Investment bonds are promoted as tax-efficient investment solutions, particularly if investing on behalf of children. In this blog, I consider the advantages and disadvantages of these bonds and discuss alternative investment options for consideration. In short, we almost never recommend using investment bonds. Here’s why… What is an investment bond? An investment bond is a …
As investors, we gain invaluable insights by experiencing various markets and events, and by reflecting on our actions—those we took and those we didn’t. I firmly believe that experience is the key factor in preventing costly investment mistakes. Hence, I dedicate time each year to ponder the lessons provided by the market in the preceding …
The recent decision by the RBA to raise interest rates may have surprised some people. While some argue that rates have already increased significantly and coupled with rising living costs, this could eventually control inflation, it is important to recognise the persistent threat that high inflation poses to an economy. Furthermore, central banks aim to …
Many people face two financial planning challenges. Firstly, their projected super balance may not be enough to fund their desired living expenses in retirement. Secondly, they would like to enjoy the flexibility of being able to reduce working hours (or even retire in full) in their 50’s. Often, the solution to these two financial …
Many people can be very focused on repaying their home loan in full before they begin investing. They are so averse to debt that they cannot envisage doing anything else until their home loan is gone. However, often this isn’t the best approach to take. At some point, investing is more important that debt reduction. …
Warren Buffett’s long time business partner, Charlie Munger, who incidentally, will turn 100 in January next year, famously said, “The big money is not in the buying or the selling, but in the waiting.” The more investing experience I accumulate, the greater the appreciation I have of how true this statement is. It is interesting …
Engineers know that for a building to remain structurally sound for many decades it must have strong foundations. It doesn’t matter how good a building is above the ground, if the foundations are substandard, the building won’t last. The same is true for building wealth. There are several foundational matters that investors must optimise before …
Now that home loan interest rates have risen by 4% over the past 13 months, is it still worth investing your surplus cash flow, or should all cash flow go towards repaying your home loan? Many of my clients invest some surplus cash flow in the share market each month. This has been very easy …
The ‘great Australian dream’ has always been to own your own home, debt free. It gives you financial security, and over the past three to four decades, homeowners have enjoyed rising prices which has helped them build wealth. But is it always a good idea to own your home, or is renting better? Put differently, …
If you are considering borrowing to invest in a quality property, I would like to remind you of three important considerations. Firstly, it is my thesis that property investors must be more selective about which property/s to invest in. In that past, investors have benefited from a rising tide (driven substantially by rising borrowing capacities), …
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