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The Finance Show With Joe
Welcome to the Finance Show with Joe hosted by It’s Simple founder, Joseph Daoud. We chat about the financial issues facing ordinary Australians from managing the cost-of-living to investment strategies in order to help you make more informed financial decisions.
Join us as we discuss finance, mortgages and home buying in Australia!
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The Finance Show With Joe
S2E2: Property Prices, Government Spending, and How You Can Get Ahead
In this week's episode of the Finance Show with Joe, the boys chat about where you might consider buying outside of Sydney and Melbourne, tips for getting ahead, and whether government incentives are helping people get out of financial funks.
This podcast is intended to provide general information (and hopefully entertainment) only and the contents of which do not purport to provide personal financial advice. You should consider seeking independent financial advice.
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Welcome to the Finance Show with Joe. He's Joe, I'm just some schmo, and today we're going to talk about investing outside of Sydney, what you can do to save money and what the government got wrong this week.
Speaker 2:Michael, as always, thank you so much for hosting the Finance Show with Joe. Look, it's patent pending. We're not stuck on the name or anything like that, but I just want to preface everything that the advice on this channel is general in nature and if you do need specific advice, please contact the financial advisor or your financial specialist. I want to go heaps raw on this episode. All good, we're keeping that in there. Yeah, absolutely, jesus Christ. No, we've got a lot that we need to get into. And, michael, you brought up a very interesting question to me off camera and that was the best places to invest in outside of Sydney.
Speaker 1:Yeah, because that's all I hear about is Sydney, sydney, it's so hard. It's this, that and the other, but there's some cute new little suburbs you can find, but there's got to be other places, right.
Speaker 2:Outside of Sydney. Yeah, there's definitely places outside of Sydney, so Sydney is extremely oversaturated right now. We've got the highest population, I think, in New South Wales and then Melbourne has Melbourne's actually got a higher population as a CBD than Sydney does, but the state of Victoria still has a smaller population in total, those two suburbs. That's where you're going to find the most demand, demand, demand and obviously with restricted supply that we mentioned in last week's show, it's harder to break into the market in these two cities, especially if you want to buy something that's going to grow in significant value. So there's a few cities that I want to really highlight on today's episode as places you could look at. I'm not saying should, that's specific financial advice. I'm saying could, because I need to cover my ass and make sure that everything insurance-wise is good. The first city I want to mention is perth. Now, have you noticed something in the last couple years in regards to sports? There's been a lot more events occurring in perth. We had a state of origin there.
Speaker 1:Uh, we had a wwe event, the elimination chamber in perth I have noticed that as a nation, we just seem to be making things happen at Perth broadly, or trying to make things happen at Perth because it's on the arse end of Australia. It's the only thing over there, but it could be something.
Speaker 2:Okay. So the reason that is is because Perth is on the same time zone as China. Oh, I imagine that would be convenient for international trade, right, extremely convenient. And, funnily enough, this is 2024. We've only just discovered this 2024, the year of Perth. But Perth is extremely interesting as a city because we've seen Perth go through booms before. If you remember, mid-2000s, mid-2010s, there was a massive mining boom.
Speaker 1:I was like, not even double digits yet.
Speaker 2:We saw properties go from $600,000 to a million dollars, $1.1, $1.2 million. And then once China said, oh no, no, no, we've got enough minerals, we don't need you to export that much, and iron ore copped a massive hit, right right, the property values in Perth started to plummet. So you had people purchasing houses in Perth for $2 million. They had a mortgage of $1.5 million and then on the other end of it, their property value all of a sudden halved and their property was worth $1 million.
Speaker 1:So they had a $1.5 million mortgage on a $1 million house, so it was basically like what happens to mining towns, but this is a major city.
Speaker 2:So it was a major city. So Australia kind of looked at it and they go. We need to invest in this city outside of mining and we need to make it a cultural hub. We need to start investing in it and we need to start putting more into Toulouse and Perth so this doesn't happen again. So even if people are moving there for mining, if there's a mining collapse, the property values there won't collapse like they had in the past.
Speaker 1:It's kind of like what the UAE are trying to do diversify away from raw materials.
Speaker 2:That is the perfect example. Okay, you are a genius, so it's exactly what Dubai, abu Dhabi, ras Al Khaimah have all done to be able to hey you like that one, ras Al Khaimah, I learned about that one recently.
Speaker 1:Say that again.
Speaker 2:So that's a casino area that's being built in Emirates. We'll get into that on another day. But in Perth specifically, you're seeing a lot more culture being invested in the market over there. And why not? You go to the beaches there and you have the most beautiful sunsets. It's not densely populated. So there are serious, serious pockets of investment over in Perth, over in WA, that you can invest in. You can buy dual lock houses. So what I mean by dual lock? You're buying a house with a granny flat attached to it where each property is making you significant rental income, right, okay, where each property is being rented out and I'm talking theoretical now significant rental income, okay.
Speaker 2:Where each property is being rented out and I'm talking in theoretical now $500 a week for one property and the other one is $450 a week. So in total you're making about a thousand bucks a week in rental income. That's $52,000 a year, right. These properties are going for about 750 to $800,000. Your rental yield is somewhere between seven and 8%. If you're investing in Sydney or Melbourne, your rental yield is somewhere between 7% and 8%. If you're investing in Sydney or Melbourne, your rental yield is somewhere between 2% and 3% with the property prices at the moment. So you can find opportunities in WA, in Perth, in the suburbs surrounding Perth, where you can make some serious money. And the awesome thing about Perth is the city was built to hold about four times as many people as it has right now.
Speaker 1:Herd traffic's great in Perth. Yeah, it's fantastic.
Speaker 2:You can get from point A to point B in 20 minutes. Everything is 20 minutes away. It's like Alexandria only as a city. Everything is 20 minutes away. Right, right, right. So Perth is a really great place where people should start looking for investment opportunities because the capital growth it's still growing there. You're still seeing suburbs around grow by 10, 15% over a year, which is great. I'd love to make 15% more money every year and then your properties are positively geared or close to being positively geared, even with these high interest rates. The issue is we don't have a lot of exposure. Are positively geared or close to being positively geared, even with these high interest rates. Okay, the issue is we don't have a lot of exposure, so people are like oh, where's that? The truth is, flights are expensive to get there.
Speaker 1:Yeah, they are.
Speaker 2:It costs me more money to get to Perth than it does to get to bloody Detroit, michigan. A flight to Perth is like three grand, to get to Detroit is like two. Like you know, it's just, it's just insane. But my advice is okay, as general as it can be have a look in Perth. Another area to look in and this area was undiscovered is Tasmania. Oh yes, so the reason why I like Tasmania so much and I've harped on about Tassie before, I've done numerous podcasts- They've got a footy team now.
Speaker 2:Yes, they do. It's because of immigrants. No, but the main reason why actually Tasmania is a great place to invest in is because of immigration, because if you want to become a permanent resident in Australia, you have to complete rural work. Okay, there's an 18 month rural work rule that you need to complete in order to become a permanent resident. Yeah, you've got to work on a farm or something along the lines of that. The cool thing about Tasmania is Hobart and Launceston are considered regional CBDs, like you're in Hobart. It's bigger than Wollongong or it's about the same size as Wollongong, so it's not too small of a suburb, okay. But if you work five minutes outside of sorry, not Wollongong, you of a suburb. But if you work five minutes outside of sorry, not Wollongong, you work five minutes just outside of Hobart, or you work five minutes just outside of Launceston, you're considered to be doing your rural work.
Speaker 1:So you don't have to go to Wagga, wagga or something.
Speaker 2:No, and a lot of the Chinese immigrants that are moving to Australia, a lot of the Japanese, a lot of the South Koreans, a lot of the Lebanese as well, and a lot of the Greeks have figured this out recently, so they have a housing crisis in Tasmania as well.
Speaker 1:I have heard this.
Speaker 2:So I mentioned it on last week's show that Invermay was a place I invested in. Okay, invermay is a suburb just outside of Launceston. It's 170K was my purchase price and that property grew to $400,000 in a number of years. And that's because a lot of people are moving into Tasmania, because they see it as ample opportunity to grow.
Speaker 1:It's also nice, the produce, the cold is some people don't like though.
Speaker 2:Okay, but the food is sensational because their produce is just out of control.
Speaker 1:how good it is yeah, fair enough, I've never been I, I've always wanted oh man, the food markets they have there.
Speaker 2:I'm a foodie. They've got this, uh, the salamander markets. I can't remember what they call salamanca, something like that. Salamanca, one of the two. Okay, watch it, it's probably gonna be like threadbow market, it's gonna be something like that. I'm saying these words but it's like a kilometer long strip and it's just food stall food, stall food, stall food, stall gin, whiskey, and it's like 9 am on a saturday and you're hammered and you're eating oysters and it's great, okay. But tasmania is also another place that's really invested in its culture and it's actually considered the food capital of australia yeah, no, I've heard that.
Speaker 1:That's the only thing I've heard about tasmania. All of the incest. Sorry, sorry to Tasmania. That's your joke, apparently.
Speaker 2:As bad stereotypes are. They're true, no, but seriously, when it comes to places to invest in outside of Sydney, you really got to start looking at those two areas. Those are the big ones. There's one more that I want to focus in on, and that is Brisbane. Now Brisbane we all know the three main CBDs of Australia are Sydney, Melbourne and Brisbane, but Brisbane has like a third of the population of the other two. Oh yeah, it's tiny, it's tiny, it's tiny. So you still have a lot of suburbs on the outer skirts, especially the western parts of Brisbane, that you can make some serious money on. If Switch 10 years ago was a great place to invest, now it's skyrocketed.
Speaker 1:Yeah, I almost bought property in Brisbane, but I had other opportunities came up.
Speaker 2:You see what I mean. And then you've got places like Redcliffe Margate. You've got areas like the Peninsula. You've got all that coast that people can invest in. And they just got the Olympics in 2032. Yeah, so they're going to have all eyes on them around the world. So they're investing heavily in their infrastructure. You've got new train lines coming up. You've got new high rises coming up. They're really investing in their nightlife the Fortitude Valley. They call it Bris Vegas for a reason. It is like ratchet you want a night out, you go to Brisbane. Melbourne's still fun, don't get me wrong. You go to Melbourne, you go to Revs. Things happen. But yeah, melbourne is still Melbourne, but Brisbane has seriously invested in their nightlife culture, which is awesome. Sydney seems to be lagging behind. We're in this city that we don't like nightlife. That's fantastic.
Speaker 1:In contrast to New York, we are the city that always sleeps.
Speaker 2:Yes, yes, no, no, no. We always sleep until it's 4am and then, all of a sudden, there's thousands of people running in Bondi.
Speaker 1:Yeah, I should rephrase that. We are the city that goes to bed at a reasonable hour and wakes up at stupid o'clock to go on fucking runs. Guilty, I don't understand these run clubs. You're waking up at fucking nine o'clock. How old are you?
Speaker 2:no, maybe 60, no, no, but this, this is the thing about sydney, because we've exterminated all of the social life that was occurring at night. Yeah, instead, where this? Okay, we need to find something to do. People want to be social. Wow, who would have thought? Millions of years of evolution where people have pack mentality and they like hanging out with each other, social animals, yeah, yeah, so people are actually waking up earlier and I'm not opposed to this because I like being healthy. Yeah, you're a morning person. I'm a morning person. I've been most efficient in my mornings, but in saying that, not everyone is me.
Speaker 1:No, I cannot stand waking up that early.
Speaker 2:Yeah, you see, like some people like being up late, some people like reading books at night, yeah, I'll be up till stupid o'clock. My brother-in-law is a DJ. He's a creative, okay, and he is up until four in the morning making music. Yeah, but he doesn't have a place to play music in Sydney. He played a gig in Brisbane last week. I imagine that was a lot better than Sydney Because there's opportunity there. So, you see, brisbane, they're investing in their nightlife, they're investing in their restaurant culture. They want more people to move to Brisbane.
Speaker 2:Apparently, you go to Surfers Paradise and it's all Lebs. I'm a big fan of this, I love Lebs, I love a good kebab, I love a good kebab. But, as I'm saying, it's just look for the opportunities outside of sydney and melbourne. Sydney and melbourne, you're always going to make money. Yeah, but the, the price of that tree is high. Yeah, look at perth. They just had the wwe elimination chamber. They sold out a stadium. Okay, to me that is insane because it's been the whole population of birth. But like, look how much, look how many people went there. Yeah, look at the ufc has been held there a number of times now. Look at State of Origin has happened in Perth has occurred a few times. They're starting to become smart. They know that we can't have everything based in Sydney and Melbourne, so they're starting to spread around.
Speaker 2:So, whilst last week's podcast was doom and gloom and I was sitting there, I was going the world is ending. The world is nigh. The world is nigh. No, you could still make money in other cities. But this brings me to my next topic.
Speaker 2:You've got to be good at savings, because if you decide to invest, you can't use the government grants that are in front of you to be able to buy investment properties. Right, so let me they're just for first-time buyers. You typically right, that's exactly right. And the classification you can be a first-time buyer and purchasing your first investment, you still don't get the schemes. So the first-time guarantee, where the government comes in as a guarantor and you can purchase with a 5% deposit, that doesn't exist. If you're looking to invest, the first-time owner's grant doesn't exist. If you're looking to invest, okay, if you're looking to move to Perth and this is going to be your owner-occupied property, you can use the first-time guarantee. You can have the government come in as the guarantor and you're using a 5% deposit. But if you're looking to live in Sydney and rent-vest, as people like to call it, which I hate Rent-vest, I've never heard of it. So rent vesting is you rent where you live? Rent vesting okay, rent where you live.
Speaker 1:I thought you said rent fest.
Speaker 2:I'm like what a festival celebrating rentals.
Speaker 1:What are we talking about here?
Speaker 2:I like that. You said celebrating and not celebrating. No, celebrating. We're celibate to renting properties. That's what this festival is about. Redvesting, which I still don't like as a term. It's renting where you want to live and then investing to grow your money. That's fantastic, but yet again, I actually hate the term. I think we need to come up with a better term.
Speaker 1:I've been doing that by accident.
Speaker 2:Not that I've ever heard that. I wasn't doing it intentionally, clearly. But if you want to do that and you want to be able to invest over in the other cities, you need to be able to save money and you need to get a lighter deposit. And how do we save more money in today's climate? Please tell me. I want to know. There's a number of things that you need to be able to do. The first thing is you really need to avoid afterpay and zip pay. First of all, these two things do affect your credit report. Okay, so if you have an afterpay account or a zip pay account, they're going to affect your CCR. The second thing is, when you're using afterpay or you're using zip pay, you're just prolonging the process. You're buying something that you don't need Okay, at a period of time that you can't afford it, because you want it now. Because you want it now and unfortunately, no one is coming to save you. Superman is not saving shit. They're not coming in. They're not coming to help you. What is happening? We're being brainwashed by this Instagram culture where you're scrolling through and, oh, I need to buy that. Oh, I need to buy that. I need to buy that.
Speaker 2:I've got a bunch of books to my left that teach you discipline, and I'm going to be the number one person that says this. Okay, discipline is extremely difficult. Okay, it is a difficult thing to master and I often get brainwashed by these Instagram ads. I spent 70 bucks the other day on something that's going to help me stretch. Okay, it's this pole and it's a band that's going to help me stretch. I've used it three times.
Speaker 2:Okay, I spent $40 on an iPhone stand because I thought it's going to make my life more efficient. It came home and it doesn't work properly. I spent $40 on an iPhone stand because I thought it's going to make my life more efficient. It came home and it doesn't work properly. Classic, okay, like it's just. And that is me sitting there going. I want to create the path of least resistance. I want to be in less amount of pain, okay, and I want to buy these things because I believe they're going to make my life easier, but they haven't.
Speaker 2:No, okay, yet again, all these books are in my brain, all of them, and all of them have very, very you know similar messages in regards to the discipline, where you need self-control, where you need to be able to find ways to make yourself more efficient. And after pay and zip pay and these buy now, pay later, things are not going to do that. So you have to teach yourself discipline first. You have to really say to yourself you know what Life is going to fucking suck for a bit. Life is going to suck for a bit, but the pension is not going to do anything. We've seen it in the past.
Speaker 1:Oh, you meant like the retirement pension.
Speaker 2:Yeah, yeah, retirement pension is not going to do anything. Your superannuation unless you've got a good financial advisor or you've got an SMSF property or something along the lines of that, that's not going to do much for you either. Right, you need to start growing, and you need to start growing early. You need to start actually implementing this discipline at an early age, because by the time you're 25, 26, you're not attracted by the big flashing lights. You're not attracted to going on vendors and stuff by the big flashing lights. You're not attracted to going on benders and stuff. I wish someone came and taught me this shit at 16,. But I got to break into the property market at an easier time. For a lot of other people it is a lot harder, because property prices are so high. Wages need to be controlled, otherwise inflation is going to go out of control. Okay, and at the exact same time, to be able to invest or to be able to buy a property is so much more difficult. You've got more competition, so you need that discipline. That's the first thing that you need, and I'm going to harp on about it Discipline, discipline, discipline.
Speaker 2:Next is the actual practicality. Discipline is a theory. You can't say. Discipline, you can't touch discipline. You can't watch discipline grow. It is something that is just within you. It's abstract. It's abstract. Yeah, practicality Right now, interest rates are high. Now you might be sitting there and think to yourself our interest rates are high. This is bad all over. There are certain parts that are good. Yeah, for savings right, that's exactly right. So for cash management accounts, your interest rates are higher than what they were two, three years ago. You might've gotten half a percent, one percent on your money yeah, now you're able to get five or 6%. Yeah, that's fantastic.
Speaker 1:Yeah, and I've noticed it too.
Speaker 2:If I save $1,000 at 6%, that's 60 bucks, right? If you save $10,000, that's an extra $600. Now everybody might be sitting there saying oh, it's only an extra $600 $600.
Speaker 2:You didn't have, that's 600 bucks you didn't have, you didn't even have to work for it. That's exactly right. Yeah, so that's the way that you've got to start looking at these cash management accounts. You've got to be disciplined for one to two years. You've got to seriously look at a budget and you've got to say to yourself these are my budgeting tools. I can't go over. Okay, if my friends are going out, which I don't think many people are anymore.
Speaker 1:No, not really.
Speaker 2:If my friends are going out, I need to say no, I need to have the self control to say no, and I need to be able to convince myself that it's going to be short term pain, but my long term gain is going to go further than anything else If you're able to save I'm not saying 20% deposit, because there's a lot of lenders out there that will now let you borrow for an investment property with a 10% deposit, not 20, 10% deposit, literally half Yep, so you can go to second tier lenders like Rezzy, who I absolutely love. They've helped so many of my clients get into the property market earlier. They'll let you buy with a 10% deposit with a 40-year loan term, so your affordability goes through the roof. They have to wear more risk, yes, but you're breaking into the market at an earlier time and you're able to grow your property portfolio.
Speaker 1:And also desperate times, desperate measures.
Speaker 2:That's exactly right. So if you're able to save up a 10% deposit, have that discipline for two years. It's going to take you so much further. If you have that cash management account and you're adding money to it all the time, it's going to take you so much further than anything else. The third thing I want to highlight, and this is going to trigger a lot of people figure out how to leverage your skills to make more money.
Speaker 2:You might be looking at me. You might be looking at me and saying to yourself well, f you, I work hard and I want to make more money. Look at the job market right now. This is me staring straight at the camera. Look at the job market right now and look at the unemployment rate. The unemployment rate is 3.5, 3.6%. The unemployment rate needs to be 5 or 6% for an economy to work efficiently.
Speaker 2:The reason why immigration is so high is because skilled labor is out the window. We don't have enough skilled labor in this country. So if you've got a skill and it's a niche skill don't be scared. Look at other job opportunities and try and leverage yourself to take advantage of them, because you could be entitled to a higher pay. Don't fall in love with your boss. Do you know what your boss is? Your boss is a vehicle for you to grow wealth. If you sit there and you're a slave to your employer because you want to stay loyal, loyalty is only going to get you so far. If you need more money or you need a pay rise, ask for it, because we have a limited amount of skills in this country and if you can leverage your skills, you're going to go very far. Speaking of which, could I?
Speaker 1:have a pay rise. You've gotten one.
Speaker 2:Have you? I don't know. But, as I'm saying, these are the things that you need to be able to do. Look how to leverage yourself If you've got to, especially if there's a few things that people will undersell themselves on. But if you can speak well and communicate effectively, if you're great at being on time, you've already beaten 80% of people in Australia.
Speaker 2:Take it from someone that has gone through a lot of employees and not happily I have. I have actually a core value, that is, I never, ever want to remove anyone from my business or retrench anyone from my business. I'm not going to say the word fire, but I never want to go through that because I like people being happy in my circle. I like knowing this is the number I call if I need something to be done or this is the people I can rely on. So I like having those particular people in my circle. But if you show up on time and you are good at your job, there's a good chance that you can turn around and say, hey, mate, can I make a little bit more money? And you know what your boss is going to say. You're going to be so hard to replace that. Yes, you can, because cost of replacement. Have you ever heard of this cost of replacement as an employer?
Speaker 1:Oh yeah, I've heard things where it's like you get rid of someone because they were underperforming, even though they had been around for a long time, or even a short time. Then you're losing money because you have a vacancy, yeah, and then there's money that costs to train them up for that position.
Speaker 2:That's exactly right.
Speaker 1:And all those costs.
Speaker 2:It takes six months of a person's wage to be able to fill that role again.
Speaker 1:Yeah.
Speaker 2:So let's say we've got someone that's on 50K a year. It's going to cost me $30,000 to get those people efficient. Yeah, okay, regardless of what anything in the market tells you, it's going to cost me $30,000 to get those people efficient. That's what cost of replacement is. Yeah, my employee coming up to me and saying, hey, can I have $2,000 more a year, or $30,000?
Speaker 1:Yeah.
Speaker 2:And now.
Speaker 1:I've got two employees in this office getting ideas.
Speaker 2:But this is a big thing. Have confidence in yourself and leverage yourself, because if you do those two things and you're good at what you do, then you can leverage it. Last thing I want to talk about very quickly is you need to stop and this is the thing people need to stop having a victim mentality. Right, right, things don't happen to you, they happen for you, okay. What I mean by that is especially with the victim mentality, okay, when you are sad or when you think the world is nigh and all these things are closing in on you, you look for an escape, and the quickest escapes in this world are dopamine, hits, pokies, smoking, drinking, gaming All the fun things in life basically yeah, they're escapes. If the fun things in life basically yeah.
Speaker 1:There are escapes.
Speaker 2:If you learn how to control this mentality and yet again, this is through discipline If you learn how to control this mentality, you will end up seeing that you're saving a lot more money because you will feel like you're in a lot more control. I know this is a finance podcast and a property podcast, but I am getting a little bit spiritual right now.
Speaker 1:There's a little bit stoicism here, yeah.
Speaker 2:But if you learn how to control those two things, if you learn how to reduce the amount of things that will affect you mentally and increase your discipline at the same time, you will save more money. And if you save more money, you will be able to set yourself up for the future. So it's an investment in your mind. At the same time, we're living in a country now where it is a lot harder to make more money, so you need to figure out the ways to do that. And you're not going to be able to figure out those ways if you wake up and the first thing that you do is spend 90 minutes on TikTok. Your brain is getting inundated with so many different things. And do you know?
Speaker 2:The thing about Australia right now is we're so good at everything that we do, right, okay, because we're so good at everything that we do, we get pulled in different directions. We say to ourselves oh, I'm good at this, I'm going to try this, but we never master it. Oh, I'm good at this, I'm going to go Jack of all trades, master. That's what ends up happening. So people sit there and they get upset with themselves and they go oh, I could be a DJ. Watch, I'm going to get on SoundCloud and I'm going to make a few things. Or you know, I don't know how DJing works, but oh, watch, I'm going to blow up my SoundCloud and then, when they don't, could do that again, and they'll jump on the computer and they'll try and do it again, but they never stick to it.
Speaker 2:Okay. So what I'm saying is find one skill that you're really good at, find your thing, find your thing, hone in on that and make yourself irreplaceable. Yeah, and by building that discipline, by telling yourself that I'm a victor, not a victim, okay, by building that discipline, by telling yourself that I'm a victor, not a victim, okay, by creating a cash management account, by doing those things, you're going to watch your savings grow, because you're going to say to yourself I don't need to spend $100 on the pokies to feel something. Okay. And the government sets pokies up because they profit off them. Look at the lockout laws. Boy, do they profit off them. When, when, when, lockout happened, what was the only thing that was open in the cbd after three am? That was unreal.
Speaker 1:That was so like obvious and I couldn't believe how brazen that was and as to what their intentions actually were but you but.
Speaker 2:but you see, they make such easy money off it. Why? Because people were depressed and they needed a dopamine hit Bang money, bang money, bang money. So learn how to do a dopamine detox and you will discover that you are happy within yourself. And when you're happy within yourself, you will spend less money.
Speaker 1:I think there's an issue as well in Australia that we're falling behind when it comes to mental health, um treatments and stuff like that. So that might come into come into play as well. So for some people I know that it's an issue like if they've got, you know, severe depression and stuff really difficult to get out of bed and or just do anything really, or even anxiety and stuff like that, and then onto the more serious stuff with your bpd and stuff like that is, you are on a six-month waiting list to get into a psychiatrist's office or a psychologist's office. It might be government-subsidized If you're going to see a psychiatrist, it's certainly not and it's going to cost you $600 for an hour. Yep, that is something that we need to look into as a nation as well public spending where that needs to go.
Speaker 1:And that can happen, you know, because mental health is also. It plays into the pokies, it plays into the drinking and all those things that you were saying. For those dopamine hits, I'm so depressed I can't afford therapy, but I can afford a beer or a pack of cigarettes. Actually, I don't know how you can afford a pack of cigarettes nowadays, but you know what? Thanks Albo, and I got a whole thing about vapes and why. If they really wanted to get rid of them, they could, but I'm not going to because this is not the place. Anyway, I lost my train of thought.
Speaker 2:No, no, I hear what you're saying and the truth is they say money doesn't buy happiness. But do you know what it does? Buy A bit of peace of mind.
Speaker 1:Yeah, it certainly means you don't have to worry about certain things, but does absolutely help mental health.
Speaker 2:One of the funniest moments of my life and I always like to quote myself on this and, yes, I do quote myself. I don't know if it's quote myself, but I always like to look back on this time the happiest moment of the happiest day of my life is when I had 66 cents in my bank account Dad, 66 cents left in my bank account. I kind of looked at myself in the mirror, I looked, I was looking and I had two hands and I had two feet and I had a voice and I was like okay, we can figure this out. Regardless of anything else, I can figure this out. I'm going to figure out how I'm going to be able to make more money in order to be able to complete my university degree, in order to be able to start my business, in order to start my life, start my investment life. So what I did was I used the resources around me. I had a personal training certificate, so I started personal training again. Okay, I was calling around for work and my cousin got me a job with Lexus as a limousine driver. I needed my full license, but that was my job. It was the best job I ever had. Why? Because I would pick up where I needed to pick up, I would drop them off, okay. And then in that in-between time of me picking them up and dropping them off, I was allowed to go study at the library and I was getting paid for it because I was on call. So my client had to message me 30 minutes beforehand hey, come pick me up, and I would know exactly when to leave the library, when to leave wherever I was to go pick them up. So, yes, I was limousine driving, but I would go, I'd pick them up and in that time I'd be able to use that two or three hour span to be able to make money and study at the same time. So that was.
Speaker 2:That was a semester at uni where I took five units I was doing. Anyone that's been to uni knows that five units is a lot to take on at once Way too many. I did five units. I got HDs in all of them, okay, I was also earning some of the best money I ever earned in my life, because I was a limo driver, okay, and I was a personal trainer at the same time, and because I was focused in on what I was doing. I was so ultra focused in on what I was doing. I was able to grow my savings and I was able to grow it exponentially. And people turn around and they go to me oh, you know that's too hard to do. No, you will always find these little pockets where you can make that money.
Speaker 2:Okay, and because I was so ultra focused on my university studies at the time, I knew I needed to get into finance. I knew that personal training wasn't my calling, even though I was still go to the gym regularly and I love it. But I knew that those were the things I needed to focus in on. And because I was ultra focused on that, because I was ultra disciplined and because I said to myself no, I'm not going to sit here and say I've only got 66 cents in my bank account. Do you know what I'm going to say to myself? I've said to myself I've got two hands and I've got two feet, I'm going to figure this shit out. And I did. Okay, and not a lot of people could say that. And that's why I always preach discipline, discipline, discipline. I could have waited till my next paycheck and gone and blown that on another night of drinking. I could have waited and spent that money again on shit that I didn't need. Okay, I spent shit money on shit that I don't need.
Speaker 1:Now but my pay bracket is higher? Yeah, because I've worked so hard for it. You know, and even when it comes to the discipline, and you know, you don't, you don't have to like, you don't have to become an ascetic monk or anything like that. It's really just about moderation and it's like you know, instead of 10 beers, have five beers, something like that. Obviously health-wise maybe you don't have any beers, but is there a way that the government can help foster that kind of thinking, or help foster that kind of, or just help foster?
Speaker 2:that there's one scheme that the government's actually doing. It's called the First Home Super Saver Scheme, where you can use your superannuation to save for your house deposit. People don't know this exists. It's not heavily marketed, maybe the government doesn't want people to actually do it. But what you can do is you can use your superannuation, you can make voluntary contributions. So instead of that money being taxed at your regular tax rate so let's say you're on 80K a year, your tax rate is 21% You're instead taxed at your superannuation rate, which is 15%. 6% less isn't small. It's significant money If you were going to put that money aside for a house deposit, anyways it's going to go in there. So you use that scheme to be able to save more. The first time super saver scheme is great. That's a great initiative in order to be able to save more money.
Speaker 1:Because it's not actually like the money that should be your pension. So, for example, it's extra money, it's extra money.
Speaker 2:It's voluntary contributions that you're making and you can speak yet again. Mortgage brokers to save the day Good ones, ethical ones but it's up to you having a good relationship with a great mortgage broker. We know a couple at this place shameful plug, for it's simple. But if you've got a great broker and you've got a great financial advisor, okay, and you can be making $50,000, $60,000 a year and speak to a financial advisor, it's not just for the wealthy, it's for everyone, because they're the ones that set up your insurances, your superannuation, your growth, anything like that.
Speaker 2:Don't think to yourself oh, I'll just worry about that when I'm older, worry about it when you're 17. Worry about it when you're 18. Go up to a financial advisor and they will love it. They will actually love the fact that you're thinking about it and they might not even charge you. They'll go. You're 17 and you're thinking about this and good financial advisors get excited about this. They go oh my God, okay. So if you need to pay any fees, we're just going to take that out of your superannuation. We're not going to ask you for upfront fees and a lot of the good financial advisors do that and they're going to say what do you need set up?
Speaker 2:You want to save for a house deposit in your first home in the first home super saver scheme Perfect, okay. Oh, you want to go buy an owner occupied property? Okay, we're going to stack that up with the first home guarantee so you're saving your deposit at a lower tax rate in the first home super saver scheme and at the same time you're using the first home guarantee to be able to purchase a property. The only thing is the price caps are a little bit out of control, because the maximum you can use for Sydney is $950,000. And where can you buy in Sydney for $950,000? These days the median house price is 1.6 million, so the government does help. No way Is days the median house price is 1.6 million, so the government does help. No way that's. Is that the median house?
Speaker 2:that's the median. That's. That's what most people pay in sydney now for a house 1.6 million dollars, not the average. The average is lower than that yeah, yeah, but the median is is the middle, yeah so what I'm basically saying is the government has provided incentives to be able to help people to save yeah.
Speaker 2:But they do need to do a little bit more. They need to start focusing in on the immigration. Policy is really out of control and I've mentioned this time and time again. But they need to think to themselves. If we're going to let in this many people, we need to increase the supply of housing, because we can't handle this many people Yet again. More skilled migrants perfect, I can hire more people that could do great jobs, but if they don't have a place to live, that's going to impact everyone around them.
Speaker 1:Yeah, yeah, yeah for sure. And is there anything that you think the government could be doing more other than that? Or what do you think their overall goal is? Anyway?
Speaker 2:I think they needed to be doing more for first home buyers that are looking to invest for first home buyers that are looking to invest, so not owner-occupied investments.
Speaker 2:Yeah. So maybe a first home guarantee for a 10% deposit. Okay, you know what. You're an investor. 5% is for the owner-occupied, but if you want to lease it and it's your first home, we'll come in and we'll guarantee the other 10%. Because if you're going to be an investor, we need you to prove to us that you could save 10%, that you're not just going to invest, use the money and go splurge. That's a good example. Or have a stamp duty waiver for first-time investors.
Speaker 2:Now, yes, you're going to see heaps of people entering the market that way and, yes, you're going to see a lot of people entering the market that way. And yes, you're going to see a lot of you know people parents giving 10% deposits to their kids, and rightfully so. But let's think about it like this Okay, we're going to increase the investment market and this is me spitballing. This is a hypothetical idea and it might actually be a good idea because it sounds good in my head right now. We're going to do a first home guarantee for investors only, and we're going to do it for people that live in major cities like Brisbane, sydney, melbourne. The government is going to come in as a 10% guarantor if you choose to purchase an investment property. You don't have to pay stamp duty. We'll worry about the stamp duty as well. Okay, but you are only allowed to invest in regional suburbs.
Speaker 1:So we can get that regional growth that everyone's been talking about. Decentralize everything from the major cities. I think that's not a bad idea, definitely. I mean it just gives people options If you don't want to live in Sydney and you have work in Newcastle, for example you can go there Exactly and you can rent for cheaper, because now there's more investors buying in the rural towns over there.
Speaker 1:So you wouldn't think that, um, increasing the amount of uh, first-time investors could potentially lead to a issue of availability? More so, it's like, because there was a period in australia, um and I'm not sure if that's what's still happening, because a lot's changed since then um, that you've got all these empty places that are owned but they're empty, um, they're not being put out for renters, they, they're like Airbnbs it's not exclusive to Airbnbs, but things like that. Do you think that's a potential risk, unless you make some sort of clause in the agreement?
Speaker 2:Well, this is where the mortgage broker comes in. There's two things that the government can actually do. So the government monitors bank accounts. So if you're applying for the first homeowner's grant and it's expected to be an unoccupied property, the bank not the bank the bank actually, it is the bank. The bank and the government monitor that and they see if you're collecting rental income at any point in time and if it's going into that bank account, because what you've done there is a tax avoidance for stamp duty. Stamp duty is a tax, yeah, okay. So if you've, instead of moving into the property, you've made it a investment property and you're collecting rent from it, the government will hit you with a bill for stamp duty. Okay. So they monitor that.
Speaker 2:If they do the same thing, where you're an investor and you've used a 10% deposit and you are collecting rental income to help you pay off the property, I don't see why they can't do that. That would stop it from being unoccupied and that would also stop it from being an empty property. Because I know what you're saying. You've got these people. They come in, they bought, they buy four, five, six properties at a time and they buy it with cash and they just leave them vacant or they use them as Airbnbs, because they'll have less people in there. They'll get to use it whenever they want. So let's create a policy around it. Okay, you're allowed it. Use the investor first-time guarantee.
Speaker 2:Yet again, joseph's just a bit balling. Yeah, yeah, yeah, you have to use a 10% deposit and it can't be a short-term rental, it needs to be a long-term stay. Okay, so we're going to help property developers get more contracts of sale because, guess what, more people are going to be able to enter the market as an investor. We're going to help first-time buyers still stay at home with mom and dad, because they might not want to move away from mom and dad. Okay, until they're 30. I'm Lebanese. My dad, like when I got married, it was the saddest day of my mom and dad's life. Like it was like, oh, baby, he's gone, you know, like that is just a Lebanese mentality. No, it's not too different for the Croats.
Speaker 2:Yeah, it's, it's that's how they think. They just think to themselves this is what we're going to do in order to be able to save money, or this is what we're going to do in order to help our kids, and then, if they can monitor at the exact same time, okay, there's rental income coming into these properties and it's long-term rental income, not short-term rental income. I think this is a win-win-win situation where more properties are being built because more contracts of sales are out there. You've got more people who are moving to Australia that might not have cash deposits, that are able to rent more properties because more properties are being built again, and then you have more first home buyers entering the market. You know, I just wrote up a whole policy. Albo, you can take that. There's the investor first home guarantee, and let me know what you think about it, because I don't think it's a bad idea. Michael, does it sound good on paper?
Speaker 2:I'm sure certain there's a litany of cons that people are going to smash me on. But look, on paper, I sure to answer your question. Yes, there is some things that the government can do in order to be able to help australia, but I think they need to start growing a set and they need to stop worrying about lobbyists and pissing off their electorates. That's what Howard did. Howard pissed off a lot of people, but then, a year or two later, when they saw the economic benefit of it all, people were like no, this is great. When Howard first brought in the GST, it was so opposed. It was so opposed and people were like he's out, he's gone. Bloody Howard, he was the longest standing prime minister. Yeah, I think I'm pretty sure, and people are always like bring back Howard.
Speaker 2:He was the one that was happy to take it on the chin. Okay, he was happy to be booed. He was happy to stand up in a stadium and be booed, but he knew that whatever he put into place a year or two later, it would be for the betterment of the country. And I'm going to leave us on this. That is what government is supposed to be about, and it's from the Dark Knight Rises when people are sorry. The Dark Knight and Julius Caesar's quoted. It's an ancient tale Government officials should not be happy to be elected in. They should be dragged into office kicking and screaming about how bad they do not want this job, because these are the people that know what is best for people, and they're not doing it out of power for themselves, but they're doing it for the betterment of a nation.
Speaker 1:Well, you've just written up a bit of policy. You've saved Australia. Anything else you want to leave off?
Speaker 2:with. Why is it always mortgage brokers that have to save Australia? Every single time? It's up to us to figure out how to save more money for people, how to get them into a house and how to build their wealth. I don't understand it. I've got to go hang my cape up and got to be ready for tomorrow to save a whole bunch of other Australians, but no, there's nothing else I want to discuss. I want to thank you all for listening in. I know this was a very philosophical episode and it was a very niche episode. I hope you got a lot of good information, a lot of good general advice on this episode of where to invest, but I do hope you all enjoyed it. As always, I've been Joseph Dalwood. This is the Finance Show with Joe. If you do want any help with your financial advice or if you do want help with your mortgage, visit us at wwwitsimplecomau. You can also find us at itsimplefinance on Instagram and also at joeychandon on Instagram. It's like Moet Chandon but Joe A Chandon, because my name is Joey.
Speaker 1:I always read it as Joe T Chandon.
Speaker 2:But thank you all, michael.
Speaker 1:No, that's all from me. I'm your lovable schmo who doesn't know anything.
Speaker 2:And we'll see you next time.
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