For years, $100,000 was the “magic” number for annual retirement spending. However, after several years of higher-than-average inflation, $120,000 is now a more realistic figure. To fund that level of spending from age 60 to age 90, a household needs around $2.1 million in investment assets by age 60, measured in today’s dollars. A perpetual …
In 2023, I wrote that inflation and interest rates could remain higher for longer than most people expected. That view was based on 50 years of history showing that once inflation exceeds 8%, it usually takes a decade or more to settle back down. Underlying inflation subsequently fell from around 4% in mid-2024 to a …
Our approach to constructing investment portfolios is best described as value-aware: investing in high-quality assets when they are attractively priced. Quality determines whether an asset or asset class is worth owning. Price determines when to invest and how much. Value-aware investing requires assessing these factors separately including accurately estimating an assets intrinsic value to determine …
It’s been fascinating to watch how differently asset classes have performed over the past few years. Share markets have generally delivered strong double-digit returns, while others, such as unlisted commercial property trusts and residential property in Melbourne and to a lesser extent, Sydney have really struggled. This is nothing new, of course. All investment markets move in cycles, and a long-term investor should expect periods of …
I have written about cash flow management several times over the past decade. The reality is simple: you cannot build wealth unless you spend less than you earn and invest the difference (It is the first element in the wealth formula). That is why cash flow management is probably the most fundamental discipline to master if you …
Historically, the big difference between upgrading your family home and preserving borrowing capacity to buy an investment property was negative gearing. Home loan interest is not tax deductible. Investment loan interest, by contrast, generally is. So, from a tax and cash flow perspective, borrowing to invest in property was often more attractive than simply spending more on your …
I have said before that there are only a handful of financial decisions that truly move the dial over a person’s lifetime. The reality is that if you get those decisions right, most of your financial outcomes will take care of themselves. That is why I originally wrote Investopoly and have now completely rewritten it as Wealth by Design. …
Often, financial advisers often manage their own money differently from the clients they advise. After more than two decades working with both advisers and investors, I thought it was worth sharing some of the patterns I have observed. Before doing so, I want to be clear about my intention. This is not intended to be a …
Warren Buffett’s business partner, Charlie Munger had a guiding philosophy on checklists: “No wise pilot, no matter how great his talent and experience, fails to use his checklist.” Investing is no different. A good checklist removes the need for daily judgement calls, takes emotion out of the equation, and replaces gut feel with process. That is the same …
For decades, most people are conditioned to work hard, save, invest, and keep building. But for those who are already on track financially, the bigger question is not how to accumulate more wealth, it is how to avoid wasting the years when that wealth is most valuable. Knowing when to ease back, and how to do it …
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