Finance & Fury Podcast

Welcome to Finance & Fury, the Say What Wednesday Edition, where every week we answer questions from you guys, the listeners! This week’s question comes from Gabriel; “Hi Louis, I listened to an episode on NPR on the Chinese Social Credit System and thought I'd like to hear your thoughts on it. Is it a dystopian future? or an unavoidable path that started with the loss of privacy on the internet?" That’s a great question, so today we’ll run through the potential downfall of China, what this is social credit system, why they are doing it, and looking at what the future holds in store as well.     The Social Credit System is a national reputation system being developed by the Chinese government. Announced in 2014 with limited implementation occurring this year The plan is to have this up and running fully by 2020 with the intention to standardise the assessment of citizens' and businesses' “credit”. Credit is a combination of economic and social reputation We have ‘credit’ scores based around lending, b

In today’s episode, Jayden interviews Michael Matusik, an independent housing market analyst. Michael aims to be a voice of reason amongst the distortion and in this episode, breaks down the Australian Property market explaining the property clock. He explores each capital city in Australia, discussing at which point in the cycle prices are sitting and where they head from here.

Welcome to Finance & Fury’s Furious Fridays… This week we continue looking at the EU. If you didn’t catch last week’s episode, you might want to check it out here. It explains what the EU is, and what their role in Europe actually looks like. This week we dive a little deeper and look at the two issues faced by the countries who are considering leaving the EU - Loss of sovereignty & Immigration. Loss of sovereignty A lot of nations (Hungary, Czech Republic, Slovakia, Poland) lived under brutal authoritarian governments – for most of the 20th They swapped Nazi rule, for Soviet rule and now the EU rule The Internet Censorship Bill is a great example of loss of sovereignty Article 13 – the new Copyright Directive involves the creation of a crowdsourced database of "copyrighted works". Platforms such as FB, Youtube etc must take this into account and block “copyrighted works” from being posted on their sites. Billions of people around the world will be able to submit anythingto the blacklists There is

Welcome to Finance & Fury, the Say What Wednesday edition, where we answer your personal finance questions each week. Today’s question comes from Tara;  “Hi Finance & Fury, love the show! I was wondering whether you would be able to provide advice on the best way to invest $1,000 - $2,000? Would love to hear your suggestions?” – Tara Awesome question and thanks for getting in touch! Not technically allowed to provide ‘advice’ – but I can give a general outline on what to look for when starting to invest. Starting to invest is hard - especially when you don’t have 10s or 100s of thousands of dollars. Hard to get diversification Hard to get low cost Hard to get in based on minimums Where to start What are your goals? How long is it for? – Investments should be made for the long term. If you’re at a timeframe under 3 years, I probably wouldn’t suggest investing at all Will you need to access it at any point? – If yes, how long? If you need to access the funds in the short term (3-5 years) somethin

Welcome to Finance & Fury. Today we’re back talking again about property…and more specifically, buying property overseas. Some Australians have given up on the dream of buying property in Australia due to Australia’s high property prices. An increasing number of Australians, including Millennials, are investing abroad with the United States as the most popular destination. They’re priced out of the market here, and are looking to other areas and other countries for options. Property prices are still 32.4% higher compared to five years ago. There has been a 29% increase in Australian residents purchasing properties abroad.   Pros Cheaper house prices, which makes it easier to get into property based around the deposit requirements Better yields on property overseas Australia ranges from 2% - 5% Philippines from 6.13% A.E. from 5.19% Costa Rica from 7.48% Indonesia from 8.61% Provides diversification outside of the Australian market   Risks Finding the right property, knowing the area that the pro

Welcome to Furious Friday where we look at misconceptions in the media about the economy There is a lot of talk about fears that the European Union (EU) will fall apart – That this will cause a financial crisis Will it? A lot of people are saying that the financial markets will collapse if the EU were to break apart I wanted to break a few things down What is the EU and what does it do? Why are the member nations considering leaving? What will be the effect on financial markets and the global economy? What is the EU? The EU is a geo-political entity covering a large portion of the European continent. It is founded upon numerous treaties and has changed quite a bit over the years In 1957, six core states founded the EU's predecessor, the European Economic Community (EEC) (Belgium, France, Italy, Luxembourg, the Netherlands and West Germany). Trying to create a common market – European Coal and Steel Community 1999 – Monetary union was established – 2002 was in full effect 19 members at the time

How can you pay off a mortgage with debt? Velocity banking and Offset accounts This question comes from Tom a podcast listener. He asks “Just wondering if you have ever used Velocity banking at all to pay down debt quicker?” In this article, we will explore what velocity banking is as well as some alternatives to paying off debt with other debt available in Australia. So what is it? And why haven’t we heard about it? It’s a Strategy of Using a Line of Credit (LOC) to pay down principal on a loan. Typically used in the US. How does velocity banking or ‘chunking’ work? The LOC becomes your income and expenses account. You put your pay into it and pay all your expenses from it, including your mortgage repayments. You use the LOC to pay down your loan through “chunking”. What this means is if your income is greater than your expenses, the LOC should build up by the difference every month. If your household income is $8k p.m. and your expenses (inc mortgage) are $6k, the LOC should build back up by $2k p.m. Once t

Welcome to Finance and Fury…today we have Jayden Vecchio from Hunter Galloway on the show, talking to us about 5 game changing tips for buying property especially for those who are looking to build a a decent property portfolio.   5 Tips for Building a Property Portfolio 1. Have a plan Many property investors think buying real estate as nothing more than sticking some money into an asset that is guaranteed to go up.  ‘Just get a foot in the door and you’ll make money from property’, they say. So, what about those investors that got their foot slammed after investing in mining towns? Or bought off the plan purely for tax benefits? Successful property investors have an investment plan in place. Like a business plan, they take time to research the market, educate themselves and deeply understand the numbers.  Do you have a goal of building an investment portfolio? As the saying goes, a goal without a plan is just a wish.  2. Don’t Follow the Crowd – Contrarian Investment Over the past year, it has felt like o

Welcome Finance and Fury’s Furious Friday episode. Today we’re answering the question we asked on Wednesday about Labor’s polices and their promises to lower housing prices/increase affordability. If you haven’t checkout out the episode, it’s probably worth while just to go back and have a listen as it gives a bit of a background on the history of the Australian property market, why the price increases have been happening over the last 20 years, and some alternative ways to create a solution. Labor’s plans for housing affordability Increase financial stability, reduce homelessness and boosting jobs (this is mainly straight from their website). Both parties are running on similar issues here. They’ve done their demographic research, but they have different ways of doing things. What Labor have proposed (8 policies in total) A big ones - Reform on negative gearing and capital gains tax concessions Limit future negative gearing concessions to new housing – you will only be allowed to negatively gear on a new b

Welcome to Say What Wednesday! Today’s question is about Labor’s plans to help with housing affordability. To answer that properly, I will spend today going through some underlying factors impacting Australia’s property market, and what affects housing affordability and how it works in the long term. I will actually answer the question about Labor’s proposed policy on Friday. At the end I’ll run through what is probably one of the only ways to lower property prices sustainably in the future – IMO anyway. The History of Australia's Property Market Yes, a dry topic but stick with me, it’s worthwhile understanding what’s been going with property over the last 20 years or so. The Big Three Population size and growth 1901 at Federation, we had a population of about 4 million - High growth from the gold rushes up until then Population now – 25,122,747 Growth of 6 ¼ times over 100 years America – from 77 m in about 1900, to 326 m now which is growth of around 4 times Why has our population grown by so much? Gr

Welcome to Finance & Fury. Today we’ll be running through some alternative assets – precious metals, like Gold and Silver.  We’ll talk about How they work How they fit into an investment portfolio   Gold Price Silver Price Whilst they are very separate assets to each other, they work in a similar way. There has been increased volatility with shares in recent months, and this has led to an increase in gold and silver prices. They are considered an alternative growth investment; when other asset classes like shares, property and even bonds are doing badly, gold and silver are considered a “safer” way to invest.   History In between the periods of barter and modern-day credit cards and paper money, gold and silver (plus other rare commodities) were used as a medium of exchange, or currency. This however, was inefficient. In the past your wealth, and the government’s wealth was measured in gold, by weight. Gold rushes – in 1851 people flocked to the Victorian town of Ballarat If they found gold, they co

Welcome to Furious Friday! I recently saw a news article about Australians being “promised new laws to slash up to $832 from their annual electricity bills” This article outlines; This is a “federal government move to toughen rules for big energy companies and demonstrate action on household costs”. Outline new laws “to set a default offer price for millions of consumers…response to calls from regulators …to put pressure on suppliers”. The Government “promises the default offer will ensure customers are not being "exploited" because they stay on the standing offer from their suppliers rather than shopping around for a better deal”. “Opposition Leader Bill Shorten revealed plans in August for simpler bills with "capped" prices under a Labor government, at the same time former prime minister Malcolm Turnbull outlined similar measures”. "Returning to the table to negotiate with Labor a bipartisan energy policy that will support the growth of renewable energy, bring down carbon pollution and bring down electric

Today, we’re talking about the Trump economy, and the state of the US market. Love him or hate him, America is doing better than ever – Trump just can’t stop winning when it comes to a lot of political and economic factors. In his first 2 years in office President Donald J. Trump has achieved results domestically and internationally for the American people – he is the first President in my lifetime that seems to be putting his own countries interest first rather than signing a bunch of international pacts that look after other countries more so than his own. The American economy is stronger, American workers are experiencing more opportunities, confidence is soaring, and business is booming. Why is this going on? What we hear in the media is that America is going through so much trouble President Trump has put the American people first and made government more accountable – he is one of the most transparent Presidents in America’s history. I will focus on the economics in this episode, but with that said, Tr

Welcome to SWW …on a Monday … because we have been receiving a LOT of questions about what’s happening with this so-called “market crash”, why has the share market dropped so much, should we sell to cash to avoid massive losses?   Here’s the back story The Australian share market has wiped out all its gains from the last 12 months Some say we have entered a technical "correction", plus Following a massive sell-off on Wall Street overnight It has fallen by more than 10% since its peak in late-August until October There were days last week when it was dropping 2+% in a day   Why are markets tumbling? What America does, we follow, and so does the rest of the world The local market's substantial decline comes after the Dow Jones index fell more than 600 points – this wiped out all its gains since January - 10 months’ worth New York's benchmark S&P 500 index - down 3%, Nasdaq (tech heavy) - down 4.5% Australia is still faring better than some others when it comes to one-day losses; Tokyo's Nikkei (-3.4%), S

Going to say it: Might be controversial – ‘But is it okay to be white’? If you have seen - Pauline Hanson proposed an "It's OK to be white" motion in the Australian "Deplorable rise of anti-white racism and attacks on Western civilization".  It was defeated 31-28 by opponents who called it a racist slogan from the white supremacist movement. Today I want to go through this in detail and look at the longer-term economic impacts – and it will have to do less with race than you think. Where does the story of neo-Nazis being behind this come from?   Media claims it is from David Lane – American Neo-Nazi – Said to come from his “14 words” statement ‘We must secure the existence of our people and a future for white children.’ I did a fair amount of reading on his other work and couldn’t find anywhere ‘it’s okay to be white’ The “14 words” statement is clearly not the same thing So, where does it come from? It's OK to be white (IOTBW) is a slogan from 4chan in 2017 – self-proclaimed ‘shit posters’ They did it

Welcome to Say What Wednesday! Today’s question comes from Katherine. “I heard a story on Hack the other day about Sweden becoming a cashless society – Can you explain this further? Is it a good thing and should we be looking at doing the same thing in Australia?” Sweden going cashless: This is not a government regulated change – it’s based on the behaviours of the population. Individuals are choosing “cashless” over cash transactions Already considered to be the most cashless society in the world. More Swedes have access to a payment card than to cash, according to data from the country's central bank, Sveriges Riksbank, or simply Riksbanken. And the overwhelming majority of the nation - 85% - have access to online banking. How does it stack up? Circulation of notes and coins as a percentage of gross domestic product (GDP) Sweden: Just 2% of the total value of transactions in Sweden consist of cash Australia: About 4.2% of GDP Cash transactions in stores Sweden: 20% of payments in shops are made in ca

Welcome to Finance & Fury! Today’s we’ll be looking at how to start, once you’ve set your financial goals. This is the starting point for anyone looking to get a plan in place. We have talked about goals in past episodes, but we haven’t really gone into much depth. Goals and Reality – Setting goals and then making it a reality So, where do you start? If you have your financial goals in place that’s a great start. It is about having a strong foundation for the plan and covering the basics. What are the basics to start a plan? We will look in depth at each one of these and what to do with them Budget Debt Management Personal Balance sheet The Foundation Building Blocks Budget: Cashflow is King Cashflow Components - Income, Taxes, Net Cashflow Gross income - What you get from employment or investments Taxes (what is taken out) - Based on marginal tax rates which progresses in brackets Tax Free Threshold - the first $18,200 at 0%, then the next tax bracket is 19%, etc Then, you need to add on the M

In today’s Furious Friday episode, we’re going to talk about one of the most dangerous things threatening our financial freedom – the notion that we are simply just groups of people. It comes back to a lot of economic theory and the use of models based on aggregates. This crosses over with the politics of grouping – ‘The Poor’, ‘The Rich’, for example. Tribalism and group preferences are dangerous – It’s a tool of distraction. The narrative that things aren’t going well because you are oppressed, or unlucky. It breeds hate, encourages divisive tactics in politics. It breeds helplessness – if someone tells you over and over again that you’re a part of a disenfranchised group it becomes a self-fulfilling prophecy The danger comes in the solution which focuses on equal outcomes, and how to optimise society rather than people improving their own situation that make up that society. Not based on equal opportunity. Where you start has little to do with where you end up Individuals forms groups – SO my optimising

Welcome to Finance & Fury’s ‘Say What Wednesday’! Today’s question is from John; What are the tax implications of investing in shares, owning, holding, selling, dividends etc, does this vary to ETF, LIC etc? Is tax payable on the change in value year on year, or only when a profit or loss is realised? And does this change if they are held in a company or trust?   We’ll take a look at: Types of taxes Structures - Managed Funds, Shares, LICs and ETF Two types of taxes Income Tax – and Franking Credits depending on the investment Franking Credits (FC) – helps avoid a double taxation. Tax is paid at company level and then calculated alongside your personal tax to ensure tax isn’t being paid twice and that you’re paying tax on that income at your marginal tax rate rather than the company tax rate. Capital Gains tax   Income Tax Companies - Shares/LICS – Same thing really Shares/LICs pay dividends – the board sets the FC levels Shares – vary regarding dividends and franking credits LICs – Typically se

Welcome to Finance and Fury. Before I start I want to say a massive ‘Thank you’ to our listeners. We cracked 150k downloads in the first 6 months which is phenomenal. Also, thank you to everyone who has taken up the course – I want to extend the promotion to another 50 people as a Thank You for everyone’s ongoing support. Just enter the code ‘faf01’ for 50% off at the checkout. Here's a link to the course: https://financeandfury.com.au/learn-finance/ Today we’re talking about the AUD plummeting to a two-and-a-half year low - 70.79 US cents (approx. at the time I’m recording this episode) The Aussie dollar could be heading to the “mid to high 60s” by next year, experts say. The dollar is now about 13 per cent below January’s three-year high of 81.36 US cents. Is it USD rising or AUD crashing? It all depends on what the domestic country is doing in relation to the foreign country of comparison In comparing the AUD to the USD it is the rising USD more so than anything The AUD is going well in relation to the