WEBVTT - Shares vs. Property: The Ultimate Wealth-Building Debate with Michael McCarty from moomoo 0:00:00.160 --> 0:00:02.800 This episode of Sugar Mamma's Fireplay is proudly brought to 0:00:02.840 --> 0:00:06.280 you by moomoom, your ultimate investing partner. With low fees, 0:00:06.360 --> 0:00:09.600 intuitive tools and access to over twenty two thousand shares 0:00:09.640 --> 0:00:12.840 and ETFs across the ASEX, US and Hong Kong markets. 0:00:13.200 --> 0:00:16.599 Moomoo makes it easy for everyone, whether you're just starting 0:00:16.600 --> 0:00:20.000 out or a seasoned pro. Plus with twenty four to 0:00:20.120 --> 0:00:25.160 five customer support and chess sponsorship, you can invest with confidence. 0:00:25.239 --> 0:00:27.800 Download the Moomoo app now and take control of your 0:00:27.840 --> 0:00:35.280 financial future today. Welcome back to another episode of Sugar 0:00:35.320 --> 0:00:38.640 Mama's Fireplay. Today, we're tackling a topic that I know 0:00:38.840 --> 0:00:42.919 so many of you are curious about, shares versus property. 0:00:43.479 --> 0:00:46.120 For so long, Australians have been told that property is 0:00:46.120 --> 0:00:48.560 the ultimate investment. You can't go wrong with bricks and 0:00:48.640 --> 0:00:51.000 watar How many times have I heard that? But is 0:00:51.040 --> 0:00:52.479 that really the case? 0:00:52.960 --> 0:00:53.600 To help us. 0:00:53.560 --> 0:00:56.440 Unpack this, I'm thrilled to be joined by Michael McCarthy, 0:00:56.840 --> 0:01:00.160 a renowned market strategist from Moomoom and Mumu is the 0:01:00.200 --> 0:01:03.680 innovative online trading platform that is empowering every day investors 0:01:03.680 --> 0:01:07.040 to take control of their financial future. So in today's episode, 0:01:07.040 --> 0:01:11.399 we're going to explore why shares might just offer a 0:01:11.440 --> 0:01:14.600 few advantages over property. Weren't going to be talking about 0:01:14.640 --> 0:01:19.440 historical returns, lower costs, franking, credits, diversification, liquidity, and so 0:01:19.600 --> 0:01:22.200 much more. I might get a little bit passionate about 0:01:22.200 --> 0:01:25.160 this because I think so many people really do underestimate 0:01:25.200 --> 0:01:28.240 the value of Australian shares. Now, of course, this isn't 0:01:28.280 --> 0:01:31.640 saying property is bad, far fromward, but it's about challenging 0:01:31.680 --> 0:01:35.160 those traditional beliefs and opening your mind to so many 0:01:35.480 --> 0:01:38.759 other options, but also other options to help you build 0:01:38.800 --> 0:01:41.400 wealth and understand that property isn't the bill and end all. 0:01:41.840 --> 0:01:43.800 And we're going to dive into the mindset of course 0:01:43.840 --> 0:01:46.360 that holds so many people back from investing in shares 0:01:46.360 --> 0:01:49.240 and explore how you can actually overcome these barriers to 0:01:49.240 --> 0:01:53.360 help grow your own wealth in a smart, sustainable way. 0:01:53.480 --> 0:01:54.880 So I'm a little bit excited. 0:01:54.920 --> 0:01:59.080 Can we jump in right now together, Michael, I like 0:01:59.160 --> 0:02:00.920 to start the episode. Never have a guest on the 0:02:00.960 --> 0:02:03.640 show to ask you how you are? And it's not 0:02:03.680 --> 0:02:06.040 just a service level how are you? It's a genuine 0:02:06.400 --> 0:02:07.560 how are you going? Right now? 0:02:07.720 --> 0:02:09.840 I'm going really well? Thank you can. I'm in a 0:02:09.880 --> 0:02:14.520 sweet spot. I'm not old enough to be relaxed about things, 0:02:14.560 --> 0:02:16.160 but young enough still to be able to do all 0:02:16.160 --> 0:02:18.160 the things that I want to do. So it's a 0:02:18.160 --> 0:02:19.360 perfect time of life for me. 0:02:19.560 --> 0:02:22.600 Oh, I like the sound of your sweet spot. I 0:02:22.639 --> 0:02:25.520 need to be there more. Well, I don't, I need 0:02:25.520 --> 0:02:26.200 to be there sooner. 0:02:26.440 --> 0:02:29.120 All right, now, I'm really keen to talk about property 0:02:29.200 --> 0:02:31.440 versus shares, and I have a feeling that we probably 0:02:31.440 --> 0:02:35.880 share a common belief, but it really irritates me. And 0:02:35.919 --> 0:02:38.600 I'm tell me, if you have the same problem when 0:02:38.680 --> 0:02:41.280 people tell you that, you know, property is the only 0:02:41.280 --> 0:02:44.160 way you can make money, it's there's no risk, you know, 0:02:44.440 --> 0:02:48.120 this very sort of one dimensional opinion of property. So 0:02:48.240 --> 0:02:51.639 I'm really keen to give our listeners, most importantly, some 0:02:51.800 --> 0:02:54.960 facts so that they can sort of set the story straight. 0:02:55.000 --> 0:03:01.480 I should say about really Australian shares versus property, because 0:03:01.520 --> 0:03:03.320 I feel like there's just so much misinformation, there's so 0:03:03.400 --> 0:03:06.120 much misunderstanding, and it's everyone just looks at it as 0:03:06.120 --> 0:03:09.440 a tangible asset. So I am very excited about this conversation. 0:03:09.480 --> 0:03:10.560 I'm just a little bit excited. 0:03:10.560 --> 0:03:13.320 If you can't tell can we obviously before we begin, 0:03:13.520 --> 0:03:16.600 it's general advice only here. This is, you know, educational 0:03:16.600 --> 0:03:18.720 purposes only. If you hear something you think, ohy. 0:03:18.520 --> 0:03:19.320 Should I be doing that? 0:03:19.600 --> 0:03:22.880 Of course, go see a financial planner. But I want 0:03:22.919 --> 0:03:25.560 to start with the historical returns because I said we're 0:03:25.560 --> 0:03:27.240 going to focus on facts and figures here, because I 0:03:27.240 --> 0:03:30.440 really want to arm our listeners with some valuable important information, 0:03:30.600 --> 0:03:34.120 not just opinions. What are some of the historical returns 0:03:34.160 --> 0:03:36.960 that you can tell us about shares versus property over 0:03:37.040 --> 0:03:37.880 the long run. 0:03:38.640 --> 0:03:41.480 Well, there's a lot to unpack here, and I love 0:03:41.480 --> 0:03:44.360 the way you bring the controversy can because this is 0:03:44.360 --> 0:03:46.680 a controversial question and the reason for that is people 0:03:46.760 --> 0:03:49.520 have vested interest on both sides of the question. Right. 0:03:49.680 --> 0:03:51.960 People who sell property want to tell you property is 0:03:51.960 --> 0:03:54.280 a better investment. People who sell shares want to tell 0:03:54.320 --> 0:03:56.640 you that shares are a better investment. So to be 0:03:56.880 --> 0:03:59.600 fair about this, we have to start by comparing like 0:03:59.680 --> 0:04:02.520 forul life like. So we look at them as investments. 0:04:02.600 --> 0:04:04.760 That is, you buy a house, you're not living in it, 0:04:04.760 --> 0:04:06.840 you're renting it out, and you're getting a return on it. 0:04:07.040 --> 0:04:11.240 That's an investment style. And comparing that to buying shares 0:04:11.320 --> 0:04:13.920 and getting dividends on your shares. Now, there are a 0:04:13.960 --> 0:04:16.000 lot of different studies over the years, so I went 0:04:16.080 --> 0:04:18.000 for the longest study I could find. 0:04:18.400 --> 0:04:20.440 I like that from I'm a long term investor. I 0:04:20.440 --> 0:04:23.240 think that's more important than these little bite sized pockets 0:04:23.240 --> 0:04:24.520 of fragments and type of time. 0:04:24.680 --> 0:04:27.640 And so this study ran from nineteen twenty six to 0:04:27.720 --> 0:04:31.000 twenty twenty three, ninety seven years worth of data. 0:04:31.160 --> 0:04:33.560 I like the son of this same reliable and it. 0:04:33.560 --> 0:04:36.680 Was quoted by somebody I respect, doctor Shane Oliver, very 0:04:36.680 --> 0:04:40.760 well known in Australia. I loved sharing, and his conclusion 0:04:40.800 --> 0:04:43.560 over that very long period was that shares are the 0:04:43.600 --> 0:04:46.440 superior return. Now, the difference wasn't huge. It was eleven 0:04:46.480 --> 0:04:49.479 point three percent versus ten point nine percent. Now, that 0:04:49.520 --> 0:04:52.440 doesn't sound very big, but when you allow for the 0:04:52.520 --> 0:04:56.359 compounding of interest year on year, that point four percent 0:04:56.440 --> 0:04:59.279 difference turns out to be a big difference in terms 0:04:59.279 --> 0:05:00.720 of the money you would have earned if you'd put 0:05:00.760 --> 0:05:03.240 one thousand dollars into property or one thousand dollars into 0:05:03.279 --> 0:05:07.080 shares in nineteen twenty six. So that's the best study 0:05:07.120 --> 0:05:09.360 I could find. I have seen plenty of others in 0:05:09.400 --> 0:05:12.240 my searches. One of the more recent ones covered the 0:05:12.279 --> 0:05:15.200 period nineteen ninety three to twenty nineteen, so it stripped 0:05:15.200 --> 0:05:18.280 out the GFC effects. Sorry it had the gfcnup, but 0:05:18.320 --> 0:05:21.159 it stripped out the COVID effects. Anyway, the net result 0:05:21.160 --> 0:05:23.920 there was eight and a half percent versus seven percent, 0:05:24.040 --> 0:05:26.680 so a bigger advantage for shares over that period, which 0:05:26.680 --> 0:05:30.480 surprised me because that's a strong period of property growth. 0:05:30.880 --> 0:05:33.679 Wow, And does those figures look at the net returns 0:05:33.680 --> 0:05:37.200 because obviously it's very expensive to get into the property market, 0:05:37.320 --> 0:05:39.520 like stamp duty is a bitch, you know, it's a 0:05:39.520 --> 0:05:40.240 big setback. 0:05:40.600 --> 0:05:43.800 It doesn't take into account those transaction costs costs. It's 0:05:43.839 --> 0:05:46.000 hard to compare light for like you buy property once 0:05:46.040 --> 0:05:48.320 and you sell it once, whereas with shares, people are 0:05:48.360 --> 0:05:52.760 regularly turning over their portfolios or trimming them or reshaping them, 0:05:52.800 --> 0:05:56.839 so the transaction costs aren't taken into account there, but 0:05:57.000 --> 0:06:01.359 things like tax deductibility are, so we'd have to factor 0:06:01.400 --> 0:06:04.360 those in. And of course they're very different kinds of investments. 0:06:05.120 --> 0:06:08.200 Now, I spoke about the cost of investing in stamp duty, 0:06:08.600 --> 0:06:11.160 and obviously one of the biggest advantages of shares is 0:06:11.200 --> 0:06:15.680 the lower ongoing costs compared to property. Can explain why 0:06:15.720 --> 0:06:18.560 this matters so much for investors. 0:06:18.800 --> 0:06:22.560 It's crucial. Containing your costs is one of the aspects 0:06:22.600 --> 0:06:26.720 of investment that is very often neglected. The reality is, 0:06:27.000 --> 0:06:31.080 the cheaper your cost, the lower the friction of your transactions, 0:06:31.360 --> 0:06:33.520 the better off you'll be in the long run because 0:06:33.520 --> 0:06:35.920 that's money that you otherwise would have invested that you've 0:06:35.920 --> 0:06:38.440 had to spend on the cost of the transaction. So 0:06:38.520 --> 0:06:43.680 stamp duty and realistate agents commissions are a very significant 0:06:43.720 --> 0:06:47.000 impediment to investment success. It doesn't mean but you can't 0:06:47.040 --> 0:06:50.000 overcome them, but it's a hurdle that has to be jumped. 0:06:50.000 --> 0:06:52.279 Whereas when you're talking about shares and it's three dollars 0:06:52.360 --> 0:06:56.039 a trade, the transaction friction here is very very low, 0:06:56.120 --> 0:06:59.320 so that gives you a lot more flexibility about how 0:06:59.400 --> 0:06:59.920 you invest. 0:07:00.960 --> 0:07:02.880 I'm just the wear and tear, you know, having to 0:07:02.920 --> 0:07:05.279 get a you know, an apartment for example, of a 0:07:05.279 --> 0:07:07.960 fresh coat of paint or the carpets now worn out, 0:07:08.000 --> 0:07:10.400 and you can't no one's fault. It's just natural wear 0:07:10.400 --> 0:07:12.880 and tear like that. They're expensive costs and you know, 0:07:13.200 --> 0:07:17.239 I will admit I own property and I own shares, 0:07:17.440 --> 0:07:19.960 and I never get a phone call about having to 0:07:20.040 --> 0:07:22.560 chip money into my share portfolio ever, if anything that 0:07:22.680 --> 0:07:26.520 pays me constantly, whereas I'm constantly having to I guess 0:07:27.040 --> 0:07:30.560 fill the holes on the leaking bucket literally for you know, 0:07:30.640 --> 0:07:35.120 investment properties. It's just so like just frustrating, you know, 0:07:35.320 --> 0:07:37.400 and it just it really does impact your cash flow. 0:07:37.720 --> 0:07:41.000 Interesting to a friend and she bought an investment property 0:07:41.000 --> 0:07:42.840 because somebody told her to, and she's like, I just 0:07:43.280 --> 0:07:46.440 I'm constantly being hit with bills, and then my tenant 0:07:46.440 --> 0:07:46.960 moves out. 0:07:47.120 --> 0:07:48.480 Then I'm stuck for three weeks. 0:07:48.600 --> 0:07:50.840 Then I have to pay you know, the the property 0:07:50.840 --> 0:07:53.560 manager and other you know, couple of weeks rental because 0:07:53.560 --> 0:07:55.080 they found me a new tenant even though I've just 0:07:55.120 --> 0:07:56.800 had three weeks without it and I've had to drop 0:07:56.840 --> 0:07:59.840 the rent. It's it's just the constant dramas and headaches. 0:08:00.080 --> 0:08:02.600 As I look at that and compare to my comparison 0:08:02.640 --> 0:08:04.600 to my property and what I've also your personal experience, 0:08:04.640 --> 0:08:08.000 it's just it's just so much easier and I lighter, 0:08:08.400 --> 0:08:09.760 more efficient, U super time. 0:08:09.760 --> 0:08:12.160 You'll never get a bad tenant in the share port Polio. 0:08:12.600 --> 0:08:14.840 That's so true. I love that. 0:08:16.240 --> 0:08:19.720 All right. Can we talk about franking credits because you 0:08:19.760 --> 0:08:22.320 know I am you know, I'm a huge fan of 0:08:22.320 --> 0:08:23.920 Peter Thornhill. I've had him on the show a couple 0:08:23.920 --> 0:08:25.520 of times. I know a lot of my listeners also 0:08:25.600 --> 0:08:29.480 love Peter Thornhill. Franking credits are obviously very unique to 0:08:29.520 --> 0:08:32.959 the strands share market, particularly with those industrial shares, and 0:08:33.559 --> 0:08:35.559 you know the fact that they grow on average sort 0:08:35.559 --> 0:08:37.959 of forty five percent per annum over the long run. 0:08:38.280 --> 0:08:40.640 Can you just break down for our listeners, well, why 0:08:40.640 --> 0:08:43.439 they're so important, how they can really boost your income. 0:08:43.800 --> 0:08:47.040 That is obviously the dividend income, particularly right now with 0:08:47.160 --> 0:08:49.840 inflation worries for retirement, it's. 0:08:49.760 --> 0:08:53.280 Crucial, and franking credits is one of the key drivers 0:08:53.400 --> 0:08:56.600 of share ownership. It's one of the reasons so many people, 0:08:56.640 --> 0:08:59.800 particularly in retirement, own shares. It's that ability not just 0:09:00.320 --> 0:09:02.720 to get the cash flow that comes with the dividends, 0:09:02.840 --> 0:09:06.040 but those tax credits can be crucial. And the principle 0:09:06.080 --> 0:09:09.480 underlying franking credits is very straightforward. The companies have already 0:09:09.480 --> 0:09:12.120 paid tax on these profits, and because the tax has 0:09:12.160 --> 0:09:15.520 been paid, the investor, the shareholder doesn't have to pay 0:09:15.600 --> 0:09:18.280 tax on the money that's distributed to them as a dividend, 0:09:18.640 --> 0:09:21.720 and that has the effect of increasing the value by 0:09:21.800 --> 0:09:24.560 forty two percent. So if you get a ten dollar 0:09:24.840 --> 0:09:27.400 dividend and it's fully franked and you're paying the top 0:09:27.440 --> 0:09:30.439 tax rate, that real value is not ten dollars, it's 0:09:30.480 --> 0:09:35.520 fourteen dollars twenty. And that big grossing up of franking 0:09:35.559 --> 0:09:38.240 credits is one of the key reasons so many people 0:09:38.360 --> 0:09:42.640 value dividends so highly. And one area where the income 0:09:42.640 --> 0:09:45.720 that comes from shares is clearly superior to the rent 0:09:45.720 --> 0:09:46.920 that's paid on properties. 0:09:47.240 --> 0:09:50.400 Yeah, I think people always need to sit to realize 0:09:50.400 --> 0:09:53.160 this for themselves, like have those two asset classes and 0:09:53.200 --> 0:09:56.600 go hang on this one is just it's so much 0:09:56.640 --> 0:09:58.520 more superior on so many different levels. 0:09:58.960 --> 0:10:02.319 Well about it is I think that shares have disadvantages 0:10:02.360 --> 0:10:05.640 that you can't negatively gear shares. You can. You can 0:10:05.640 --> 0:10:07.840 borrow to buy shares and negatively gear them if you want. 0:10:07.840 --> 0:10:10.600 So that tax aspect is the same. Both property and 0:10:10.640 --> 0:10:12.920 shares are subject to capital gains tax, so in that 0:10:12.960 --> 0:10:16.240 respect they're the same. But the big difference between shares 0:10:16.240 --> 0:10:19.760 and property when it comes to tax is those franking credits. 0:10:19.559 --> 0:10:23.040 And they're so valuable, particularly you know for self under retirees, 0:10:23.520 --> 0:10:26.440 you know in pension phase where they don't pay any tax. 0:10:26.920 --> 0:10:30.079 You know, I've had clients receive like seventy thousand dollars 0:10:30.160 --> 0:10:32.959 in tax refunds because of purely because of franking credits. 0:10:33.040 --> 0:10:35.800 Like that is a massive boost to your retirement income 0:10:36.000 --> 0:10:39.680 and it gives you so much more longevity and sustainability 0:10:39.679 --> 0:10:43.200 and financial independence. And part of my own financial investment 0:10:43.200 --> 0:10:46.400 strategy myself is to build up my franking dividends. 0:10:46.960 --> 0:10:49.000 Can we talk about the property miss. 0:10:48.720 --> 0:10:51.360 And give them a bit of a challenge In Australia 0:10:51.400 --> 0:10:55.040 there is such a cultural bias towards property and property investment. 0:10:55.760 --> 0:10:57.600 Why do you think it is that so many people 0:10:57.679 --> 0:11:01.000 just automatically assume that property is the best, the number 0:11:01.000 --> 0:11:03.440 one most important asset to build wealth? 0:11:04.000 --> 0:11:05.760 Is it because it's a tangible asset? 0:11:05.840 --> 0:11:06.080 Is that? 0:11:06.200 --> 0:11:09.680 Is it as simple and is it embarrassingly basic as that? 0:11:11.280 --> 0:11:13.360 Well? I think there are a lot of threads to that, 0:11:13.520 --> 0:11:16.400 but that is definitely one of them. People favor we're 0:11:16.480 --> 0:11:19.040 human beings. People favor things that they can put their 0:11:19.040 --> 0:11:22.200 hands on, you know, that they can touch and that's 0:11:22.200 --> 0:11:27.720 a natural human thing. It's completely illogical. It's completely illogical. Right. 0:11:27.800 --> 0:11:30.360 The house only has value because people believe it has value. 0:11:30.480 --> 0:11:32.520 That's the same as money, that's the same as shares. 0:11:32.720 --> 0:11:35.040 They only have value because people believe it. But people 0:11:35.080 --> 0:11:37.680 think because they can touch a house, it's different. It's not. 0:11:38.080 --> 0:11:41.719 But that is a normal human reaction. There are a 0:11:41.720 --> 0:11:45.439 couple of other reasons why people seem to think that. 0:11:45.520 --> 0:11:48.559 One of them is the experience. A lot of people's families, 0:11:48.600 --> 0:11:52.240 their friends have had very good experiences investing in property, 0:11:52.480 --> 0:11:54.720 and that's a good thing, but they would have been 0:11:54.720 --> 0:11:57.720 better off in shares, and that's not visible. They see 0:11:57.760 --> 0:11:59.800 the house, they see how well they've done, They see 0:11:59.800 --> 0:12:03.480 them retirement, going on holidays every half year. They see 0:12:03.520 --> 0:12:05.440 all that, and they think that it's come from property. 0:12:05.440 --> 0:12:08.080 In so many cases it has, But they don't see 0:12:08.320 --> 0:12:11.760 the share portfolios that actually underpinned you know, those those 0:12:11.800 --> 0:12:15.640 fabulous holiday homes that people have on a coach somewhere, 0:12:15.720 --> 0:12:18.800 or all those things. Because you see the house and 0:12:18.840 --> 0:12:21.880 because people tell stories. I mean Sydney in particular is 0:12:21.880 --> 0:12:23.320 a property obsessed city. 0:12:23.440 --> 0:12:25.160 I mean, I've got to a dinner party, that's all 0:12:25.920 --> 0:12:28.480 I can't stand it. I'm boring. 0:12:30.240 --> 0:12:34.000 So I think it's that shared success that that has 0:12:34.040 --> 0:12:37.080 given them the reputation. Nothing wrong with being in property, 0:12:37.160 --> 0:12:39.520 but if you want the better investment, in my view, 0:12:39.800 --> 0:12:42.040 you must look at shares Queen. 0:12:42.240 --> 0:12:44.840 Move on and talk about liquidity, because this is a 0:12:44.880 --> 0:12:47.200 big one, you know, with property, and I think a 0:12:47.200 --> 0:12:48.880 lot of people, particularly. 0:12:48.360 --> 0:12:51.160 Young investors, don't realize this. 0:12:51.400 --> 0:12:53.560 And I mean it's not and I don't mean that 0:12:53.640 --> 0:12:58.040 in a meaning or patronizing manner, but you know, with 0:12:58.160 --> 0:13:01.920 property it's expensive, asterhol You've got strata, you know all 0:13:01.960 --> 0:13:03.840 the lovely expenses that come with it. And then of 0:13:03.840 --> 0:13:06.760 course you might get special strata. If you need to 0:13:07.600 --> 0:13:09.760 come up with some money and you don't have sufficient 0:13:09.840 --> 0:13:12.320 emergency money, you can get stuck. Because it's not a 0:13:12.360 --> 0:13:14.959 liquid asset. You can't. So you get a ten thousand 0:13:14.960 --> 0:13:16.920 dollars special strata leven, you don't have to spare ten 0:13:16.920 --> 0:13:20.560 thousand dollars lying around. You can't just sell the front 0:13:20.559 --> 0:13:23.679 door or sell one bedroom, even though it is probably worth. 0:13:23.520 --> 0:13:26.560 More than ten thousand dollars. You can't actually do that. 0:13:26.720 --> 0:13:27.400 You're stuck. 0:13:27.760 --> 0:13:31.320 You Whereas with shares, if you know you had to 0:13:31.600 --> 0:13:33.480 you could really sell ten thousand dollars with the shares 0:13:33.480 --> 0:13:35.920 and that money would be in your account in two 0:13:36.160 --> 0:13:41.080 working days. Yeah, So a lot of people really, I guess, 0:13:41.240 --> 0:13:44.000 ignore until it's maybe sometimes too late or they caught 0:13:44.000 --> 0:13:46.320 out in that scenario where they have to suddenly come 0:13:46.360 --> 0:13:49.280 up with money. Commit to the how the liquidity of 0:13:49.320 --> 0:13:54.240 shares can actually add even more simplicity and efficiency and 0:13:54.400 --> 0:13:56.760 flexibility into someone's investment strategy. 0:13:57.000 --> 0:14:00.040 Absolutely, and the returns argument and the tax argument, and 0:14:00.280 --> 0:14:01.920 you know that can all be had, but this is 0:14:01.960 --> 0:14:05.080 where shares clearly come out on top. That ability to 0:14:05.120 --> 0:14:08.959 liquidate your portfolio in a single day is very powerful. 0:14:09.000 --> 0:14:11.880 If things start going wrong, either for you personally or 0:14:11.920 --> 0:14:14.400 in the market, you can act, and if you act, 0:14:14.640 --> 0:14:17.120 you can get results very very quickly. Whereas in a 0:14:17.160 --> 0:14:20.160 property market slow down, you might be waiting years for 0:14:20.480 --> 0:14:22.480 a good buyer to come along, and if you have 0:14:22.560 --> 0:14:24.560 to sell, you might have to sell at a price 0:14:24.600 --> 0:14:27.080 that is very painful for you. And that lack of 0:14:27.120 --> 0:14:30.120 liquidity and property is a huge disadvantage. And you touched 0:14:30.160 --> 0:14:32.880 on another aspect of it. You can slice off a 0:14:32.920 --> 0:14:34.920 bit of your portfolio. You've got a sudden tax bill 0:14:34.960 --> 0:14:37.360 out of nowhere you weren't expecting. You can sell a 0:14:37.400 --> 0:14:39.560 little bit of your portfolio to cover that cash flow, 0:14:39.600 --> 0:14:42.320 and then as you recoup the cash over time, you 0:14:42.360 --> 0:14:44.960 can reinvest it back in the market. So, as you 0:14:45.000 --> 0:14:47.240 point out, you can't do that with a property. So 0:14:47.760 --> 0:14:51.840 it's not just the liquidity, it's the ability to reshape 0:14:51.880 --> 0:14:54.480 your portfolio to suit your life at that given point 0:14:54.480 --> 0:14:58.560 in time. That really makes shares a much more flexible 0:14:58.760 --> 0:15:00.280 and powerful investment. 0:15:00.200 --> 0:15:03.640 Particularly as well diversification. You know, if you've had one 0:15:03.960 --> 0:15:07.440 stock in your portfolio to do incredibly well, and you think, okay, 0:15:07.480 --> 0:15:10.120 I've got a huge exposure to this particular company, all 0:15:10.200 --> 0:15:13.400 this particular industry. I want to take some money off 0:15:13.400 --> 0:15:15.960 the table and move on to maybe the next best thing, 0:15:16.120 --> 0:15:18.000 or you know, just spread my eggs. 0:15:18.600 --> 0:15:20.280 You can do that with shares. 0:15:20.600 --> 0:15:22.320 With property, you say you bought a property and did 0:15:22.400 --> 0:15:25.120 very well from it, you've got to sell that whole 0:15:25.280 --> 0:15:28.040 entire asset, whereas you could with the share portfolio, you 0:15:28.040 --> 0:15:30.440 could maybe sell half of that holding and then spread 0:15:30.440 --> 0:15:32.640 it across say five other companies. 0:15:33.680 --> 0:15:34.400 You're really stuck. 0:15:34.400 --> 0:15:36.880 And then of course you're triggering with property a massive, 0:15:37.120 --> 0:15:40.040 big hit with the ato assuming you've made a capital growth, 0:15:40.600 --> 0:15:42.120 you know you've got to pay that to the ATO, 0:15:42.160 --> 0:15:44.560 so you take a massive step backwards when it comes 0:15:44.560 --> 0:15:48.200 to releasing that particular asset in comparison to as you said, 0:15:48.200 --> 0:15:50.800 you can kind of quarantine the losses if it's going down, 0:15:50.840 --> 0:15:55.320 but you can also help strategically manage your tax by going, okay, 0:15:55.320 --> 0:15:57.640 well if I sell this asset, I can you know, 0:15:57.680 --> 0:15:59.400 offset the tax here. You can be a lot more 0:15:59.400 --> 0:16:04.640 strategic actually mindfully and proactively plan those transactions with that. 0:16:04.680 --> 0:16:06.880 You know the fact that shares are so incredibly. 0:16:06.440 --> 0:16:08.760 Liquid, Oh absolutely, I mean it comes to things like 0:16:08.800 --> 0:16:11.880 the capital gains tax discount. For example, being able to 0:16:11.920 --> 0:16:13.880 sell on day three hundred and sixty six rather the 0:16:13.960 --> 0:16:16.600 day three hundred and sixty four is crucial. And of 0:16:16.600 --> 0:16:19.200 course you simply can't time a property sale like that 0:16:19.560 --> 0:16:22.240 when it sells itselves. You can move it around if 0:16:22.240 --> 0:16:25.400 you can, but you're committed to it, so it's not 0:16:25.600 --> 0:16:27.400 just having all your money tied up and then getting 0:16:27.440 --> 0:16:30.560 slugged when you finally do release the value that you've made. 0:16:30.720 --> 0:16:32.880 But there's another aspect to it as well. When we 0:16:32.920 --> 0:16:35.440 talk about property, is if every property is the same 0:16:35.440 --> 0:16:38.760 but because every property is unique. So the property market 0:16:38.840 --> 0:16:40.400 might be going up and you might be sitting in 0:16:40.400 --> 0:16:40.760 a house. 0:16:40.800 --> 0:16:44.680 It's not right, I know, it's sometimes I find it. 0:16:44.560 --> 0:16:47.440 So it's little pockets, you know, you know, houses of 0:16:47.480 --> 0:16:50.000 that particular you know, that particular side of the suburb 0:16:50.040 --> 0:16:54.640 or that particular area, or even like particular price points. 0:16:54.640 --> 0:16:57.360 People think that the property market all grows at say 0:16:57.360 --> 0:16:59.200 seven percent or five percent, whatever the number you want 0:16:59.200 --> 0:17:01.440 to use. Actually it doesn't work like that. There are 0:17:01.440 --> 0:17:05.359 certain markets you know that you know, see five hundred 0:17:05.400 --> 0:17:07.560 to seven hundred thousand other property market it might be booming, 0:17:07.600 --> 0:17:09.680 but whereas something over a say two or three million 0:17:09.720 --> 0:17:12.520 dollars may have softened. Like it, it doesn't all work 0:17:12.600 --> 0:17:16.240 with this this return that just is unanimously across the 0:17:16.240 --> 0:17:21.840 whole property market. There's so many complicated sectors and pockets, 0:17:21.880 --> 0:17:24.480 and you know, depending on obviously what the market's doing 0:17:24.480 --> 0:17:26.280 and what the economy is, and what people are looking 0:17:26.320 --> 0:17:28.240 for and the type of people also in the market 0:17:28.280 --> 0:17:30.679 that are shopping for like that drives those numbers, and 0:17:31.200 --> 0:17:33.880 it doesn't. It's not like a sweeping blanket return. 0:17:33.880 --> 0:17:36.040 No, exactly. And if you buy a house or an apartment, 0:17:36.080 --> 0:17:39.200 you're committed to that one house or apartment. It might outperform, 0:17:39.240 --> 0:17:41.560 it might underperform, but your risk is tied to that 0:17:41.640 --> 0:17:44.720 one investment. Whereas if you buy a share portfolio, you 0:17:44.720 --> 0:17:48.280 can diversify across sectors, you can diversify across industries, you 0:17:48.320 --> 0:17:53.280 can diversify across national borders and across currencies to give 0:17:53.320 --> 0:17:56.240 you a better risk profile for the returns you're seeking. 0:17:56.480 --> 0:17:58.879 You don't have that opportunity in property. You're committed to 0:17:58.920 --> 0:18:01.680 the one property, and if it doesn't do well, there's 0:18:01.720 --> 0:18:03.439 not a lot you can do about it. So you 0:18:03.480 --> 0:18:05.760 could be in that terrible situation where everybody's talking about 0:18:05.760 --> 0:18:09.320 how the property market's rising and you're quietly sitting there thinking, well, 0:18:09.359 --> 0:18:12.120 my property is not. That's not the same in shares. 0:18:12.520 --> 0:18:15.600 In shares, you can quickly adapt and roll towards those 0:18:15.640 --> 0:18:18.000 shares that are performing well, and you can get out 0:18:18.040 --> 0:18:20.399 of the shares that are not performing well, so that 0:18:20.440 --> 0:18:23.040 you've got much more flexibility and much more power to 0:18:23.080 --> 0:18:25.760 control your risk when it comes to a share portfolio 0:18:25.760 --> 0:18:27.240 as opposed to a property. 0:18:27.840 --> 0:18:29.879 Look, we're going to talk about diversification because I think 0:18:29.880 --> 0:18:32.680 it's really important because a lot of people don't really 0:18:32.760 --> 0:18:35.639 know how to actually diversify your portfolio and why it 0:18:35.680 --> 0:18:37.639 is so incredibly important. We're just going to take a 0:18:37.720 --> 0:18:42.359 very quick break to talk about Moomo. 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