and 5 year fixed rates most popular. Help avoid any volatility in the money markets. Get more benefit from fixing for 3 years Similar to variable rates A 5 year fixed rate will give you the highest amount of certainty of your mortgage repayments. Banks can be negotiable longer-term fixed rates Longer-term fixed rates are not suitable for everyone –additional repayments, sell the property or need extra flexibility on your loan like an offset account – it might not be a good idea. As the market has become more competitive banks have brought their interest rate offers closer to one another. Other considerations: The cheapest rate does not mean paying the lowest amount of interest Application and ongoing fees - Cheap doesn't always mean good with fixed rates Larger banks will be a bit cheeky and in a bid to make a little extra money when your fixed rate period expires Redraw facilities – Similar making extra repayments, some fixed rate lenders will allow you to take out the funds as redraw. A word of warning here, while some lenders will let you make extra repayments – some will consider withdrawing the funds as redraw 'breaking' the fixed rate contract, and charge you LARGE fees to access your own funds! Interest In Advanced– This is a terrific product for property investors and allows you to make bulk tax deductions by pre-paying your interest before 30th June. It can be beneficial from a cash flow and interest rate discount perspective, with some lenders giving you discounts of up to 0.20% off their regular fixed rates. Split loans - Best of Both Worlds – Diversify risk across portions of the total loan

Welcome to Finance and Fury, the Furious Friday edition I have identified a thread through history in the emergence of demand side democratic societies. Where there is a centralized authority, there is a need for ever increasing demand of the mobs and its path towards the downfall. Rome is a good example: Centralized authority and the need for increasing demand of the mobs lead to the downfall of Rome It was a kingdom, then a democratic republic, and then a dictatorship During Sulla's rule, there was a civil war, which made him strip Julia Caesar's family of their influences Caesar was the High Priest of Jupiter and went into hiding to save his life Caesar joined the army and rose through the ranks, he also knew how to gain public support back in Rome Caesar was kidnapped and ransomed for 20 talents He then came back and had the pirates crucified By 60BC Caesar was elected consul however used this position to gain further power To build favour, he redistributed a lot of land to the poor and the soldiers of his wars The downfall of Rome and the Slave economy – remember that slavery was everywhere in the ancient world The import of free labour destabilised the economy Through the conquest of wars and territory, there were a lot of slaves This introduction of free labour replaced those in paid labour positions Caesar needed to keep slavery around but also keep himself popular with the Roman people, hence the land redistribution tactic. This was funded by his very wealthy friends The Senate then sent Caesar to the border of Gaul for a governorship – so he couldn't get up to much Caesar has 4 legions under his command and ventured into the unconquered Gallic territory Some Gallic allies were defeated in a battle, so Caesar stepped up and hunted down the tribe As a response, some tribes unifying and arming up – Caesar took that as a sign of aggression and invaded without senate authority At one point, Caesar sold 53,000 people captured into slavery The number of senators that didn't like him was growing, they thought he was a war criminal, but the Roman army loved him and so did the people The Senate wanted his resignation as governor, however, Caesar knew he would be prosecuted without his immunity as governor Caesar then pursued Pompey and ignited a civil war, eventually capturing Pompey Caesar is then appointed as a dictator for approximately 1 year He saw a need to bring the power back into a central authority The revolt of Italian tribes who wanted Roman citizenship, Caesar defeated them and gave the allies access to citizenship to avoid further wars Caesar had now gained supreme power through the mobilisation of the masses A new constitution was established to accomplish 3 goals To gain the right of citizenship you had to 'live as the Romans did' Caesar needed more money, so he opened the treasury Magistrates were no longer representatives of the people, they were representatives of the dictator The senators were involved in their communities and often held accountable for their actions by the people they represent and other senators The Economic side: Rome switched from Supply to Demand slowly over 40 years, everything changed from 1AD onwards Citizens were only really taxed during times of war The wealthy ones got citizenship because they were the ones doing the fighting and could afford the weapons, armour, and horses Each province has to pay a certain amount, someone would pay taxes up front and then go to the people to collect it back When Rome went to an Empire, the leaders need more money for increased spending and more men for the army The tax system was transformed into a system of individual income tax This increased spending led to an economic downturn of Rome The emperors made it illegal to leave Rome, and forced people to work Established family occupations This was the birth of feudalism and a monarchy again The ever spending of the state and increase of taxes led to the decline of Rome Moral of the story? Fueling demand through authoritarian controls never works Indentured servitude is started In the pursuit to stop more civil wars, Caesar ended up creating more They lost what made them great When you have a system that rewards popularity by demand, you fail Supply side isn't some uncaring process, it gives the people choice The market decides, based around our wants and demands. Until regulation and controls influences come about, then there are unfair competition increases The emperors of Rome couldn't afford not to spend money, their power was amassed by making the people happy Thank you for listening today. If you would like to get in contact, you can do so here. Resources: https://www.researchgate.net/figure/The-rise-and-fall-of-the-Roman-Empire-in-observed-numbers-The-depletion-of-silver-in_fig59_283440121

Welcome to Finance and Fury, the Say What Wednesday edition. Today we are going to cover off on Climate Change. This may be a bit weird. But, the majority of proposed solutions are political/economic. Firstly, the taxation on CO2 emissions. What is this going to do to the economy overall, with additional costs of business? Furthermore, capping of production of emissions. In this episode, we will discuss climate change in terms of the narrative that it is presented as. This is around rising temperatures and the world being doomed in a few years' time. I won't be talking about environmental destruction. Is global warming man made? How will the solutions help? The common theme of Fear: Different predictions over the last few decades A similar theme is fear Most people fear catastrophic events Predictions by experts on climate change keeps turning out to be incorrect From predictions, there was supposed to be a lot of misery in the world due to climate change caused events Policy changes due to global hysteria The climate change direction changed We look at an overview of predictions and temperature claims. We should be fearful of these events, right? The issue with acting out of Fear: Opt for any solution we think will work Even if it is against our own self-interest How does this affect the brain? Social learning and context can be tools to help fears or make fears worse There is a potential to influence the way we experience fear Social isolation is another thing people are afraid of Climate change has religious elements to it This comes down to ideological subversion The message is in our face every day: 97 movies since 2010 depicting the end of the world The irony of Hollywood around actions towards fighting climate change The hypocrisy of politicians surrounding climate change Paid to pretend to be someone else for a living Our climate does change, it's the only consistent thing about it The climate definitely changes, there is no clear consensus on why or how: 97% of climate scientists agree that humans are the leading cause of climate change Do they really? Christopher Monckton criticised John Cook's findings These are unscientific findings UQ is now proving a free climate change course These claims can be broken down in the resources below Why don't other scientists speak out about it? How well can weathermen predict the temperatures? Saying that it is human-induced through CO2 emissions is why I have an issue with this The mathematical modelling and their numeric assumptions What is the relationship between CO2 and temperatures? When do the records of temperature begin? What are the mathematical models and how do scientists come to their conclusions? Joseph Postma wrote A Climate of Sophistry, which covers the modelling and math involved The same modelling shows the increases in CO2 help boost plant life Milankovitch cycles describe Earth's movements and the climate changes The debunking always goes in both directions Financially, who has the most to gain? Politicians, climate scientists, and the media. Summary: I am not denying that the climate does not change There is no measurable increase in temperature anomaly in 18 years Focusing on clean energy is a good idea, but following advice on voting for policy change doesn't help long term How does the Paris Climate agreement help? Let's come up with some long term plans to help produce cleaner energy Thanks for listening today. If you want to get in contact you can at the contact page here. Resources: Models - https://www.climatechangeinaustralia.gov.au/en/climate-projections/explore-data/threshold-calculator/ 'climategate' email scandal. If you want some light reading (180 pages or so), here is the publication on this: https://www.lavoisier.com.au/articles/greenhouse-science/climate-change/climategate-emails.pdf Milankovitch Cycles - https://en.wikipedia.org/wiki/Milankovitch_cycles Climate Conscious – UQ Emails - UQ Emails - http://www.galileomovement.com.au/docs/UQcorrespondence.pdf

Welcome to Finance and Fury Today we have Jayden here, and we will be talking about using your home for as an investment and as a forced savings account. You can start turning the bad debt into good debt. Through paying down the loan quicker, and then redrawing on the equity. You can save interest along the way and the redraw for investment is now deductible. What is home equity? Simply put, it's the difference between the value of your home and the value of your home loan But you can't borrow all of the equity in the property If the value of your property increases so does your equity How to create home equity faster? Get another bank valuation, sometimes the valuers themselves put value in different things. Bank valuations and market valuations are different Get a shorter loan term, creating some forced savings There are larger monthly repayments for a shorter mortgage term You end up paying less interest with a shorter mortgage term See table below assuming a loan of 450k with 4% p.a. Fix up your property They are comparing your home to other homes in the area. Simple renovations can add a lot of value. Make sure your renovation plan has council approval Pay more on your repayments Over the life of your loan, you can save thousands in interest Switch to fortnightly or weekly repayments Small extra amounts periodically make a huge difference over time See table below assuming a loan of 450k with 4% p.a. Use your bonuses and tax refunds Using lump sums as they hit your account and put them into your offset account or home loan This will reduce your loan principal Use one partner's income Living on 1 partner's income, and dedicating the other person's entire income to paying down the home loan You may need to cut back on spending and have a reasonable budget A young couple looking to start a family in the next few years Summary: Forced savings for yourself and turning the debt into something to be used for investments The ability to saving cash and reduce your repayments Also paying down debt to refinance for deductible debt The risk is that you may not get the home valuation you were looking for Thanks for listening today. If you want to get in touch you can on the contact page here. Visit https://financeandfury.com.au/ Other links: Guide to Maternity leave - https://financeandfury.com.au/baby-on-board-the-ultimate-guide-to-maternity-leave/ Check out our Workbook resources - https://financeandfury.com.au/resources/ Want to learn more about finance? Check out the course! https://learnfinance.com.au/personal-finance-course/

Welcome to Finance and Fury the Furious Friday edition Today we are continuing the discussion around supply-side economics We will talk about the best ways to avoid declining into a recession as an economy and some solutions for economic growth. Last Friday we talked about the great depression and some of the factors that caused it. Large escalations of money supply in a short period of time. This leads to excessive debt in a system. Today we will explore the modern economy and alternative solutions to depressions or an underperforming economy. Analogy: "you have a leaky pipe" You can get a repairman to fix your broken pipe You can provide a temporary solution, but the symptoms persist until failure This relates to the modern economy because: Our problems are very distinctive but they have happened in the same pattern Western economies have started recessions/depressions due to asset price bubbles Roman Empire: A.D. 33 existence of quasi-capitalistic financial markets – a busted real estate and lending bubble led to the sudden crash in asset prices Public spending requires more money supply, high inflation rates destroyed the value of the currency. Emperors couldn't afford not to keep increasing the money supply in a popularity contest What are the solutions? What are the structural causes of underperformance of western economies right now? Uncertainty and lack of confidence – how do they play a part? Serious competition from the Asian end of the world – what are unskilled workers to do? The solutions are structural: fix the structures that hinder growth and nurture the structures that work How do we get people to spend more? Increase how much money people have: 3 fold solution Reduce taxes: helps increase the amount of cash in everyone's pockets Considered to be more of a transactional cost to do things Taxes increase the cost of living Taxes don't necessarily contribute to aggregate demand Increase wages: helps put more money in employee's pockets to consume more Can't achieve this if the money isn't there to pay employees more Lose incentives to pay employees if businesses are taxed for doing so Specialised labour helps contribute to wage increases, through the demand for more specialised labour Increase the amount of companies in circulation to provide jobs Increase purchasing parity power: goods that cost less over time Not a devaluation of goods, just a maintenance of costs Does not work for everything, houses go up when there is more money supply Confidence and increased investment: Increased confidence leads to increased investment and more production Uncertainty is the worst thing for any market Boost aggregate demand, create jobs, improve business and consumer confidence Personal investments form part of the "savings" component in GDP Increase productivity: We are competing for jobs and the production of goods and service with everyone else in the world "bang for your buck" for how much gets done Losing industries or subsidising them? How long can this last? Forcing regulation for labour laws hurts – collective bargaining is great, to an extent If you require subsidies to survive, you're not providing increasing value to the market Other considerations: Regulation and governance is required to some degree in the free market However, the more regulation introduced the more monopolizing will occur for the sake of survival Levels of government spending, needs to be within the budget No problems with regulation and planning for infrastructure Debt and borrowing levels, we cannot keep borrowing to increase GDP Example of semi-supply side: Reaganomics and the 4 pillars Reduce the growth of government spending Reduce the federal income tax and capital gains tax Reduce government regulation The results are up for debate Supporters enjoy the end of stagflation Critics point to the widening income gap Tax cuts have always been picked apart: These disproportionately help the wealthy, but these are the people disproportionately contributing to the overall increase in quality of life for everyone This benefit aids everyone, especially in the long term, not just the wealthy These issues are at the fiscal level: The solution isn't monetary policy solely Monetary policy is meant to match what the economy needs, not play god with the money supply Monetary policy, I believe, is a major part of the problem Supply-side policies and liquidity traps, supply-side policies can help improve long-term expectations Help encourage investment and spending You know what is better to spend your money on than anybody else. Individuals are the best judge for what activity will improve their lives. Learning from mistakes is important and part of the process. Thanks for listening today, if you want any questions you can get in contact with us over at the contact page here. Resources: The 4 cons to supply-side economics - https://financeandfury.com.au/what-are-the-4-cons-for-supply-side-economics/ The great depression - https://fina

Welcome to Say What Wednesdays, where every week we answer questions from you guys, the listeners. This week the question comes from Mary; "Hey guys, love the show. Just wondering about what entitlements, I can receive if I go on maternity leave? I'm currently pregnant and me and my husband are looking to purchase our home soon. We were wondering if there was anything we need to watch out for when it comes to getting a loan while on maternity leave? Are there any other things we should be looking out for?" Congratulations Mary! The Ultimate Guide to Maternity Leave Maternity Leave Letter Need to give your employer written confirmation that you intend to take some personal time off to have your baby. At least 10 weeks before your due date, and in a lot of cases happens much earlier Must confirm your parental leave dates at least 4 weeks before taking your leave. A Maternity Leave Letter in Australia needs to contain Your full name and address The expected date for leaving work, and when you plan to return. The expected date of birth for your bub – can include a medical certificate confirming your pregnancy An email copy of the Maternity Leave Letter to your Manager or HR team should be acceptable. Template available on the website Paid Parental Leave Scheme Entitled to 18 weeks paid leave for eligible working mums (primary carers). Dads/partners (including same-sex partners) get 2 weeks paternity paid at the national minimum wage. Employer is required to provide 12 months of unpaid leave, providing you are. Permanent employee who has worked for at least 12 months before taking parental leave What are the criteria for Paid Parental Leave? In paid work, having received an income of $150,000 or less in the previous financial year Having worked continuously for at least 10, of the 13 months before the birth Worked at least 330 hours in that 10-month period The Paid Parental Leave scheme covers casual workers, contractors and self-employed How much do I receive from Paid Parental Leave? Paid the minimum wage of $719.35 per week (before tax) for up to 18 weeks. Your partner could also be eligible under Dad and Partner Pay for up to 2 weeks, meaning you could receive a total of 20 weeks being $14,387. Buying a Home while pregnant, or on maternity leave There are actually some lenders out there who will approve a home loan for you even if you're not actually making an income - And the even better news is that a Maternity Leave Home Loan is one example of this Under the terms of a maternity leave home loan you can borrow up to 80 per cent of the property price Unpaid maternity leave – you'll need to have some money set aside to be used for making repayments. Applying for a Home Loan during Pregnancy Best to apply for a home loan when you are pregnant and are still working. Can be a lot harder for you to secure a home loan whilst on maternity leave. Sit down and create a clear financial plan before the baby arrives so that you're prepared Remember that you'll need a bit of extra money to move and for the unexpected expenses Which banks will offer Maternity Leave home loans? Majority of the banks reject this type of loan application Why? Because they consider it risky – based on the idea that you may be able to not return to your job while lending policies for this type of home loan are stricter a number of banks still loans While lending policies for this type of home loan are stricter a number of banks still loans – Just need: Evidence of income or employment - group certificate, or PAYG summary showing your previous years income. A letter from your employer, states that you are on maternity leave along with all the details Statements showing your savings held in your accounts, loans or investments. Details of any government entitlements you are currently receiving, like Paid Parental Leave or Family Tax Benefits Unpaid or Paid Maternity Leave: Does it make a difference? Compared to unpaid maternity leave, a paid maternity leave is viewed positively by banks – obviously But most employers only pay half of your salary on maternity leave so lenders don't evaluate it based on a normal salary. Is it possible to put my mortgage payments on hold? If you're a bit further down the track than applying for a home loan and have actually already started paying your loan off then you may have a bit of equity in your home. One option is to look at putting your Mortgage Repayments on hold until you go back to work. This is sometimes called a Repayment Holiday, Mortgage Safety Net or Repayment Pause. Options for Repayment Holidays? Equity in your home is release to help you with a portion of repayments Up to 50% reduction in personal repayments for 12 months Some banks will allow you to increase your loan to cover the additional costs while you are off work In this case, you cannot pause the payments but it is another option… While this could be a good option if you feel financially squeezed while on Parental Leave, you are just del

Welcome to Finance and Fury Today we will be going through the workbook itself How to put the goals and risk profiles together How to work out the investment philosophy and strategy How to put together the investment plan and checklist Three downloads - Found on the website Goals and Risk Tolerance Philosophy and Strategy Investment Plan You can also get it by subscribing on the website, We want your feedback, it is not set in stone – we need your help to make this better for everyone. Goals and Risk tolerance: Fact find about yourself What frustrates you? What do you want to improve? What are goals? What are financial goals? How do we separate them into short term, medium term and long term goals? Give an example of what you want to achieve This helps clarify what's important to you, and gives 4 options Home Family Wealth Lifestyle Ranking these in order of priority to you, to help focus on what is important now A matrix about you: what is currently frustrating for you? What is holding you back? What are the 5 things that you would spend your time doing if you weren't working? What are the things you enjoy doing, that are practical? What is the value of these things? What are you working towards? What will you be sacrificing for? Goal planning: why is each one important? How much will you need? Target amounts and target dates are required, check out the workbook! Getting to know your Risk tolerance: Personal situations and what kind of investor are you? What are your personal experiences? How confident are you? This can hinder your financial development What are your investment expectations and behaviours? How do you respond to market volatility? If I want a greater annual return I need to be consistent with my tolerance of volatility What is your experience and what are you comfortable with? What does your risk profile say about you? Some example allocations mentioned in the workbook! Investment Philosophy: What is it? Set out your beliefs to generate your investment strategy Investment beliefs – what do you believe investments are? What has your relationship been with investments? What is the purpose for investing? Combine your beliefs and purposes to form an investment philosophy Investment Strategy: What are your goals and timelines? These will impact the next stage of your strategy Work towards becoming more financially literate What is your tolerance of volatility? How do you react to volatility? Investment Plan Figure out what you want you need first - Hardest part for some people to answer Look at your expenses: What your ideal lifestyle costs? Also, when do you want it by? Time matters thanks to inflation - $1 today is not $1 in 10 years Reverse engineer your targets Just do it – Action is more important than planning Checklist – go through each option to implement This has been an overview of the first 2 workbooks. Start working through them, and let me know if you have any issues with them. We are expecting you to let us know how to improve this workbook, and all other workbooks we make Visit financeandfury.com.au to leave feedback over on the contact page. Resources: Invest in yourself - https://financeandfury.com.au/one-of-the-best-places-to-invest-in-2019-is-to-invest-in-yourself/ Goals – https://financeandfury.com.au/goals-for-the-new-year/ Risk tolerance – https://financeandfury.com.au/risky-business/ Investment mix - https://financeandfury.com.au/perfect-investment-mix/ Investment philosophy – https://financeandfury.com.au/how-do-i-make-an-investment-philosophy/ How to build an investment strategy – https://financeandfury.com.au/how-do-i-make-an-investment-strategy/ Investment strategy to fit your goals – https://financeandfury.com.au/building-a-strategy-to-fit-your-goals/

Welcome to Finance and Fury the Furious Friday edition If you have been paying attention to the news then you would know about the current GDP per capita recession. Today we will look at recessions and different policies to help boost the economy. It is all apart of this miniseries on supply and demand side economics. There are lots of different views to avoid recessions and get out of them. What is a recession? What is a GDP per capita recession? A period of temporary economic decline and negative GDP growth for 2 consecutive quarters. The GDP per person is declining, we haven't had a recession under this definition since June 1991 If this keeps happening for 2 years, that's when we get a depression. GDP? The measurement of what we are marked against An aggregate measure of production equal to the sum of the gross values added of all residents and institutions engaged in production The four components to GDP? Consumption, usually the largest component of GDP. The value of consuming by individuals in the economy. Investment, it is business investments in new equipment and services. Buying things for the business to operate, this gets included in investments. Government spending, the sum of government expenditure on final goods and services. Net exports, this is our exports minus our imports. In addition, the services we produce that are used by other countries. Economics textbooks will admit GDP is flawed when it comes to measuring production in an economy. How do we boost GDP? Supply side: boost domestic demand through cutting taxes and reducing regulation Demand side: boost domestic demand through expansionary monetary policy, or expansionary fiscal policy The Great Depression: Started in 1929 and lasted until the late 1930s What was the result? What triggered this? Well a major fall in the US share market Worldwide GDP fell by 15% and it lasted over 2 years What was the cause? Keynesian theory – demand driven theory. Loss of confidence from the market crash led to a reduction in consumption and investment spending Why didn't the massive spending help? What are the issues with increasing the money supply? What if there is no confidence? Monetarists – believe the great depression occurred normally but the shrinking of the money supply exacerbated the economic situation It was caused by a banking crisis A vicious cycle started and a downward spiral accelerated What are the criticisms? What is the lack of spending or lack of money supply? Why was there a crash in the first place? Australian school and Debt Deflation Friedrich Hayek and Murray Rothbard - wrote America's Great Depression (1963) Expansion of the money supply in the 1920s, leading to an unsustainable credit-driven boom It was the inflation of the money supply that led to an unsustainable boom in asset prices and capital goods What was the chain of events that proceeded? Credit expansion cannot increase the supply of real goods Who is Hans Sennholz? Why were there protectionist trade policies? Why were the income tax rates raised? See any problems with demand side and monetarist solutions? What happened in 2008? Massive debt increases to fuel demand as well Monetary stimulus has very little effect Central banks print money for the sake of putting it into the economy Summary: Keynesian theory is really only effective for relatively closed off economies The multiplier has been small If we keep trying a failing solution, why should we expect a different result? What is the solution? We will cover this next Friday If you go to financeandfury.com now, you can subscribe to the mailing list and receive the workbook on Monday when it released, to go along with Monday's episode. We won't send any spam content, it will just be workbooks, attachments, and info to go along with some episodes. If you want to get in touch, you can do so here over at the contact page. Thanks for listening, and have a great day.

Welcome to Finance and Fury, The Say What Wednesday edition, where we answer your questions. Today we have a question from Nick - Watching the Leonardo Di Caprio documentary about global warming, which touched on how the large oil corporations used bribes to corrupt politicians into slamming down new legislation to move towards a greener earth. My question is: Have Politicians been holding off implementing renewable energy in the fear that it would stagnate the economy by interrupting the multi-billion dollar industry? And if we moved completely from Oil to Renewable Energy, what sort of effects would take place on the economy? Would it be smooth sailing and all good? We will cover this in a 3 part series, but may not be back to back. Today will focus on oil and why it is unlikely we will move away from it anytime soon Then the climate change debate, and come back to Leo and Al Gore The final episode, look at the solutions at work and how they work Today: What happens if they do? I think the reluctance to move to renewable energies, away from oil, is 5 fold What oil is used in The technology for renewables Political donations Can't tax renewable emissions The petrodollar History lesson: "there is nothing new in the world, except for the history you do not know" In 1944 global leaders got together and created a new world economic order after the world wars The US was now the world's leading economic power Why would 44 countries allow the value of their currencies to be dependent upon the US dollar? By the 1960s the US hadn't lived within their means By 1971 the trade deficits increased and domestic spending increased Growing demand for countries' gold back What could they do? President Richard Nixon Shocked the Global Economy, August 15, 1971 The gold standard was abandoned, now a FIAT system Now the currency is a floating currency, based on market forces The federal reserve now is maintaining the currency They have never been audited either Federal income tax goes towards paying back the federal reserve Kennedy tried to change this, execute order 11110 Reagan tried to bring in his election promised tax cuts, and there was an attempt on his life Henry Kissinger and the Petro Dollar The OPEC nations agreed to price oil in USD Artificial demand for USD The Axis of evil? There are problems for countries when they try and move away from the Petro Dollar As more countries move away from the Petro Dollar, the US will experience inflationary pressures: What happens if this system ends? What actions can they take to avoid collapse? How would the world be affected? Summary: Backing the currency to provide demand to allow increased supply The forces of the oil market, and the result of a big government Renewable energy, climate change, and greenhouse emissions is a different topic for another episode Thank you for listening to today's episode. If you want to get in contact you can do so here.

Welcome to Finance and Fury Today we are continuing from last week, and going through strategies to fit your goals. Some bad news… The workbook will be released next week because there are a few pieces missing, as it doesn't achieve what I wanted it to. So as a DIY template, I didn't want to put out something that could be misinterpreted. There will be a special episode for the workbook and putting all of these episodes together. So look forward to that. Today we will cover the strategies that form part of a plan Factors that influence each: Goals – long term and short term Risk profiles – target asset allocations We have done a few episodes on these Investment plan – short term: Cashflow – the building block for achieving short term goals and long term wealth Strategies for this? Reduce spending, monthly savings plan, repaying personal debt, home deposit, and reducing tax. These are specific to you. Investment plan – long term: Some hybrid options - building wealth, reducing tax and leverage Some overlaps between categories/outcomes Building Wealth: Monthly investing – is for the long term if you have a financial independence goal What do I need to focus on? Lump sum investments – Property, Shares and Managed Funds What are the considerations? What are the costs? Leveraging for non-property investments – Equity borrowing and Margin loans What is dollar cost averaging? Superannuation strategies – consolidation, growth asset allocation, reducing asset allocation closer to retirement, making salary sacrifice, non-concessional contributions What do your insurances within superannuation cost? What do you do if you're within 5 years of retirement? What is a co-contribution? Debt repayment – Mortgage and Investment debt What are the opportunity costs? These will be run through in the strategy workbook next week – today was a quick run through Investment plan example – Mine: Cashflow: Paying myself first Spending vs investing – opportunity costs considered today Holding reserves in cash for when I need it, for when the market is down and so I don't need to sell investments Wealth Accumulation: Investing in long term growth investments – 30% index funds and 70% active funds Making monthly investments – superannuation and personal investments Thanks for listening today, sorry about not having the workbook today but it will be ready by next week. Where we will run through it and wrap up the last few weeks of Monday episodes. If you liked the episode, let me know on iTunes with a review or send me a message on the website here. Episodes to check out: How do I make an Investment Philosophy? - https://financeandfury.com.au/how-do-i-make-an-investment-philosophy/ How do I make an Investment Strategy? - https://financeandfury.com.au/how-do-i-make-an-investment-strategy/ Find and Forge your own path - https://financeandfury.com.au/say-what-wednesdays-want-to-know-how-to-make-the-most-of-your-money-find-and-forge-your-own-path/ The Perfect Investment mix - https://financeandfury.com.au/perfect-investment-mix/ Goals for the New Year - https://financeandfury.com.au/goals-for-the-new-year/

Welcome to Finance and Fury, the Furious Friday edition. We are continuing the series on supply-side economics. Today we will focus on the down-side of supply-side economics. Remember, supply-side economics believes that governments should remove barriers to production. How is this done? Lowering taxation and decreasing regulation The aims of the policies? What are the 4 major downsides? Income Inequality: Those that supply more also accumulate more wealth Results in a disproportionate amount of the tax savings going to those on the highest incomes More wealthy people is a good thing More supply means lower inflation and cheaper goods The billionaires of Australia own companies that supply jobs, they don't sit on piles of cash Countries with more billionaires have lower rates of poverty We are very well off despite what you might think Deregulation will Destroy the Environment and Public Safety Experts do agree, lower regulation leads to increases in profits and increased GDP Deregulating coal mining will lead to more destruction of the environment? Really? Cheaper and cleaner power isn't appealing to you? It's about opening the door to new ideas and new creation of those ideas Using the private sector to achieve the creation of new ideas, the government never innovates, just adopt it Deregulation can lead to more competition within free markets for better ideas to replace old ideas Who have higher safety rules? The government or companies internally? Deregulation from the US about the railroad industry There will be mistakes in deregulation, but compare that to mistakes in increased regulation These first two strawman arguments highlight misconceptions, the next two arguments are real potential downsides Budget Deficits This comes from a reduction in tax revenue but maintained levels of spending Lowering the tax rate increases wealth, so the pie to take taxes from is larger Critics say under president Reagan, there were decreased tax revenues. However, there was a recession just before this. Demand side economics increases deficits Volatile Economy Deregulation can make the economy more volatile Like investments, volatility is your friend The slow down in GDP growth is from the increased size of government, spending, debts, regulation increase, and increased taxes or introducing new taxes When you look at a lassie-faire economy, it can be more volatile than a centrally planned one When you look at the regulation of the taxi industry, it created an industry that needed protection from Uber. Because the regulation of taxies was inefficient. Recessions occur when there are 2 or more consecutive quarters of negative gross domestic product growth. We are in a per capita recession as of this week. Creative destruction – innovation is destructive No government bailouts – recessions can be a forest fire, and bailouts incentivise moral hazardous behaviour Deregulations and lending guarantees leads to the banks taking on additional risks if it is backed by the governments No government stimulus, if there was a stimulus from the government – where did it come from? Do people actually spend it? Australia had a slow rebound from the GFC Industries that require protection from the government lead to inefficient workforces. Look at the prior example of railroads and inefficient rail tracks. Flying industries, the airline deregulation act of 1978 eased controls on fares We will run through the policies of Thatcher in a few weeks. Lead to a massive loss of jobs in manufacturing. Creative destruction does happen – this is what the government should focus on In Summary: We have explored the 4 criticisms of supply-side economics It leads to inequality, deregulation causing a destruction of the environment and worker safety, deficits and recessions Next episode: We will look more into recessions and some real-world examples of recessions. And we will break down supply side theory and a demand side theory for dealing with recessions. Thanks for listening, if you enjoyed the episode please leave it a review on iTunes. If you want to get in contact, you can do so here.

Welcome to Finance and Fury's 'Say What Wednesday' edition, where every week we answer questions from you guys. This week the question comes from Effy; "I am a Chinese migrant living in Melbourne. I do not recall if your podcast has covered insurance, such as life/accidental insurances. After some online research, I noticed that the variety and content of the insurances vary geographically. I am aware that many main land Chinese purchase insurance policies in Hong Kong as it is much more attractive. What is your understanding of the Australian insurance industry and what are the must-haves for everyday Australians? I am trying to improve my financial intelligence by upgrading my skills to increase my earning capacity and learning to use financial products (property, shares, etc) to sustain and generate more passive income. It is not easy work, I have certainly made several mistakes and I feel I need more guidance. Can you share some of your personal experiences on how you come to where you are today? Looking forward to hearing anything from you and learning from you. Sincerely, Effy" Awesome question! Insurance – What is it? Simply an arrangement where a company, or the state, provides a guarantee of compensation for specified loss, illness, or death, in return for payment of a specified premium. It's a contract that allows you to pass your liability (loss potential/risk) to a third party for a price (called a premium). Personal (wealth) protection Insurance differs from country to country, including the types of covers available. Mainland China has been going through massive push on insurances lately. Most insurance companies are actually state/party owned (in part), with the industry still considered in its infancy stage. When it comes to insurance, you should look for a reputable provider regarding payout rates and levels Investment policies – the main objective of these policies is to facilitate the growth of capital by regular or single premiums. These are common in the U.S., China, RSA, and Australia 30 years ago, and referred to as "whole of life". They have both an insurance component and an investment component (or, 'surrender value'). The cash value refers to the refund you'd receive for a portion of your paid premiums, paid as a lump sum if you cancelled your policy. However, because Whole Life includes both an insurance and cash value component it has become too expensive for many customers and was thus replaced with Term Life. Whole of Life Insurance is no longer available in Australia though it was really popular until 1991 when superannuation came into existence and started replacing the cover. Protection policies – the most common form of insurance in Australia, protection policies are designed to provide a benefit, typically a lump sum payment, in the event of a specified occurrence. Typically called 'term insurance' in professional circles, they have as the name suggests, a term limit to them. Example – Total and Permanent Disability (TPD) policy is designed to provide lump sum if you're unable to ever work again. These typically expire between age 60-65 depending on the policy – as this is 'retirement' age – and the term of the policy. Core questions when looking at insurance What type of policy do you need? That is to say, what events would you need to cover? For example, home insurance covers a house fire. But if you get hit by a car and are unable to work for 6 months what type of cover do you need? The other question is, how much will you need if the event were to occur? Depends on event type and duration of the impact Your financial situation Will you be able to ever go back to work? If not, how does this impact your future financial security When trying to determine what types of covers you may need, consider the four common occurrences that might put you out of work or create financial stress in your life. These tend to be referred to in insurance contracts as 'Conditions of payment'; Passing away (the most obvious one) - Life Insurance covers this. A lump sum is paid to your beneficiaries. Becoming disabled (permanently) – Total Permanent Disability (TPD) Insurance covers this. Breaking a foot doesn't make you permanently disabled There are different types of cover definitions ADL - Permanently unable to perform two of the 'Activities of Daily Living': Bathing and showering, Dressing and undressing, Eating and drinking, Using a toilet 'Any' occupation - defined by likelihood to return to any form of full-time work for which you are reasonably trained. You may be injured enough to never work, even if you don't meet the ADL definition. 'Own' Occupation - can look at insuring your specific occupation which is typically something specialised. Being injured – This is considered temporary disability. So, if you break your foot you might make you eligible here (only if it puts you out of work) - Income Protection covers this. Income protection provides replacement of lost income due to i

Welcome to Finance and Fury, today's episode is a flow on from last Monday's Investment philosophy episode and narrow down into an Investment Strategy. To invest properly, your investment beliefs need to expand into a strategy, an implementation plan. So Today: Expand on building an investment strategy from the investment philosophy – check out the worksheet Look at goals and timeframes The types of investments you will use How much additional risk you can take on Next Week: Investment plans and specifics of putting the strategy in place Implementation of said plan The workbook will be available What to actually do? And what habits you will make a part of your life? Workbook for this: Spent time putting together a work book for listeners Questions to hep run through this exercise Includes a checklist Investment strategy: Summary of what you will do Behaviours that are necessary Based off of the investment philosophy Making it into an actionable plan How to come up with it? Be honest and ask yourself, how you will achieve your goals? Has to be in line with the investment philosophy The strategy helps you keep to your philosophy How do you view your investments? What do they mean to you? The strategy is how you articulate your strategy throughout your life Categories of investment strategy questions: Goals and timelines How much risk can you withstand? Strategy to use Outline: Goals and timelines. We have talked about financial goals before. Your attitude towards risk – are you a lover or hater? Identifying a risky strategy when you see one – crystalising losses or not, will you be better off? Avoid emotions and hard sells with the fear of missing out Behaviours and emotions – knowing how you will react ahead of time helps avoid the worst case scenario Mental exercises – not as good as the real thing but they help Strategy specific – how will you look at achieving the goal? Look at the types of investments that will help you achieve you goal An example of mine: listen to find out details Investment philosophy are these 2 simple statements Investment strategy is 3 statements – how I implement my philosophy Next episode: Work through some options to build wealth The basic building blocks to pursue financial independence Investment plans and specifics of putting the strategy in place Implementation of said plan What to actually do? and what habits you will make a part of your life? Get ready for the workbook next week. It will be available on the website. Thank you for listening. If you have any questions or want to get in touch you can do so here. Resources: Last week's episode - https://financeandfury.com.au/how-do-i-make-an-investment-philosophy/ My financial goals - https://financeandfury.com.au/goals-for-the-new-year/ Setting your goals, with workbook - https://financeandfury.com.au/one-of-the-best-places-to-invest-in-2019-is-to-invest-in-yourself/ Overview of risk - https://financeandfury.com.au/risky-business/ Investing in 2019 - https://financeandfury.com.au/investing-in-the-share-market-in-2019/

Welcome to Finance and Fury, the Furious Friday edition. This is part 3 in the poverty miniseries, which is alongside the supply side economics flow on. The first episode was supply and poverty. The second episode was the big 5 factors of poverty. Today we will put it all together to derive a system that can reduce overall poverty. This system: will it be perfect? Just look at Utopia "misplaced faith in political utopias has led to ruin" All systems have flaws Having less freedom leads to more poverty Could technically lead to more poverty, if it's by choice The system has to be 2 parts: What system works best to reduce the big 5 factors: reduce diseases, increase knowledge, reduce apathy, reduce authoritarianism and build resilience rather than dependence. What provides individuals freedoms? Disease: Death from chronic disorders in the first world Death by horrible diseases in the third world like respiratory infections, diarrheal diseases etc The necessities: clean water, electricity, food, and education Where do these factors come from? Why aren't these a problem in Western countries? The System: Corruption comes with any system Greater power can show more corruption But power is needed to provide a structure for secondary factors Money in politics can represent a form of corruption There is no sense of service working in institutions Any powerful system will punish you for speaking truth about their evils Lack of transparency within institutions, to remove this, politicians should forgo financial incentives The formal education of politicians and the real world experience of politicians are very slim Reducing the element of these factors helps to reduce poverty, by using a meritocracy What does any system have the ability to create? The remaining 3 factors - dependency, apathy and authority The more power the government has, the worse off the population are The focus should be not to make the population reliant The battle between freedom and free stuff Welfare helps to a point, but after that point it keeps people in poverty The safety nets can either be voluntary or compulsory Most people don't want to support people who want to remain in the safety nets These are not long term solutions The lack of knowledge is a responsibility of ours 12 years of school is not enough, Focus on practical and applicable skills. A libertarian view on education. Learn the basics The best and brightest from these suffering populations leave, leaving no one to help fix local issues Community systems that can help build self-reliance, dialectic systems help communities Recap of the System: Allows for the provision of infrastructure, concentrated responsibility to provide this Corruption needs to be low to reduce poverty Lack of decision-making ability Provide jobs and the ability to get jobs Greater the economic freedom, the lower unemployment is and the lower tax is More freedom means less inflation and the greater price purchasing parity Countries at the bottom have high government expenditure to GDP % The last 3 factors are solved by individual and Economic freedoms Small percentage of people think that poverty has gotten better, the majority think poverty has gotten worse Stop using a relative poverty measure, only 4% of Australians are in absolute poverty. It's not extreme poverty. Which political party seems to be on the right track? Listen to the podcast to find out! Government spending is about $16,000 per person in this country Public earnings are about $1,775 pw whereas private earnings at about $1,590 pw. The 74 senators have interesting life experience before politics To summarise the episode: More economic and individual freedom, the lower the poverty rates Next week: Back on track next week with the pitfalls of supply-side economics. There are 2 major faults. If you liked the episode let us know by leaving a review, or get in touch with us at the contact page here.

Welcome to Finance & Fury's, 'Say What Wednesday', where each week we answer questions from you all. This week our question comes from Tara; "Hi Louis, what do you think are some financial considerations when it comes to a relationship? - Should you have a prenuptial agreement? - Shared bank accounts - If you are looking to start a business together, what will happen if you break up? And what are the laws in Australia in regards to this?" Thanks Tara, that's an awesome question because it's really important to think about, for anyone entering into a relationship. There's the obvious factor; being on the same page as your partner financially is sometimes easier said than done. I'll do a future episode to cover off on this and include strategies to work on together financially to ensure you're on the same page. But today, let's look at the legal / protection side. By the way, this comes with a big disclaimer – I'm not a lawyer! This is not legal advice, just general discussion around what constitutes relationship in eyes of law, what happens when you separate, and ways to protect yourself, or your business. Let's start with the definitions. You have 'De facto relationship' or 'Married'. And in fact, there has actually been little difference between them since approximately March 2009 as the courts deal with financial matters in much the same way. The law has formulated a set of factors to determine whether a couple are (or were) de facto or if it is less-serious. This takes into account: How long the couple have been together in their relationship, and if the relationship is sexual in nature Whether there's financial dependency and mutual commitment to a shared life Property ownership and use; Care and support of children; In summary, a de facto relationship is a relationship in which a couple lives together on a genuine domestic basis for 2 years (without separation), however there is an exemption if there are children or substantial contributions to joint property This applies to same or opposite sex partnerships and we see the same laws across all states and territories in Australia. Also, a tip for you players - You can also be considered to be in more than one de facto relationship at a time If you're in a short-term relationship (under two years) and you keep your bank accounts separate, there's no financial dependency, there's no kids or home together, you're okay. It's pretty straight forward. Generally, by law you're not considered in a relationship and therefore there'd be no separation of assets if you were to break up. If you are already married or in de facto relationship there's little that you can do after the fact in a lot of cases – beyond hiding money. Protecting yourself First, take a look at the end game – what happens in separation? You can look at each potential outcome and work backwards from there, to figure out the best way to protect your assets. When looking at how courts would split assets, there's actually no specific formula used to divide assets and property so no one can tell you exactly what orders a judicial officer will make. A decision is made after all the evidence is heard and the judicial officer decides what is just and equitable based on the unique facts of your individual case. The Family Law Act 1975the general principles the court considers when deciding financial disputes include; what you've got and what you owe – valuations and asset position (net worth) direct financial contributions by each party to the marriage/relationship (salary earnings, investments) indirect financial contributions by each party (gifts and inheritances from families) non-financial contributions (caring for children and homemaking) future requirements (age, health, financial resources, care of children and ability to earn) The way your assets and debts will be shared between you will depend on the individual circumstances of your family … and every settlement is different So, in practice, this doesn't help very much in 'planning to protect yourself', which is partly my point – nothing is off the table! If you are already in a relationship and then start a business or accumulate wealth, it becomes harder to protect. This includes access assets in Family Trust, or in superannuation. As an example, we can take a look at Jeff Bezos who started Amazon in 1994, after he married his wife in 1993. She might now become the richest woman in the world as a result of their separation. Back to Tara's question! The Prenup – what you can do In Australia they are called 'Binding Financial Agreements' (BFA) This sets out the way some or all of a couple's assets will be divided in the event that their relationship breaks down. It can also deal with spousal maintenance. A BFA can be signed at any point during a relationship, but it is preferable that the agreement is put in place before getting married or entering into a de facto relationship (i.e. living together). Protecting wealth – how does a BFA stack u

Welcome to Finance and Fury Today we are going to talk about how to implement an investment philosophy. It is a coherent way of thinking how you fit into your investment plan. It is a mission statement to follow when investing. It can help with understanding the types of investments you should be making, and avoid mistakes that influence your investment behaviour. What is it: Core beliefs for your investment strategy Investment philosophy vs investment strategy Why is it important? Think about your investment strategy as your purpose A philosophy outlines a purpose and helps you stick to it Benefit from long term investing Avoids making rushed decisions How to make an Investment Philosophy: How do you learn? What do you know about investments? What else do you need to know? What are active and passive investment styles? How capable are you to do it yourself? How much time do you have? Is there value with outsourcing it, and gaining a comparative advantage? What are your goals? Why are you investing? What are the timeframes? What do you want from investing? What is your risk tolerance? What are you willing to invest in? This helps you avoid emotional investing, as you have invested in alignment with your investment philosophy What is the risk-return relationship? Figure out which investments fit in your philosophy How will you live by it? Keeping it as simple as possible Always remember you are investing in your future What is the opportunity cost? Think in the long term and big picture, what does the future look like? How much will you need? The rule of 20 Don't try and go for big wins quickly Things to remember: Quality – don't invest with high hopes of large gains, losing funds will destroy your future Diversify – at least 15 – 30 companies Remember – invest in line with the big picture Living by your philosophy: Negate the emotional side of investing Daily habits and prioritisation Be patient and be honest with yourself Putting financial habits in place: One small thing at a time Good habits come from positive feedback loops of cue, action, and reward The Pareto distribution - 80/20 rule What is one thing that you can do to better your future self? Summary: Start with yourself - Write out what you know and how comfortable you are with investing Look at your capabilities – Do you need to learn more? Or can someone do it for you? What are your goals? Set up one page to write out your investment statement – top-level picture/vision of your investments Keep it in your habits every day My investment philosophy: Investing consistently in long term growth investments I look at 30% index funds and 70% active funds My active funds are split between small cap, emerging markets, and international shares I reinvest all income earned I hold reserves in cash for when markets go down I invest in high-quality assets, diversified across the board Looking at spending vs investing Making regular investments split between super and personal investments Set up automatic investments into quality assets, keeping transaction costs low That is an example of an investment philosophy, something to live by that you can stick with. From here, you can build your investment strategy. Set up what you want to achieve, and some simple rules to live by every day. This will help get a strategy in place. Next week: Look at an appropriate investment strategy and the strategy side of the philosophy. Also, what to target in terms of asset allocations and investment selections. Thanks for listening and feel free to get in touch if you have any questions or want to know how you can achieve financial goals. You can do so here. If you liked the episode, give us a review on iTunes, and if you didn't like the episode, let us know. Resources: Invest in yourself and investment purpose: https://financeandfury.com.au/one-of-the-best-places-to-invest-in-2019-is-to-invest-in-yourself/ Rule of 20 in the form of taking control of your money - https://financeandfury.com.au/take-control-of-your-money-nobody-else-is-going-to-do-it-for-you/

Welcome to Finance and Fury, the Furious Friday edition This episode is a flow on from the previous furious Friday episode question from Nick, about poverty. Last episode we talked about how poverty is defined and the economic factors of poverty, which play only a part. Today we will cover off on the major contributors of poverty. There will be a third part for answering the question about the types of government systems. Poverty is a social problem: Poverty as a lack of resources, so poverty at an individual rate We didn't address the social problem of poverty, communities, under-employment, lack of skills etc. Social problems are secondary factors Dr. Phil Bartle: Spent time living with poor communities Dedicated his life to the development Much of our aid contributed to poverty Empowerment methodology – struggle produces strength and ability The solution is the removal of the big 5 factors No moral judgment is intended The Big 5 factors: Lack of knowledge – people keep knowledge to themselves and a lack of skills is the result. Expose individuals to training, not general education. Ivan Illich believes schooling keeps people poor in impoverished nations. Disease – absenteeism is high and productivity is low. Being healthy contributes to the eradication of poverty. Prevention is much better than treating a disease. Apathy – people feel powerless to try and change their conditions. Why try if the game is against you? Jealousy brings people back to poverty. Thomas Sowell shows cultures of a community. Some cultures help a community, some degrade a community. Corruption and Authoritarianism – a major cause of poverty. It is stealing from the public at a multiplier of detrimental effect. Using taxation as a way to fund the political class. Dictatorships have war, famine, and poverty. Dependency – this results from receiving charity. It is a short run solution but becomes depended on. Once they know what to do and how to do it, they can get themselves out of poverty. Empowerment is the alternative to charity. Summary: These 5 big factors all coexist together and contribute to furthering each other. If we fight the factors of poverty, it will contribute to the decay of those factors and ultimately poverty Tackling all 5 Is very important to reduce poverty, with empowering communities. I don't want to diminish those struggling, some people have been dealt with awful hands Don't believe in the easy band-aid solutions In the next episode: We will go through what system works best to reduce the 5 factors To build resilience rather than dependence Thanks for listening Give us a review on iTunes and if you want to get in contact you can do so here at the contact page. Resources: The money multiplier effect can be learnt about in this podcast about the centralization of power and control of the economy - https://financeandfury.com.au/furious-friday-the-centralisation-of-power-and-control-of-the-economy/ Black rednecks and white liberals book - https://en.wikipedia.org/wiki/Black_Rednecks_and_White_Liberals

Welcome to Finance & Fury, the 'Say What Wednesday' edition where every week we answer questions from you guys. Today's question is from John; "Thanks for the podcast and the content you provide. I thought a useful podcast topic could be the legislative changes Labour are proposing if they win the next election. Such as changes to franking credits, negative gearing and taxation of family trusts. I thought this could be an interesting topic considering these changes will possibly affect a lot of your listeners, especially small business owners who are operating as a trust etc - John" Thanks John, that's a good question, and great timing with the election between 33 days from now (if called on the day listening – min time rules) and May 2019 To start, here is a quick list of the policy changes, not including the bigger ones everyone is talking about; CGT Discount: Going from 50% to 25% (on new investments after 1/7/17). This applies to business as well. Superannuation: SG increase to 12% On one hand it's good for people when they actually retire down the track…but not so good along the way Plus, open to legislation risk and provides tax surplus/infrastructure funds for the Government Non-concessional cap to be reduced to $75,000 No more borrowing inside Super anymore (SMSF) 30% contribution tax for those earning over $200k p.a. in total income (including super contributions) The Three Big Changes Removal of Negative Gearing According to the ABS, 21% of households owns a second home as an Investment property 35% of dwellings are investment properties (rental properties) Property may become less valuable in investors eyes Check out episode Furious Friday ep 27 https://financeandfury.com.au/furious-fridays-dissecting-labors-plans-for-housing-affordability/ and Say What Wednesday ep 33 https://financeandfury.com.au/say-what-wednesdays-housing-market-history-and-lowering-property-prices-sustainably-in-the-future/ Family Trusts – changes to distribution laws Implement a thirty percent (30%) floor on the taxation that applies to distributions made by discretionary trusts 'Distributions cost $3.5bn to government in lost tax revenue' How it works – You have investments (or Business) inside of a family trust Assets earn income (profits) which is distributed to the adult members who have the lowest MTR Under 18 years of age get TFT of $416 – then 66% and down to 45% Can't retain earnings The Income splitting example that Labour gives: Sam is a surgeon and is married to Melissa who doesn't work. They have two adult children who attend university and who also don't work. Sam earns $500,000 a year from his work (pays tax PAYG) They have a discretionary trust with investments which generates $54,000 in income from their investments. They attribute $18,000 to Melissa and $18,000 to each of their two children, so no tax is paid on the $54,000 distribution as Melissa and the two children are each under the tax-free threshold. This represents a tax saving of $14,460 compared to if the investment income been attributed to just Sam and Melissa Total tax Sam pays on his earned income - $208,097 They only get to save $14,460 on investments If the new rules are bought in, then $224,297 will need to be paid in tax (40.5% compared to 37.6% tax on all income under the current arrangement) … They are paying a lot in tax! What people forget is this; "Sam" spent $200k-300k on becoming a surgeon, and delayed his earnings until his late 30s to early 40s. Also, being able to distribute to kids is very short lived $54k to Melissa = $9460 tax ($5k tax saved) Example 2 – A similar scenario with different earnings, and one I see more commonly; Sam earns $120k, Melissa earns $60k. They have 2 adult children earning $15k each while at uni. They split the $54k distribution between the kids. This results in $9,391 tax saved, compared to parents splitting the distribution 50/50 Total income = $264k, of which the family pays $56,468 tax to redistribute under the current agreement (rather than $65,859) Under new system the total tax will be $62,034 Some Issues Shorten admitted 200 thousand small businesses will be impacted – these are the people he is supposedly representing Tradies, and others, who use these structures for asset protection at no benefit to income in most cases Now they will pay a minimum 30% tax on their earned income rather than MTR Testamentary, disability and charitable trusts, deceased estates and other good will trusts will be impacted The removal of Franking Credits How Franking Credits work You own shares in a company, and as owner you are entitled to Profits (Dividend payments) Gross Profits come from Revenues – Costs (interest, expenses), Net profits = Gross Profits minus Taxes Profits are paid out to shareholders (minus what is kept by company) The dividend is received by individuals. The ATO assesses the Dividend + the Franking Credit ($1.425 instead of $1) If over 30% MTR, you get nothing back, under 30% MRT get something

Welcome to Finance and Fury Today's episode is with Jayden and we will be talking about why property might not work for you, or when you shouldn't buy property. We have talked about using property to build long term wealth using leverage. However, there are some reasons why you should not buy property. The 4 reasons: Getting rich quick Financial literacy Tax reasons Your personal finances Getting rich quick: Property is a long term game, 20 – 30 year journey Jumping at an opportunity due to the fear of missing out Don't let your emotions ruin your investment plans Trying to time the markets Stats show this isn't a good way Financial literacy: You need to learn how property works Not understanding your finances – just the basics You need to know some stuff to get through property investing The difference between lifestyle assets and investment assets Experience really helps Doing it for tax reasons: Using negative gearing Buying a property for depreciation and claiming deductions Property should be for long-term wealth building, not loss accumulating Personal finances: Having enough cash for little costs There will be times that the property isn't rented Make sure you can achieve the loan you need Your ability to afford the loan is very important What will happen if rates go up? Know your limits on borrowing before starting to research investment properties When do investment properties work well? When your finances are in order When you can afford a quality investment property When your investment plan is long term If you are willing to be patient to find the right investment Thanks for listening today, if you have any questions you can reach us at the contact page here. Another episode around property investment: How to invest in property in 2019 - https://financeandfury.com.au/how-do-i-invest-in-property-in-2019/

Welcome to Finance and Fury, the Furious Friday edition. This week is a flow on from last week's episode talking about the basics of supply-side economics. But, it's going to be applied to a question we got from Nick. What is a solution for society that would eliminate all the poverty that exists? This will be broken up into 2 episodes in total. The second part being which political party that seems to be on the right track to achieving this. Poverty: It's an extremely deep topic to discuss We must look at the statistics and the root causes Humanity was born into poverty, so how did humanity get out of it? How long ago was everyone in extreme poverty? What is the quality of life? What are the standards of living? How is extreme poverty defined? What does history tell us about how many people in extreme poverty changes over time? The poverty line: We don't really have extreme poverty in Australia What about people who receive a pension or government assistance? What is the Australian relative poverty rate? This sits at about 26% of the Australia population before tax and transfers, or half the median income level. It's the median, then that cut in half. That is the relative poverty rate for any group of people. It is about $22,500 a year in Australia for a single adult, after taxes and transfers. After redistributions, it reduces to be closer to between 10% and 14% that are in relative poverty. See how easy it is to misrepresent these statistics? If you have a society where some people have more than others, then there will always be people in relative poverty If you make everyone poor, then the relative poverty disappears Let's move on to the more absolute measure of poverty Absolute poverty: Currently, around 4% of people in Australia cannot afford basic goods, in the deep exclusion zone This group gets smaller over time People don't stay in the deep exclusion zone, its mobile, not a lot of people stay in it There are only some factors that limit people getting out of the deep exclusion zone The trend of absolute poverty over time has started to decline The world population grows, but the world's absolute poverty population shrinks What helps reduce absolute poverty? Exposing people to free markets, increased purchasing power parity Economic reform, giving people property rights Employment opportunity and economic freedom Stop planning the economy from a government and let people figure it out with free markets Economic freedom helps as it reduces the costs of goods and services The more economic freedom a population has, the more wealth the population has Check out the mini-series on socialism where I address classical liberalism Basics of supply-side economics People on minimum wage in a high GDP per capita environment are better off than people in a low GDP per capita environment It is important to focus on the standard of living and better products and services available to consume This system is better than demand-side economics, which is less economic freedom. The best working system: One that supplies a great standard of living Uses supply-side economics Allows individuals to accumulate wealth The countries with the richest individuals have the lowest levels of poverty Inequality is not the enemy Reflect on your standard of living, income distribution ends poverty but sacrifices everyone's wealth The Gini coefficient measures income equality The Gini coefficient is increasing, but so is the overall wealth Just because things aren't equal, doesn't mean they're not fair An important problem to tackle is increasing everyone's ability to have the opportunity to earn and consume cheaply. This is an extremely complicated issue. I believe that the solution lies in supply-side economics. We need the government to help though, so in the next episode, I will run through how government systems and cultures need to let people escape poverty. Thanks for listening today, it was quite a long episode. If you would like to get into contact with us you can here. And if you liked the episode, leave us a review. Have a good day.

Welcome to Finance & Fury, the 'Say What Wednesday' edition. This week's question comes from Gab; "Hi Louis, I was looking at different asset classes and how someone could get exposure to them (outside superannuation) and got stuck on "fixed income". If I understand this asset class correctly, if you hold to maturity you get all the capital back. But if you buy ETFs or managed funds you lose this benefit (as you basically just get exposure to the secondary market). Also, I thought the fees were ridiculous, especially with active managers charging 0.5%, when the long-term return is 5-6%. What are your thoughts on this? Thanks, Gab (keep up the good work!)" Hi Gab, Great question! Today we'll focus on explaining Fixed Interest in straightforward terms; What are Bonds, why do they exist, and how do they work? Price, 'Face Value' and coupon rate Buying and selling bonds The effects of interest rates on the value of bonds Bond managers – Managed funds or ETFs The role of Bond Managers Costs compared to returns Index bonds Active managers Why buy bonds or other fixed interest assets? Downside protection Higher yield than cash Middle ground to cash The risks and disadvantages Ratings system Maturity Duration Interest rate movements What I look for when buying bonds Franking credits on coupons If you have a question, or want us to cover something else in more depth, let us know at the contact page https://financeandfury.com.au/contact/. Thanks again for listening guys. Until next time!

Hello everyone, and Welcome to Finance and Fury. The last episode was about finding the right job, from your purpose in life. In today's episode, we will be looking at investing in a business, by creating one. To start: There is lots of work in planning and having an action plan when you create a business If you think what you plan to provide is better than what is out there, do it First step: It is an investment, there is risk and reward Running a business is beyond financial Become very emotionally invested in the business Risk/reward: – invest for the best return Fulfillment + financial gain + time gained Fulfillment, what do you care about and enjoy doing? Financial gain, what are you great at? Don't start one just because of financial gain, might as well earn a salary Recap: what you care about/enjoy = industry, what you are great at = product or service Finding something: What is a problem that you can solve? Who does it provide value to? People often don't buy something with little value to them Solve a big problem for people or solve problems to lots of people So what knowledge or skill do you have? Look at what people are currently paying The quality or product is the most important part How to get going: Set some goals, expansions, revenues What is the action plan? Is it viable? Who will want you to solve their problem? What will it cost you? What are the opportunity costs? Business model canvas – a great tool to start planning, you can google it Starting business costs money. Goals for your business compared to the costs. Doing your research is very important, has anyone else done what you plan to do? What about me? Enjoy solving problems and finance, care about education for people, and I'm great at strategies and investments Solve people's financial problems through providing education and advice How can I do this? What have my setbacks been? Starting a business: 5% planning and 95% doing Doing is more important than planning Get you minimum viable product (MVP as it is known) Running a business is all about belief. If you back yourself, nothing can stop you. We are our own worst enemies, we talk ourselves out of everything. Planning for too long can be detrimental Getting yourself to a financial point to cover the necessities for 12 months Businesses fail for this one reason – a lack of income to cover long term costs The important things: Accept your failures along the way You will get through Let me know if you would like a deeper dive into this. I can get a friend on the podcast who works alongside companies with cashflow and financing. Thanks for listening and tuning into the 209 investments miniseries If you want something else covered as well, let us know at the contact page here. If you like this episode, please leave us a review on iTunes or let us know on the contact page. Have a good day.

Hey all, and Welcome to Finance and Fury, the Furious Friday edition. Have you ever heard of trickle-down economics? As you know, Friday episodes are here to clear up any misconceptions about economics and politics, and this is the biggest one when it comes to conservative side economics. Today's episode covers: What is trickle-down economics? How does it work? Who does it benefit? What is the misconception? When and Where did trickle down economics start? How does wealth get produced? What are some common examples of trickle-down economics? What is supply-side economics? How do you solve unlimited wants with finite resources? How can you demand anything if there is no supply? What does supply-side economics say? What is better to have? And what improves our living standards? The benefits of supply-side economics: What are the benefits of supply-side economics? What are the aims and objectives? How is wealth different today compared to a caveman? Today, it's those who innovate that do the best Compare recent product costs with past costs, which is more expensive? How does demand increase over time? What has to change for demand to increase? The more things that are being produced, the more the economy does well Where would you rather your money? What do tax breaks for the rich do? What does history tell us? Who invests their money? Supply-side economics is not trickle-down: No wealth directly trickles from the rich to the poor when regulations and taxes are cut Lower costs and regulations mean higher productivity What are some real-life examples of this? How does this increase tax revenues? We should aim to make the pie bigger, not split it into pieces. We have cheaper stuff and increased living standards through supply. This will be the first of more episodes to come around supply side economics. Thank you for listening, if you enjoyed it give it a review or share it around, and if you want to get in contact you can do so here. Resources: Supply-side economics - https://en.wikipedia.org/wiki/Supply-side_economics

Welcome to Finance & Fury, the 'Say What Wednesday' edition, where every week we tackle questions from you guys. This week the question comes from Jason; "My question is about investing with an Environmental, Social and Governance (ESG) / Ethical investment focus. Given their increasing popularity, do these types of investments have the potential to make the world a better place? Historically how have ESG/ethical investments performed in Australia relative to the market and what factors should be considered before investing in this space?" Today we discuss; What are Ethical Investments, and how do they work? Inclusionary v exclusionary managed funds; what types of companies are excluded when making their investment decisions, and what types of companies are included? The difference between 'Supporting' and 'Forcing' when it comes to the way managed funds impact the underlying investment companies' practices and what this might mean for you as an investor. What to consider when buying these types of investments. Do they actually meet your definition of ethical? You'd be surprised at some of the companies that are actually 'recognised as a responsible and ethical investment option' How diversified are you? The performance of these (like all ETFs/managed funds) depends on the underlying performance of the companies that they buy. How have ethical investments performed for the past 12 months? Over the long term? The impact of thematic trends Historical returns We talk about how these types of investments have the potential to make the world a better place, but the pros and cons are not what you might think. Supply drives demand Investment losses due to trying to change companies 'for the better' https://www.canstar.com.au/investor-hub/10-top-ethical-investment-funds/

Hi Guys, and Welcome to Finance and Fury. Today we continue to talk about investing in yourself. Think about investing in anything, you're doing something with the aim of gaining something out of it. This is why we went through the purpose and vision statement in the last episode. How to invest in yourself? And, how can you love your current job more? My experience: What did I start out with? How did I find what I enjoyed? How to learn on the job? How to narrow down what you care about? How to design your ideal career? What is reasonable when planning your future? Don't confuse a job with a career. Your career: What can you do to get more out of your job? Treat your education as an investment in human capital Using upward mobility factors Making yourself more valuable to employers Do you need to go back to university to improve your income potential? Have you considered informal education pathways? The more you learn the more you can earn Looking to change career? Thinking and knowing are different things Using your purpose to find the right career Narrow it down The financial setbacks: What are the opportunity costs? What are the total costs? How to deal with income changes? How long does it take? Is it financially viable? Ask yourself: What are your options at this point? What are the ways of achieving this? How bad will it set you back financially? Next episode we will be covering how to start your own business. Thank you for listening and if you have any questions let us know at the contact page here. Resources: AMP Education and innovation in Australia - https://www.natsem.canberra.edu.au/storage/AMP.NATSEM%2032%20Income%20and%20Wealth%20Report%20-%20Smart%20Australians.pdf

Welcome Finance and Fury the Furious Friday edition, and welcome to part 2 of Talking about the risks and the future of our economy In the last episode, we covered the future of our economy In this episode, we will explore economic subversion and internal reliance (threats from inside and out) The major points addressed are: What is subversion? Why is this done? Who can we learn more from? Who is Yuri Bezmenov? What is demoralization? Why does it take so long? What does the process involved? How is the media involved? What is ideological brainwashing? What is cognitive dissonance? How has good and evil been redefined as rich and poor? What level of wealth is seen as immoral? Is tax an effective behaviour changing factor? How does this affect children? How do they learn to consider other people's needs? How do we nurture resilience? What issues does the destabilisation of institutions create? What takes away the initiative and responsibility of individuals? What do unqualified politicians do for the government power structure? What does the welfare system do for the population? What are the biggest issues for Australians? How does the government act as a moral dividing line? What does normalisation look like? What does society eventually look like? Why is it ok to vilify small business owners? Why remove the incentive? What should you prioritise? Freedom or free stuff? Share this episode with your friends. Show them the effects of the wish for a socialist state. If you like this episode or if you didn't feel free to let us know on the contact page here. Resources: Yuri Bezmenov Interview: https://www.youtube.com/watch?v=y3qkf3bajd4 Social Welfare and Ponzi Schemes: https://financeandfury.com.au/furious-friday-could-social-security-be-the-greatest-ponzi-scheme-ever/ Taking control of your money: https://financeandfury.com.au/take-control-of-your-money-nobody-else-is-going-to-do-it-for-you/ Government Spending breakdown: https://financeandfury.com.au/say-what-wednesdays-shorten-vs-morrison/ Roy Morgan Research links: 2018 - http://www.roymorgan.com/findings/7504-most-important-problems-australia-the-world-february-2018-201803051043 2017 - http://www.roymorgan.com/findings/7249-most-important-problems-facing-australia-the-world-may-2017-201706231630 Concerns by voting - http://www.roymorgan.com/findings/7424-economic-issues-facing-australia-verbatims-march-2018-201804060723

Hi Everyone, and Welcome to Finance and Fury, the Say What Wednesday edition. Today we have a question from Daniel: The question is around cryptocurrency; Daniel has come across a fascinating crypto called Liven. The business model seems really sound, with the consumer being rewarded (in liven coins) for dining are participating restaurants. I wanted to get your thoughts on this. I pretty much agree with Daniel on cryptocurrency, I don't see it as a long term investment. In today's episode we address: Cryptocurrency and what changes the price? What is the future of prices for crypto? What is Liven? Who are the users and market participants? How does it work? What are the risks for individuals? What are the risks for businesses? Why don't governments like cryptocurrency? What are the main problems for Liven? Thanks for listening to today's episode, and thank you, Daniel, for the question. If you have any questions or want to get in touch, you can do so at our contact page here. Resources: White Paper: https://s3-ap-southeast-2.amazonaws.com/livenpay.io/LIVEN-WhitePaper(EN).pdf

Welcome to Finance and Fury! Today's episode we continue our miniseries which looks at the best places to invest in 2019… Turns out, one of the best places to invest in 2019 might actually be in, Yourself. Today's episode is the first building block for the next two episodes where we will cover off on the two routes of building wealth throughout your life; your career and starting your own business/side hustle Either way, it all starts the same. And this is what we will be covering today; what you need to do in your own life to work out whether starting a business or developing your career is the best thing to do. It all comes back to what your purpose is and what your personal goals look like. It's not just about making money, but also about being happy along the way. Today's episode will actually be somewhat of a summary of a previously archived "Steps to Success" episode. We talk about the importance of accepting responsibility, finding your purpose, building the vision of your life and then making it happen. I've put together a workbook too, which you can download for free to help you plot out your own purpose and goals, and start putting your action plan in place. It's super handy. Print it out and follow along with the episode. Take 100% responsibility: To be successful you need to be 100% responsible for your own life. Give up all excuses and stop playing the victim. Taking 100% responsibility makes life simpler. If you accept that you have 100% responsibility, therefore control you can become the master of your own success - the world doesn't owe you anything, you have to create it! Find your purpose: This is the path that will guide you along the way. This is where the workbook really comes in handy. Creating a vision: Get the vision right and start achieving it! Having a vision, allows you to complete a picture of your ideal life. Your vision should show you where you want to head and provide some motivation and focus to help achieve this. Life happens, there will always be setbacks but the best way of overcoming setbacks is keeping your long-term vision in mind and working towards this. Set your Goals: Goals are the 'building blocks' of your vision. Hone your Inner GPS – help fill in the gaps and reverse engineer some steps to build your ideal life In the next episode we'll be putting this in place through investing in your career or starting a business…but, the first step is to know you are on the right path.

Hi Guys, and Welcome to Finance and Fury, the Furious Friday edition. Today we are discussing the future of our economy. What is the future of the Australian Economy? Welcome Today's episode is on the future of the Australian economy. In today's episode we will cover a multitude of questions: What is the big deal? Firstly, What is the economy? Why is it so important? What would we do without it? Also, What are some issues with the Australian economy currently? How strong is the Australian economy? What makes it tick? Where do we sit in comparison to the world? What is currently going on? What the government is doing to fix the housing markets? What happened to the manufacturing sector? What are the warning signs of the underlying issues? What does regulation do? What are the future implications from current regulations? What does regulation do to Australia's economic future? What will the outcomes be? And finally, What can you do to look after yourself? Along the way, we explore all the in's and out's of these questions. In conclusion, it's not all doom and gloom. We are at a pivotal stage and Australians need to act in their best interest. We hope you enjoy the episode, please share this episode as much as possible. If more people hear this episode, more people will be able to act. Unfortunately, based around the Discrimination and Disability Act we can no longer put images displaying information about the episode. Tune in next week for more related content on the economy, focusing on economic subversion. If you would like to get in contact or if you have any questions, you can do so at the contact page here.

Welcome to Finance & Fury's Say What Wednesday Today's question is from Lucas, "Hey guess, just wondering if you think that flipping houses is a good strategy? Can you really make a living flipping houses?" Good question! Flipping houses has become very popular but it's not as easy as you think. The Theory Find a 'fixer up' property at a low price Renovate it. Spend some money bringing it up to higher standard. There are people who run courses on this – you spend $1 and it should increase the value of the property by $1 Sell it for a profit – Like magic! Sounds good right? Finding the property It's the same process for any property purchase (researching, etc): Research property Values, growth history, what work needs to be done on the property? Your situation Cap your price – Know how much you can afford Budget – do you have surplus cash in case renovations go over budget? Is it worth it? Look at potential gains – Minus costs in and out, along with interest, stamp duty, agent fees, legal fees etc. Timeframes – how long will it take? Does this work? Here are some examples. Buy something for $450k, with a 10% deposit (so, you'll need $45k plus other costs) Scenario 1 – $2 for $1 every spent Scenario 2 – $1.50 for every $1 spent Property Price $450,000 $450,000 Loan $405,000 $405,000 Purchase costs Legal fees, registration, pest inspection, etc. $2,500 $2,500 Stamp Duty (QLD) $14,175 $14,175 LMI (10% deposit) $7,938 $7,938 Total $24,613 $24,613 Renovation & ongoing costs Interest expenses - 8 months $12,150 $12,150 Renovation costs $80,000 $80,000 Total $92,150 $92,150 Selling fees Sale Value $610,000 $570,000 Agent fees, advertising $16,775 $15,675 Assessable Gain $67,850 $27,850 Taxes - CGT (If not living in and only income) $14,425 $14,425 The Bottom Line $57,037 $18,137 When it goes right: Property markets climb in under 12 months (there's no guarantees) You are experienced in property construction, renovations You're in a trade industry, you have friends in trades, and have the time to get the work done Risks: Overcapitalisation – spending more than needed Profits come from 'cosmetic' renovations Structural is normally not valued by buyers. For example – Replace foundations, rotted walls, etc. Your Experience and situation – there's lots of moving parts to get it done in a timely period How much of the work can you do yourself to save on costs? Is this going to be your full-time job? Getting finance for the project External factors If the property market goes down, you'll struggle to break even Council or Body Corporate approvals What if it doesn't sell? Can you afford the loan? Other Options Keep the place and rent it out for more income now Retain the property and refinance for more equity and invest elsewhere In Summary EVERYTHING needs to go right – it's hard to make a lot of money if you don't have much experience. If you have any questions hit us up here at the contact page

Hi Guys, and Welcome to Finance and Fury. Today I have Jayden with me for part 2 in the Mini-Series on the best investments for 2019 Last Monday we went through Shares, and whether it is a good idea to invest in 2019. Today we will look at investing in property in 2019 On today's agenda we have: Firstly, what constitutes a bubble, based around historical price rises and income ratios? Also, if you can't afford a property, how do you access property this year? And then, if you can afford a property, where do you go to invest? And finally, what is going to cause the property market to go up this year? And what's going to cause it to go down? Along the way we guide you through the options of what you could be doing within property. In conclusion, property is a long term game. There is plenty of opportunity if you know where to look. If you would like to ask a question or get in touch you can reach out through the contact page here. Charts and tables discussed today: The State of Property around the world: Years to Save a 20% deposit: Where to look for direct property in 2019: Chinese property investment in Australia: Resources: Herron Todd Property Reports Herron Todd Property Clock Michael Matusik – Where units and houses are sitting https://financeandfury.com.au/michael-matusik-where-houses-and-units-are-sitting-and-in-which-direction-their-prices-are-likely-to-move/