Blog Archives

How to turn your work-ability into your biggest asset

My husband Ray and I are your typical Aussie mum and dad property investors; our three children are also young investors (in their 30s).

Back in the 1980s, getting a deposit together to purchase a house was arguably as difficult as it is today. My husband and I started saving on our engagement. Our parents were of humble means – certainly not in a position to help out. There were no maternity/paternity leave entitlements, no child care facilities and we relied on one income for many years after we settled into our home.

The Government at the time attempted to solve the problem of housing affordability by providing a first home buyers grant (a means tested cash bonus to assist with the purchase). Although our individual salaries were not particularly high, when combined, Ray and I were not entitled to the grant.

So we worked five jobs between us. When our peers were out dancing at bachelors and spinsters balls, we were the ones working in hospitality, serving them food and drinks. They were driving around in new cars. We drove second hand cars and once we bought a new one, we owned it for 10 years before buying a new one. Our peers were travelling around the world and going to rock concerts. I regret to say I never attended a rock concert. I remember the only musical I went to see was Jesus Christ Superstar.

Economists are always predicting a drop in the property market and investing means accepting some risk. When we decided to buy an investment property, our parents, friends and family, actually tried to talk us out of it! Don’t do it, it’s too risky, you can’t afford the loan repayments… What if you lose your job, what if you fall pregnant or what if there is another GFC, or a war?

Harry Triguboff, Australian billionaire real estate property developer was interviewed on 60 Minutes recently. He said, “Ordinary mum and dad investors are battlers and not millionaires.” In my experience this rings true. Aussie mum and dad investors contribute to rental availability in the market. It stands to reason that the more investors there are, the more rentals there will be available, which assists with rental affordability.

On the same program Tim Gurner, a young property investor turned successful developer, was also interviewed. Interestingly he recommended exactly what we have practiced. Go without the luxuries, work hard and have a goal. While it has been muted that he received a leg up with a deposit from his family, parents can assist in other ways, such a guaranteeing a loan or providing a deposit bond.

When we criticise the lifestyle choices of millennials, are we simply being critical of young people? My children started in the property market as teenagers. We did not provide them with any funding whatsoever. We set the example; they took the risk, budgeted hard and were devoted to their jobs.

The conversation should be about choices, not criticism. Taking a year off and travelling the world on a working holiday… well good on you, you’re only a year behind in savings, and possibly a few steps behind (or ahead) in your career. The occasional smashed avocado and a latte over breakfast won’t destroy your life savings either. Going to university will put your savings back several years and adds a HECS to your financial commitments in most cases, but you’re positioning yourself to catch up as your career advances.

A request under FOI revealed that over the past eight months (August 2016 to February 2017) in NSW alone foreign investors paid a staggering $76.6M in stamp duty to the state government, compared with Australian and dual nationals who paid almost $3.8M. While it’s obviously a great tax revenue stream, the disparity in the figures are symptomatic of local investors losing in their bids to secure property.

Doing something about housing affordability is problematic. Should we make it easier for young Australians by offering investment grants, allowing first home buyers to use their superannuation for a deposit, or further limit foreign ownership of Australian real estate? All of these ideas are debatable, with potential for unintended consequences. Certainly providing better information on budgeting, saving and investing would help educate the next generation of buyers. At present the real winners in the property market are the banks, property developers, fund managers, real estate agents and the state governments who all benefit from high prices.

My generation, the baby boomers, are often held up as a scapegoat for the affordability crisis. In my family we envisage there will be no government pension by the time we retire, so we are providing for ourselves through our property investments. Despite the media focus on negative gearing, its tax advantage doesn’t benefit us significantly. Here are some final considerations that are often overlooked when making a property investment:

  1. Work hard, taking on an extra job when required can make a difference
  2. New APRA rules mean a 20% deposit is required for an investment loan
  3. Banking institutions charge higher rates for property investors (and even higher interest rates for self-managed super funds)
  4. Factor in the significant cost of stamp duty (paid to the state government on purchasing)
  5. Understand the ongoing body corporate fees (if investing in an apartment, unit or development with shared common property)
  6. Budget for maintenance costs
  7. Negative gearing only applies to tax paid on expenses involved in holding your property
  8. Factor in capital gains tax when selling

At some level we are all working for a secure future. What have you done in your world @work to set yourself up for the future?

Tagged with: , , , , , , , , , , ,
Posted in Professional Support, The world @work

Attitude’s the biggest threat to the world economy?

Experts at the World Economic Forum release yearly updates assessing the biggest dangers facing the world economy. Environmental concerns have jumped up the list and now global warming tops economists’ concerns.

Last month I attended an Australian Credit Conference hosted by a large global credit rating agency. The event was well represented by investors and large business organisations. With a number of questions put to the audience, everyone had an opportunity to vote on the topics offered. The popular choice was along the lines of: “What do you think is the biggest threat to the Australian economy today, the cost of carbon reduction or the environmental issues associated with greenhouse gas pollution?”

At the risk of being controversial, it was shocking to me that the business community, as represented at the event, thought changing our (dirty) energy habits would be more disastrous economically than climate change. I was quite surprised that the majority of attendees felt our biggest economic threat is the effect of carbon reduction measures. Surprised, because I assumed those in attendance to be well-informed people with access to plentiful resources about current environmental concerns.

While our business leaders need a crash course in environmental awareness – I’d like them to sit through Al Gore’s An Inconvenient Truth or a screening of Leonardo DiCaprio’s documentary, Before the Flood – I was left wondering whether the majority of Australians in the world @work can see the effects of climate change as it is happening right now? Polls show increasing support from people at grass roots level on a range of environmental issues, including a carbon tax and green energy, but change begins with positive leadership, agitation and support from the community at large.

The potential cost of doing nothing to halt the damage to our planet is incalculable. However, it seems obvious that funding for renewables and other innovative carbon reduction energy solutions is being stalled by vested interests. It took a tweet from Tesla’s Elon Musk (who has famously offered to solve South Australia’s power problems with battery technology in 100 days) to fire-up the State Government and engage the Federal Government in the conversation. It was encouraging to see expressions of interest from local competitors in the battery market, but it’s going to take more than an ex Vice President, a Hollywood actor and an entrepreneur to kick-start a (much needed) renewables boom.

The World Economic Forum says failing to mitigate climate change will likely have a bigger impact globally than the spread of weapons of mass destruction, mass involuntary migration, predicted water crises and a severe energy price shock – Australian consumers have experienced significant energy cost increases year on year, abolishing the Clean Energy Act notwithstanding. Instead of funding massive foreign owned coal mines, as the Queensland Government-Adani partnership proposes, or championing newer but less responsible energy sources, such as coal-seam gas (fracking was recently banned in Victoria), let’s invest in the industries where local businesses and communities also have a future. I’d love to see our manufacturers of solar panels, wind farms, battery cells and other alternative innovations receive most of those investment dollars.

Tagged with: , , , , , , , , , , , , , ,
Posted in Professional Support

6 blogging brainstorming ideas

Recently my colleague said she wanted to write a blog, but she had no ideas for a topic, how she would structure her thoughts and where to even start?

Blogging gets people talking. When we write about what interests us and what we know, we share our thoughts and invite others to engage in the conversation. Social networks are built on two-way communication, so blogging can actively encourage an exchange of ideas.

So how do you write a blog and how do you come up with material that is interesting?

Here are 6 strategies to get you started and help you succeed.

  1. If you are an avid reader, that’s great, pick a topic that interests you! Books, magazines, news articles, discussion groups… in print or online, you’ll find plenty of inspiration.
  2. If you watch current affairs, there’s plenty of material. Take notes and track comments on Twitter.
  3. Never let a good idea pass you by in the middle of the night. I have a notebook and pencil on my bedside table for those lightbulb moments.
  4. Listen to what your customers (clients and candidates for me) are saying, problem solve the issues, then share.
  5. Look at the stats on what other people are writing about. Google Analytics research is excellent for what’s trending, as well as niche topics.
  6. Share your experiences. People love authentic stories.

Encourage people to comment and always respond to the comments (positive and negative) you receive. You may start a thread that leads to another idea for your next blog from those responses.

While I’m giving away ideas, here’s some I’ve already put on my list:

  • How to be a confident public speaker
  • What is it that engages an audience?
  • All about my community
  • What inspires me about technology
  • Are you brave enough to say what needs to be said?
  • What makes a good conversation?
  • Books I want to write
  • What I am passionate about
  • How do I get my big idea funded?

After thinking and deliberating over my blog topic for many days, things have taken shape. OK, now for the blog…

Well, I’m done here, so will have to wait until next time to tackle one of the topics above, but I challenge you to write on any of those topics as well.

If you do write a blog, please comment on this article to let me know. I’d love to hear your point of view.

Tagged with: , , , , , , ,
Posted in Professional Support, The world @work