The R-Word: Breaking Down Recessions

What is a recession? With the globe continuing its nosedive into chaos, economies around the world are suffering and Australia is no exception. As such, it’s important to understand what a recession is and how it affects you. 

In this episode, Joe and Michael break down everything you need to know about recessions and provide some tips to help you protect yourself financially during tough times. 

Despite the panic a possible recession might cause, Joe and Michael explain why staying calm and seeking advice from your financial professional is key because the wrong move at the wrong time can cost you more than you think. 

Follow us for more property news and mortgage advice! 

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DISCLAIMER This podcast contains general financial information only. That means the information does not take into account your objectives, financial situation, or needs. Because of that, you should consider if the information is appropriate to you and your needs before acting on it.

Transcript

Are We Already In Recession

SPEAKER_00 0:00

The government seriously needs to get a grip on what the fuck they're doing. I'm not too sure if we're heading to a recession. And looking at the patterns, I feel as if we're already in a recession. Well, we've printed too much money. We've printed too much money, yeah. And then all of a sudden, the interest rates went up. Petrol prices are now$3.10 a liter. Four people brought into a striver for every dwelling that was built, 50% of our property is taxed. There's a possibility our interest rates are going to go even higher. And then on top of that, interest rates going even higher, there's a chance your costs are going to rise as well.

SPEAKER_02 0:29

I've been talking to a lot of people around and they don't really know what a recession is. They're people thinking it's the Great Depression where there's bread lines and there's stockbrokers tossing themselves out of windows.

SPEAKER_00 0:39

Not quite. Learn how to protect yourself from the recession. Look at the signs of what is happening in the market. Get wise.

Why Recession Feels So Confusing

SPEAKER_02 0:48

Welcome to the Finance Show with Joe. And honestly, things are getting a little dour. Things are getting a little dark because we might be heading into a recession. But I've been talking to a lot of people around, and they don't really know what a recession is. They're people thinking it's the Great Depression where there's breadlines and there's stockbrokers tossing themselves out of windows. Not quite. It's a little different, and we're going to get into it. I'm Michael. This is Joe. Welcome to the Finance Show with Joe.

SPEAKER_00 1:15

Michael, I'm very excited to do this episode because I could finally use that piece of paper on the wall. Oh, the economics degree, of course. Ladies and gentlemen, you're speaking to the only mortgage broker in Australia that's got a degree in economics.

SPEAKER_02 1:33

So if anyone's going to talk about the recession. Who's got a master's and a cert for?

SPEAKER_03 1:37

Yeah. Yeah. You're the boys.

SPEAKER_00 1:41

Do you think anybody with an economics degree has ever screamed out yeah the boys?

SPEAKER_02 1:46

Not the ones I went to class.

SPEAKER_00 1:47

This is a very, very horrible start to a very dire episode. But we're trying here guys. We're in pain.

SPEAKER_02 1:52

We can we we can only laugh. That's all we've got left.

What A Recession Actually Means

SPEAKER_03 1:56

That's yes, pretty much.

SPEAKER_00 1:57

Economics. Okay, so I'm gonna start broadly by speaking. My first economics lecture, my lecturer got up to the front. It was on macroeconomics. And he goes, I'm going to teach you all how to end world hunger. I'm like, awesome. And he's like, but you have to assassinate a few people first.

SPEAKER_01 2:14

And I was like, All right then. Okay. Were any of those people the Aotola?

SPEAKER_00 2:19

Um I'm just we've been cancelled in two. Anyways, no. Essentially, an economics degree is I always like to say it's a it's it's a mixture of philosophy, meets, maths. Yeah. Okay. It's it's it's behavioral science, it's hubris, it's understanding um uh the supply and demand chains or what the demands of each country are if a country's in a growth period or if they're in a contractionary period. Um, and every country defines recessions differently. Yeah. In Australia, it's if we've got two quarters that are consecutive of negative growth.

SPEAKER_02 3:00

Yeah. Very simple.

SPEAKER_00 3:01

Yeah. Uh I'm not 100% certain. I'm 90% certain that we avoided a recession in 2020 when COVID first hit.

SPEAKER_02 3:10

The last time Australia was in recession, as you said, was uh in 2020, right at the beginning of it of uh COVID. It started in March and ended in May. It was very, very short. That was because we did so much stuff to prevent it. The cash rate was 0.1%. Yeah. Um, everyone got uh the jobkeeper stuff and all that sort of things.

SPEAKER_00 3:28

There was a home builder scheme to get the to activate the uh construction market. The government did everything it could to help avoid recession.

SPEAKER_02 3:40

Yeah.

SPEAKER_00 3:40

And then we went the other way where we had a complete like spike in inflation. We got too much money. We've got well, we printed too much money. We printed too much money, yeah. And then all of a sudden the interest rates went up. So I'm not too sure if we're in a recess, if we're heading to a recession, but I feel and looking at the patterns, I feel as if we're already in a recession.

The Warning Signs Checklist

SPEAKER_02 4:04

Well, I looked at the warning, I looked into the warning signs because honestly, like again, I've got a very general idea of what a recession was. But here's the here's like, let's let's just go to get with the dictionary definition out of the way. Like simultaneous declines in consumption, investment, government spendings, and net export activity. Boring. We got that out of the way though. All right, here's the the signs of a recession that's coming. And let me know if anything sounds a little familiar to you guys. Number one, falling consumer confidence. Yes. Number two, falling retail sales. Yes. Three, reduced business investment. Yes. Four, wage stagnation or decline. Yes. Five, housing market slowdown.

SPEAKER_00 4:44

We're not sure yet.

SPEAKER_02 4:45

Are the clearance rates are dropping?

SPEAKER_00 4:47

The clearance rates are dropping, but they were flying before.

SPEAKER_02 4:52

So not quite there, so that's a maybe.

SPEAKER_00 4:55

Yeah.

SPEAKER_02 4:56

Uh number six, growing corporate and household debt. We know certainly with households, I can't speak for the corporates.

SPEAKER_00 5:01

Corporate corporate debt is through the roof because of the amount of private credit that's now in Australia. So that is through the roof without actual uh data being able to like it's it's not quantifiable because the people that are lending this money out are private officers that don't have to report their data to you know ASIC or shareholder company. Anyways, yeah.

SPEAKER_02 5:21

Well, and the last one, and I'm sure it's near and dear to all Australians' heart, growing food prices. So food prices going up is a sign of a recession on the way.

SPEAKER_00 5:29

So I went to McDonald's the other day and I just got a large meal and a six pack of nuggets. Okay.

SPEAKER_02 5:35

How much does that cost you?

SPEAKER_00 5:36

$25.80.$25.80 for a large He got the grand angus problem. No, but for a large burger meal and nuggets. I I remember paying$10 for that back in the day,$12. And I'm when I say back in the day, I'm not acting like I know I'm old.

SPEAKER_02 5:53

Yeah, but it wasn't 20 years ago.

SPEAKER_00 5:55

But it wasn't, yeah, it wasn't. It was like 10.

SPEAKER_02 5:57

Yeah.

Cost Of Living Shock Moments

SPEAKER_00 5:58

So when I saw that, I was like, did I just pay$25 for a meal from McDonald's? I I was, I was really, it really, really stumped me. Now we're at the start of this, and the reason why we're at the start of this is because of this war in Iran. They've blocked off the straight up or moose, which is now the most popular phrase in the world.

SPEAKER_02 6:21

Yeah. It's it's it's like how many people can honestly say they knew about it before any of this happened?

War And Oil Driving Price Spikes

SPEAKER_00 6:27

No, barely any, but the it just reminds me of social distancing, the amount of times I heard the word social distancing five years ago, and now it's straight up for moose, straight up for moose, straight up for moose. Everyone's an expert on it, by the way, on geopolitics. I'm just going to tell you what I see in Australia and how I expect this or how I anticipate this to play out.

SPEAKER_02 6:51

Okay.

SPEAKER_00 6:51

So, firstly, we see petrol prices are now$3.10 a liter. Well, for diesel. And I have diesel. So$3.10 a liter, a lot of the prices that we have set right now, whether it's via uh grocers, whether it's the groceries, whether it's via freight, it's set on the prices contractually obligated, da-da-da, from three months ago that they're putting, or six months ago, yeah, or 12 months ago. Once those contracts lapse and people calculate, hey, this is how much more expensive it is for me to ship goods to Australia, or this is how much more expensive it is for me to deliver food to this grocery market, or to bring a concrete truck out there, that is when the prices really come into effect.

SPEAKER_02 7:38

Yeah.

SPEAKER_00 7:38

And that is going to be the leading cause of this recession. I believe that we are already in recession, and I'm happy to have a healthy debate.

SPEAKER_02 7:49

I I I would tend to agree. I just read off the warning signs, and I fucking all of them are they were right there.

Housing, Migration, And Negative Gearing

SPEAKER_00 7:55

Yeah. So firstly, housing prices exploded again last year.

SPEAKER_02 8:02

Yeah. We've spoken about this at length.

SPEAKER_00 8:04

At length, but when you have an it's it's the the issue with Australia's housing market is it was artificial.

SPEAKER_02 8:11

Yeah, and it kind of always has been.

SPEAKER_00 8:14

Pull back a bit. All right, just hold your sister a bit before I before I start going crazy. But we had mass migration again. We had four people brought into Australia for every dwelling that was built. We don't know if the dwellings that were built were for those four people. Like, for instance, like, oh, these four people moved to Lacemba, but they built a house over in Alice Springs. So, you know, there might be more vacancy in Alice Springs, but there isn't in Lacemba. So we've seen vacancy rates still hover between one and two percent when the national average over five years ago, just over five years ago, was five percent. We've got an extreme lack of supply when it comes to rentals. Now, what's what is it about rentals and what is it about negative gearing? And what is it about investments that people are always talking about? Oh, people shouldn't use uh investment properties to be able to make money in Australia. Well, our tax system has made it quite advantageous for people to make money via investment properties.

SPEAKER_02 9:17

One would almost say it was geared towards well done, well done.

SPEAKER_00 9:23

Five stars. You're telling people who have found a way to make money to make more money and then not expect to use it.

SPEAKER_02 9:31

Yeah, it's it this is where the reform aspect has to come in. If you want people to stop doing it, and like this is I'm not arguing for or against, but if you want people to stop using the system that way, change the system, or increase the supply in the market on the system.

SPEAKER_00 9:45

As well, okay, so you can say, Oh, I change the system. Okay, cool. But the problem with that, and I'm about to add so you change the system, okay? No more negative gearing. Two issues, and I spoke about this when we had David Mack on the show.

SPEAKER_02 9:57

Yes, we did.

SPEAKER_00 9:58

First issue number one was people are just gonna switch to company structures because you can offset the interest in there and it's a 25% tax rate, whatever. Yeah, but number two is you're going to see a lot less off-the-plan sales. Yeah, and how do property developers and builders get funds from the banks?

SPEAKER_01 10:15

Off the plan.

SPEAKER_00 10:16

They get it via off the plan. So what you're going to see enter Australia even more is either private credit, so private private lenders that hey, I'll lend you five million dollars, but your interest is gonna be 20%.

SPEAKER_02 10:30

And we'll break your legs if you don't pay it.

SPEAKER_00 10:34

Because it's company to company loan. And it's oh no, like we don't care. We don't care how you get the money. No, we're just we're just gonna we're just gonna bankrupt you.

SPEAKER_01 10:41

Yeah.

SPEAKER_00 10:41

So there's that option loan to own loan sharks, or there's the other option of guess what, we're just not gonna build because we can't make profit there. Yeah, so there's multiple factors, and this is why I say it's artificial, it's inflated, uh, the the government seriously needs to get a grip on what the fuck they're doing. But you can say, oh, yeah, negative gearing or get rid of it. I could say, okay, let's discount the negative gearing. That's all well and good. People are just gonna switch the company structures, or they're just not gonna buy more property.

SPEAKER_02 11:12

Also, the numbers have been crunched several times, and like while negative gearing would have like this is more in terms of property uh house prices and stuff, like oh, negative gearing, the prices will go down marginally, like not to the point where people are thinking it will solve anything about the house.

Protect Yourself With A Real Plan

SPEAKER_00 11:26

There's gonna be another complaint about another thing shortly afterwards. Oh, now people own properties in companies. Okay, so we'll stop companies from being able to get that. Oh, I just can't save money because things are expensive. That's what's gonna happen. Okay, so the signs, the the definition of a recession, the the what the government is doing to assist, I can tell you one, two, three, they're all headed in the wrong direction. What you need to do right now is learn how to protect yourself from a recession. Because if there's a possibility our interest rates are gonna go even higher. And then on top of our interest rates going even higher, there's a chance your costs are going to rise as well. If you do not control your own destiny or if you're working for a business, um, or if you like I'm I'm not gonna lie, Liam, our video producer, Michael, yourself, you are both employees of It's Simple. It's true. Okay, as employees of It's Simple. Now you know me, I would rather go get run over by a car than remove you two from the business. You guys know that well. Fucking run through brick walls for you guys, okay?

SPEAKER_02 12:33

Stop it. You're making me triple, like you know, you guys are my kids, anyways.

SPEAKER_00 12:39

But what I'm trying to get at with this is not every business owner out there is like me.

SPEAKER_02 12:45

No, 100%.

SPEAKER_00 12:46

And then on top of that, I'm looking at this now and I'm like, oh shit, I had growth plans for 2026. I'm gonna put a pause on that.

SPEAKER_01 12:55

Yeah.

SPEAKER_00 12:56

Because if I don't pause that, I could be putting people in my workforce, people that I take care of, people whose retirement depends on me. Yeah, I could be putting them at risk if I go take risks that I shouldn't be taking.

SPEAKER_02 13:09

Because that's like that's the really the big thing. Like as it pertains to you, the listener, the viewer, what happens for a recession is business productivity falls, as do profits, which therefore means unemployment rises. Correct. Which therefore means living standards start to drop broadly. That's what that's what happens. Like you, I I saw a comment one day that was like um stagnation is when you know someone who's lost their job. A recession is when you lost your job or something like that.

SPEAKER_00 13:37

Stagflation or stagnation? Stagnation. In these particular circumstances, let me get back to my serious voice. The serious voice is back on people. Look at the signs of what is happening in the market and get wise about spending habits, get wise about the way that you are producing for yourself and your family, and start protecting yourself, fix your interest rates.

SPEAKER_02 14:09

Plan ahead. Have a plan. Just a vague, even if it's a vague plan, have something.

SPEAKER_00 14:14

Yeah, but don't leave it to the last second. Check your subscriptions. I'm guarantee you go into your bank accounts, you'll see a random$20 subscription that you forgot you signed up for. Have us to me daily.

SPEAKER_02 14:25

I was gonna say half of our job isn't going through and it's like, Joe, we gotta get rid of this. When did you sign up for this? I signed up for this, yeah.

How Long Could This Last

SPEAKER_00 14:33

Pretty much. So we need, but like truthfully, yeah. No, it gets easy to get lost in the source. It is. So you need to learn how to protect yourself. Look at the telltale signs. Okay. Now, if you look at me and you ask me, when do I predict this recessionary period to end?

SPEAKER_02 14:49

Oh, it's a hard one to say because does this end up like because it because really it depends. Like, does Iran turn into a forever war like like Afghanistan or Iraq?

SPEAKER_00 14:59

There's two issues. Iran has been planning for this war since the 80s.

SPEAKER_02 15:03

Yeah, Iran is not like is a powerful uh country, yeah, because they've got resources that they could tap into.

SPEAKER_00 15:09

Afghanistan had resources, but their resources were heroin and stones. They they didn't have the oil that that's why America used Afghanistan to get into Iraq, anyways. But like Iran isn't some backward ass country that yeah, you know, no, no, no. They've got they've got they've got funds. It's Persia.

SPEAKER_02 15:30

They fought the Greeks, like this is a civilization that has been around for fucking centuries, millennia even. Correct. So like don't don't like write them off, correct?

SPEAKER_00 15:40

But it's the hubris of Donald Trump, yeah, and being catered to and being surrounded by the right, people saying, yeah, you should go do this, or 100%. And that is the reason why, so that is the reason why this war is still going. Now, there is a semblance of arrogance, they got him at a good time to go do it as well. I've just kidnapped the Venezuelan president or prime minister. I don't know. Secured huge oil reserves, so this guy's thinking to himself he's untouchable. Yeah, no, do you know you know what I've got bad advice? Yeah, but I'm gonna go invade Ira Iran, anyways.

SPEAKER_02 16:15

No one has successfully invaded Iran since the since Muhammad in the fight in five hundred in the 500 AD. Like it's a mountainous, it's the same reason you couldn't take Afghanistan. It's a mountainous region where you can't just put in like hordes of troops, because it doesn't work that way. Also Vietnam, same thing, just jungle instead of mountains.

War Chest, Debt, And Cash Flow

SPEAKER_00 16:36

Yes, okay, and people aren't pre-prepared for that. So it's really about like how arrogant or egotistical is Trumpy, the big orange man, which I mean we're not gonna say he's got a small ego.

SPEAKER_03 16:54

It's yeah, yeah, that's the best way to put it.

SPEAKER_00 16:58

It's it's it's it's not a small one. No, okay, and also how much resource has America got to deploy before they have to start a ground invasion, and if they start a ground invasion, that's not gonna end well.

SPEAKER_02 17:15

Well, I saw in the news, I think it was either this morning or last night, that uh ground troops are on their way. What you're joking? No, I'm not.

SPEAKER_00 17:21

Oh god. Okay, so what are my predictions? What do I think? Unemployment will increase.

SPEAKER_02 17:27

Yeah, that's the standard, yeah.

SPEAKER_00 17:29

But the problem with that is we've already got people in Australia that are underemployed, that aren't getting paid enough or they're not working enough days, but unemployment will increase.

SPEAKER_02 17:37

Which is what because just for context, unemployment right now is actually really low, right? It's 4.2. That's like where you kind of want it. I know there's an ideal. You want it at four?

SPEAKER_00 17:47

You want it between four and a half to five.

SPEAKER_02 17:49

Oh, so it's actually a little low. Okay.

SPEAKER_00 17:50

Correct. When the Albanese government first came in, the amount of bureaucrats to individuals was 33. No, 37 to 1. Now it's 17 to 1. It used to be 37 people to every bureaucrat, now 17 individuals to bu to every bureaucrat. So the government's spending's up. So to be able like there needs to be a number of systemic changes right now in Australia to prevent a recession, but we don't have a government that will do it. And how do I know this? They've just appointed a fuel crisis task force at the federal level where they've created 20 something new jobs and they've just employed them straight away. No job adds up on seek, nothing. Yeah, they've just already got their mates and they've put them in. But that's 20 plus new full-time salaries that our taxpayer dollars are going to be paying for. So you're going to see the private sector shrink quite a bit in Australia, and you're going to see the public sector increase even more. And it's going to be a flatter, more socialist regime in Australia, which I'm certain everybody looking around now is not enjoying, especially when it comes to the petrol prices and a bunch of other things, like, you know, the amount of uh bureaucracy that goes into just building a house, like 50% of our property is taxed. Like that's that's how much like government fees.

SPEAKER_02 19:15

That to be fair, the the bureaucracy stuff, that's just an Australian thing. Fuck we love rules. The stereotype of the laid back Aussie doesn't actually exist. Now, there are some guys you know that are that are like that, but the is the culture at large, no, no, we are not like that. We love a rule, we love a good rule, we love a sign. Yeah, just we'll do just like we we are a nanny state and we've been that way. And this is like under liberals, under labor, it doesn't, it's just this is what I mean. It's an Australian thing. Obviously, the increase in bureaucracy is a different story, but just like the general trend of Australia.

SPEAKER_00 19:47

That's it's because you can't just pick up and jump countries. Where are you gonna go? New Zealand, they're worse.

SPEAKER_02 19:51

Well, all the Kiwis are coming here, yeah.

SPEAKER_00 19:54

Because they hate their rules.

SPEAKER_02 19:55

It's interesting how for from their perspective, Australia is considered the land of opportunity and the golden land. Jesus Christ. We're dude. It's all about perspective, isn't it? It is, it is.

SPEAKER_00 20:05

Um, but in summary, yeah, how do you protect yourself from a recession? Well, we did a bonus episode after this one. Five things you can do. But I'll quickly just give it to you here. Number one, build a war chest. And I always say build a war chest. What is a war chest? Make sure you fucking tighten up your savings, stop spending money on, and I'm not gonna say useless shit because people need to eat, people need to drink, people need to call other individuals, people need to pay for internet.

SPEAKER_02 20:32

Also, living as well is like uh what's the point in life if you just have to live like austere, like with nothing?

SPEAKER_00 20:39

But protect yourself, create a budget plan, look at your finances, look at what subscription models that you have, look at your invoices, look at your insurances, see what you can bring down and then work backwards from there.

SPEAKER_02 20:52

Yeah, I found a few things as well, like um cash is king to a certain extent. Save up, have that wall chest, like you were saying, at least three months. Um, try pay off as much debt as you can, I suppose. Um, try not to get new debt.

SPEAKER_00 21:05

No, no, no, no, no, no. Let's go back to the debt one. Try to pay off as much debt as possible. Short-term debt, yeah.

SPEAKER_02 21:12

Oh, like credit cards and such, yeah.

SPEAKER_00 21:14

Yeah, personal loans, yeah. Home loans?

SPEAKER_02 21:17

No, no, no, no.

SPEAKER_00 21:18

I'm not gonna say yes. Like if you've got two years left on your home, just get rid of it. Yeah, just try and get rid of it. That's different. Yeah, you've got 25 years still, like if and I think we brought this up in our bonus episode, but if I've got 23 years left on my mortgage, my repayments are$7,300 a month. But if I stretch out my loan to 30 years and my repayments are$5,900 a month, that's$1,400 a month. I've got extra in cash flow. That is money I can be using right now, this very second, to protect myself. Yeah, I'm not saying this advice is for everyone.

SPEAKER_02 21:51

No, no, no. Speak to a professional.

SPEAKER_00 21:52

Yeah, don't be racking up credit card debt, is what I'm saying.

SPEAKER_02 21:55

That's a big one.

SPEAKER_00 21:56

Yeah. But if it's your home loan and stuff, speak to an expert before. You do anything like Michael just said.

SPEAKER_02 22:02

Yeah. And I found another this other thing online. You tell me if I'm right or wrong on this. Avoid buying or selling investments out of fear. Like, don't panic.

SPEAKER_00 22:10

That is that's probably my favorite one. This is non-financial advice. So we saw before the war started, people go if shit over gold.

SPEAKER_02 22:20

Yeah, yeah, yeah.

SPEAKER_00 22:21

And gold's dropped by 10%.

SPEAKER_02 22:23

Yeah. Correction or just people are cashing out.

SPEAKER_00 22:27

How can I put this best? Because the world is so connected. Liam could jump on TikTok tomorrow and see a jeweler make$30,000 from gold bullying.

SPEAKER_01 22:39

Gotcha.

SPEAKER_00 22:39

I'll go buy some gold because it looks like everybody's making money on gold. Gold's gone up, gold's gone up. What happens is the market realizes wait, there's not as much shortage of a goal of gold because of this war as we initially anticipated.

SPEAKER_01 22:52

Okay.

SPEAKER_00 22:53

Let's you know what? There's a lot more supply in the market than we initially anticipated. Okay, we'll drop it back. So that you bought you bought as it's inflating. All that's happened in the last week or so is you're right, a correction.

SPEAKER_01 23:06

Okay.

SPEAKER_00 23:06

A correction to what the actual shortage is in the market, not a correction towards, oh yeah, no, no, no, it's going back. And the thing is, whenever you watch metals during recessionary periods like silver, gold bullion, what you'll notice is it inflates, dips, stays. It's not like oil. You'll see oil go up and down, up and down, up and down. Oil can shoot right up, it can shoot right down. Metals are different. Once they go up, might correct a bit, but they kind of stay. So when you say don't buy and sell investments out of fear, that's a very, very good point because we saw it back in 2021. Okay. Wise man learns from like the mistakes of the past, all that sort of stuff. Yep. NFTs. Does everybody remember the NFT heart market?

SPEAKER_02 23:56

I remember NFTs, yeah.

SPEAKER_00 23:58

Do you remember how often I was just looking at this going, this is fucking dumb? It's so dumb.

SPEAKER_03 24:04

I just remember sitting there going, This is fucking stupid. Yeah, they're like in the blockchain, you can tell this is the original image. And I'm like, but it's a monkey. Yeah, who cares? It was Pokemon cards. At least Pokemon cards. No, Pokemon cards were cooler. That's what I'm saying. At least Pokemon cards, and also you get a physical thing. Like you like the Chinese Charizard. Exactly. If you get that Charizard, that's like you can put it on a necklace.

SPEAKER_00 24:28

What's his name, Kevin O'Leary? Uh, but this, like I think a Paul brother did it as well. Yeah, like the NFT market was stupid.

SPEAKER_02 24:36

Um so speculative.

SPEAKER_00 24:39

So speculative. And I think I saw a statistic the other day, Logan Paul, he had an NFT worth 6.55 million or 655,000. It was one of the two.

SPEAKER_02 24:48

Yeah.

SPEAKER_00 24:48

And now it's worth$25.

SPEAKER_02 24:49

Yeah, it's literally.

SPEAKER_00 24:50

And that is the best, clearest example of don't buy when everything is awry. Because what happens is you can get scanned very quickly. I think you need to understand things before you invest in them. Otherwise, you may as well just go to a casino, put money on, put money on red.

SPEAKER_02 25:10

Yeah. Invest in something real as well. Like property. Yeah, property, metal.

SPEAKER_00 25:15

Yeah, and that's the thing. So even oil, like we don't know what that's gonna do. But, anyways, general advice, speak to a professional before you do anything like that. And focus on diversification of your prof or your property, your portfolio. This is going to be for our more advanced listeners or our more advanced individuals.

SPEAKER_02 25:32

Yeah, so if you've got like a bunch of investment properties, a bunch of stocks, a bunch of this, that, and the other.

SPEAKER_00 25:37

I wouldn't even say a bunch because you can you can diversify even with like 10 grand if it's just in markets, or you can diversify in property. Like let's say I've got two investment properties, but then I've also got some money in shares. Okay. Maybe you look at the share market and you go, well, we're in a contractionary market. I can't really imagine Qantas spiking up in value right now. Yeah. Or I can't imagine Virgin Australia really growing in value where nobody's taking flights and petrol is costing so much.

SPEAKER_02 26:08

Which includes jet fuel.

SPEAKER_00 26:09

Correct. Okay. Maybe I take the money out of there, but what do you have? We changed our migration status in Australia? No. Have we changed our uh construction status or anything? No. Okay, well, maybe because the war is all the way over there, you're gonna get a lot of people coming down here and living down here. So is there an opportunity where I could take my$10,000 out of the share market and go buy an off-the-plan property and then in 12 months' time, that off-the-plan property isn't worth$400,000 or whatever it is, you have to put a 2% deposit. I'm just talking out loud. Yes. Calm down, calm down, let me fucking come at me in the comments. But let's say I've done that, and then that contract is now worth$600,000 instead of probably worth$400,000. So always look at the essentials that people need to live because and look for it in areas that are considered safe, as opposed to looking at investments that are speculative, like the NFTs, like NFTs, um, airlines, or you know, uh even shopping. Okay, because those are the ones, especially when money is expensive, money is six percent plus, those are the ones that you might see a dip in this year.

SPEAKER_02 27:28

Yeah, basically, just don't try to get rich quick schemes, are usually a scam.

SPEAKER_00 27:33

Yeah, the best way to put it. Yeah, it's not called the pyramid because it's a square, anyways. What does that mean? I don't know. I don't know.

SPEAKER_02 27:43

For context, because it's getting late in the day. We're tired.

SPEAKER_00 27:47

It's 3 30. Okay, guys, thank you so much for tuning into our episode on recessions. Um, I don't know what's gonna happen next few weeks. This could all be solved tomorrow, straight up, or it could not be. Yeah, but at least we're able to speak on it. And if you got any advice from this, remember it was general, but also just a reminder stay safe out there. Yeah, if you need help with your property or if you need help with any of your property investments, you can visit us at www.itsimple.com.au. As always, that's been Michael. He's Joe. And thank you for listening to the Finance Show Trail. That was a really good outro. We should see that more.