The concept of the Equity Risk Premium (ERP) is typically used in share market investments, but I believe investors should apply a similar approach to all investment decisions. To ensure investors are adequately rewarded for the risk they take, I like to think of it as the Investor Risk Premium. What is the equity risk …
Rohan Rajiv from the daily blog, A Learning a Day recently wrote “The definition of strategy that I use in my day to day is that good strategy is defining the right sequence of steps that helps us navigate trade-offs and achieve the end outcome.” This definition of strategy is a perfect fit when it …
In last week’s blog, I compared the financial and tax effectiveness of investing in property through your super (with borrowings) versus investing in property outside of super or sticking with the traditional approach of investing your super in an industry super fund, for instance (no gearing). I concluded that while the potential benefit of avoiding …
In the face of the cost of living crisis and high interest rates, many people have less surplus cashflow (income after expenses) at their disposal. They might have high expenses or large financial commitments that consume all their means. However, if you are fortunate enough to be in a financial position where you have strong …
Owning an investment property within a Self-Managed Super Fund (SMSF) is an appealing prospect for many due to the tax-friendly environment of super. It allows you to pay just 15% tax on rental income and up to 10% capital gains if you sell a property during the accumulation phase. If held until retirement, it can …
I want to dive into a topic we’re often asked about: property versus shares. More specifically, we’ll explore the question, “What level of growth does property need to achieve in order to outperform shares? Many people face this dilemma: should they invest in property or shares? Or, if they already own property, should they sell …
If you’re thinking about retiring in the next 5 years, it’s likely that you’ll need to make some key changes, either now or over the next few years. What specific changes are needed, depends entirely on your financial situation. However, there are several common areas that everyone approaching retirement should consider, which I discuss in …
It’s very common for parents to worry about whether their children will be able to afford to buy into the property market, and we get asked about this regularly. There are several complexities involved: some financial, and some more related to parenting choices. I’d like to share an idea that could work well for both …
One of the most challenging aspects of investing is figuring out if you should sell an underperforming investment or whether to hold and be patient. We’re often told to track investment returns closely and sell investments that aren’t performing. But the reality is, some investments just need more time. Charlie Munger, the legendary investor, famously …
CoreLogic reported that the total value of Australian property stands at an impressive $11 trillion, surpassing the combined worth of all listed companies on the Australian Stock Exchange by more than five times. Despite this staggering figure, financial advisors have typically concentrated their efforts on shares, bonds and superannuation, often treating property as an afterthought. …
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