1 00:00:00,440 --> 00:00:03,640 Speaker 1: Welcome to Fear and Greed, Sunday feature oh Michael Thompson. 2 00:00:04,000 --> 00:00:06,840 Speaker 1: Every week we release a sister podcast called How Do 3 00:00:06,920 --> 00:00:10,320 Speaker 1: They Afford That, featuring me and financial planner Canna Campbell. 4 00:00:10,320 --> 00:00:14,240 Speaker 1: It's all about personal finance, it's all about managing money, investing, 5 00:00:14,520 --> 00:00:18,560 Speaker 1: working towards financial independence. Today, I want to share with 6 00:00:18,600 --> 00:00:22,079 Speaker 1: you one of our most popular episodes. It was published 7 00:00:22,239 --> 00:00:26,120 Speaker 1: late last year and it features an interview with Peter Thornhill. So. 8 00:00:26,200 --> 00:00:29,920 Speaker 1: Peter is the author of Motivated Money. He's also Canna's 9 00:00:29,920 --> 00:00:33,080 Speaker 1: money mentor, and he's got quite a story to tell, 10 00:00:33,120 --> 00:00:37,400 Speaker 1: in particular how he started investing only in his fifties 11 00:00:37,640 --> 00:00:42,360 Speaker 1: and has managed to build an investment portfolio worth ten 12 00:00:42,800 --> 00:00:46,600 Speaker 1: million dollars. It is quite an incredible story. How Do 13 00:00:46,640 --> 00:00:49,280 Speaker 1: They Afford That? Comes out every Wednesday in its own 14 00:00:49,360 --> 00:00:52,680 Speaker 1: feed wherever you listen to podcasts, I hope you enjoy it. 15 00:00:55,360 --> 00:00:57,720 Speaker 1: Welcome to How Do They Afford That? The podcast that 16 00:00:57,720 --> 00:01:00,480 Speaker 1: peaks into the financial lives of every day Australia. I'm 17 00:01:00,480 --> 00:01:02,840 Speaker 1: Michael Thompson. I'm a writer and the co host of 18 00:01:02,880 --> 00:01:06,080 Speaker 1: the business news podcast Fear and Greed, and as always 19 00:01:06,120 --> 00:01:09,119 Speaker 1: I'm with Canna Campbell. Financial planner, founder of Sugar Mumber 20 00:01:09,200 --> 00:01:13,640 Speaker 1: TV financial literacy platform that you find pretty much everywhere, 21 00:01:13,680 --> 00:01:15,760 Speaker 1: and I say that every time, but you really are everywhere. 22 00:01:15,760 --> 00:01:17,800 Speaker 1: You're on YouTube, and you've got podcasts, you got books, 23 00:01:17,800 --> 00:01:22,000 Speaker 1: you've got Instagram and TikTok and everywhere everywhere. 24 00:01:22,000 --> 00:01:25,800 Speaker 2: And my Budget cash Flow Academy has launched so people 25 00:01:25,840 --> 00:01:29,280 Speaker 2: can actually do an online course, self paced with me 26 00:01:29,680 --> 00:01:31,040 Speaker 2: to learn how to master their budget. 27 00:01:31,160 --> 00:01:33,720 Speaker 1: That's via your website, isn't it. That's correact. Well, there 28 00:01:33,720 --> 00:01:36,160 Speaker 1: we go. So now you're also on your website, so 29 00:01:36,200 --> 00:01:38,320 Speaker 1: you're on the internet, which was probably kind of the 30 00:01:38,360 --> 00:01:41,240 Speaker 1: place where we probably should have started. We have something 31 00:01:41,240 --> 00:01:42,680 Speaker 1: a little bit different today, Canna. 32 00:01:42,920 --> 00:01:44,640 Speaker 2: I say a little bit special. 33 00:01:45,160 --> 00:01:47,520 Speaker 1: Yes, yes, a little bit special. But I'm going to 34 00:01:47,560 --> 00:01:50,320 Speaker 1: be honest, I'm a little bit apprehensive about this one 35 00:01:50,400 --> 00:01:53,680 Speaker 1: because we have a special guest joining us in the studio. 36 00:01:54,000 --> 00:01:58,560 Speaker 1: Is in fact your own money mentor Peter's correct, Peter Thornhill. 37 00:01:58,640 --> 00:02:01,880 Speaker 1: And now Peter's been workinginancial services for something like forty 38 00:02:03,080 --> 00:02:05,920 Speaker 1: fifty years, so I was trying to be polite and 39 00:02:06,000 --> 00:02:09,079 Speaker 1: kind of reduce it slightly, but you know, fifty fifty years, 40 00:02:09,240 --> 00:02:12,840 Speaker 1: they business, your business, and your book is called Motivated Money. 41 00:02:13,320 --> 00:02:15,720 Speaker 1: You consult to a bunch of financial institutions, and your 42 00:02:15,760 --> 00:02:20,880 Speaker 1: approach to building and maintaining wealth has pretty much become legendary. 43 00:02:21,880 --> 00:02:25,799 Speaker 1: The reason, though, that I am so apprehensive about this 44 00:02:26,680 --> 00:02:30,000 Speaker 1: is that, Peter, when Canna told me that you were 45 00:02:30,040 --> 00:02:34,520 Speaker 1: going to be joining us in the studio, she said, Michael, 46 00:02:35,400 --> 00:02:39,320 Speaker 1: he's going to eat you alive. And then and then 47 00:02:39,400 --> 00:02:42,520 Speaker 1: Canne you refuse to tell me why you wouldn't even 48 00:02:42,520 --> 00:02:44,200 Speaker 1: give me a hint as to what I was in for? 49 00:02:44,320 --> 00:02:48,520 Speaker 1: So you understand then why I am nervous. Peter Thornhill, 50 00:02:48,560 --> 00:02:49,720 Speaker 1: welcome to how do they afford that? 51 00:02:50,360 --> 00:02:54,760 Speaker 3: Thank you for inviting me in, Canna? 52 00:02:54,919 --> 00:02:57,400 Speaker 1: Okay, the two of you together is very ominous. And 53 00:02:57,480 --> 00:03:00,200 Speaker 1: the way you share these kind of little glances across 54 00:03:00,200 --> 00:03:02,720 Speaker 1: going Let's get him. Oh, I don't still don't know 55 00:03:02,800 --> 00:03:06,120 Speaker 1: what I'm in for here, but look, we actually need 56 00:03:06,160 --> 00:03:08,280 Speaker 1: to start before we get into it. Can we just 57 00:03:08,280 --> 00:03:10,079 Speaker 1: need to make it clear that as you're listening, anything 58 00:03:10,080 --> 00:03:12,880 Speaker 1: that we talk about is always general in nature. It 59 00:03:12,960 --> 00:03:16,920 Speaker 1: is never personal investment, strategic or product advice. It is 60 00:03:17,040 --> 00:03:19,400 Speaker 1: purely for financial education purposes only. 61 00:03:19,720 --> 00:03:23,640 Speaker 2: Absolutely everything that you hear is never investment advice, prot 62 00:03:23,639 --> 00:03:26,799 Speaker 2: advice or strategic advice, so please bear that in mind 63 00:03:27,080 --> 00:03:29,360 Speaker 2: and always do your own research and reach out to 64 00:03:29,360 --> 00:03:32,160 Speaker 2: a financial plan and ask them for personal advice should 65 00:03:32,240 --> 00:03:33,120 Speaker 2: you wish. 66 00:03:33,400 --> 00:03:36,360 Speaker 1: All right, let's get into it. You know, actually, before 67 00:03:36,400 --> 00:03:40,040 Speaker 1: we get started on the substance of today, I'm going 68 00:03:40,120 --> 00:03:41,920 Speaker 1: to have to ask you, Peter, because we always start 69 00:03:41,920 --> 00:03:44,400 Speaker 1: with a bit of a savings hack, a savings tip, 70 00:03:45,200 --> 00:03:48,480 Speaker 1: just a little kind of tidbit of advice that might 71 00:03:48,560 --> 00:03:51,320 Speaker 1: help people save a little bit of money. And if 72 00:03:51,320 --> 00:03:53,080 Speaker 1: we ever have a special guest in the studio, we 73 00:03:53,440 --> 00:03:55,840 Speaker 1: spring it on them. Do you buy any chance have 74 00:03:55,840 --> 00:03:58,600 Speaker 1: a savings tip that you might use in your own 75 00:03:58,640 --> 00:04:00,120 Speaker 1: life to save a bit of money. 76 00:04:00,440 --> 00:04:05,320 Speaker 3: Well, I guess one is. We became members of the 77 00:04:05,480 --> 00:04:10,160 Speaker 3: Palace Cinemas, so we get cheap tickets. I'm into Frequent 78 00:04:10,200 --> 00:04:16,680 Speaker 3: Flyer Points and managed to score to business class return 79 00:04:16,880 --> 00:04:22,240 Speaker 3: flights from Morocco using Frequent Flyer points, So yeah. 80 00:04:22,040 --> 00:04:24,279 Speaker 1: The flights. We had a guest a few weeks ago, 81 00:04:24,360 --> 00:04:27,960 Speaker 1: Steve Huey from iflyflat dot com, who would be very 82 00:04:28,080 --> 00:04:30,400 Speaker 1: very proud to hear that the fact that you were 83 00:04:30,520 --> 00:04:33,520 Speaker 1: using your points so wisely to get those upgrades and 84 00:04:33,560 --> 00:04:35,760 Speaker 1: to make those trips, especially a longer trip like that 85 00:04:35,800 --> 00:04:39,120 Speaker 1: to Morocco, just a little bit more what do I say, 86 00:04:39,160 --> 00:04:42,080 Speaker 1: A little bit more comfortable, a lot comfortable. 87 00:04:43,000 --> 00:04:45,400 Speaker 2: How much did you say from those frequent fly points 88 00:04:45,400 --> 00:04:48,400 Speaker 2: there would have been like maybe thirty thousand dollars in 89 00:04:48,480 --> 00:04:50,479 Speaker 2: getting those free business class flights. 90 00:04:50,640 --> 00:04:55,080 Speaker 3: The business class flights return we paid four thousand dollars 91 00:04:55,120 --> 00:04:57,960 Speaker 3: for and two million frequent flyer points. 92 00:04:58,200 --> 00:05:00,640 Speaker 2: How much would they have cost you though, pay that 93 00:05:00,680 --> 00:05:01,520 Speaker 2: those seats at. 94 00:05:01,400 --> 00:05:04,480 Speaker 3: Right, twenty twenty thousand dollars at. 95 00:05:04,520 --> 00:05:06,440 Speaker 2: Least, I would imagine business class. 96 00:05:07,960 --> 00:05:08,480 Speaker 1: It's good. 97 00:05:08,760 --> 00:05:11,000 Speaker 2: That's a that's a good twenty thousand dollars, a good 98 00:05:11,080 --> 00:05:14,080 Speaker 2: saving hack. Just there five points they do help. 99 00:05:14,240 --> 00:05:16,120 Speaker 1: And the one that you started with as well, Peter, 100 00:05:16,240 --> 00:05:21,200 Speaker 1: about the cinema subscription. That's a really good one because 101 00:05:21,320 --> 00:05:23,320 Speaker 1: it's not just the kind of the boutique and the 102 00:05:23,360 --> 00:05:25,760 Speaker 1: independent cinemas, it's also the bigger change, Like you get 103 00:05:25,800 --> 00:05:30,039 Speaker 1: your cinebas memberships as well, which are very affordable they 104 00:05:30,080 --> 00:05:31,680 Speaker 1: might haven't been free to join up, and you can 105 00:05:31,720 --> 00:05:33,800 Speaker 1: get those discount tickets, and you can get kind of 106 00:05:33,839 --> 00:05:37,120 Speaker 1: access to early deals and things which can make going 107 00:05:37,160 --> 00:05:40,120 Speaker 1: to the movies, which especially if you if you're taking 108 00:05:40,200 --> 00:05:44,400 Speaker 1: a family, if you're taking the kids, it is so ex. 109 00:05:44,480 --> 00:05:48,919 Speaker 4: So expensive, painfully expensive, and so suddenly being able to 110 00:05:48,960 --> 00:05:53,040 Speaker 4: get even a small discount, and the discounts aren't actually small, 111 00:05:53,080 --> 00:05:55,840 Speaker 4: they can be fairly significant, it makes a really big 112 00:05:55,839 --> 00:05:58,360 Speaker 4: difference and actually makes it an affordable kind of trip. 113 00:05:58,560 --> 00:06:02,760 Speaker 3: And can I say, being a shareholder, I'm delighted we 114 00:06:02,839 --> 00:06:06,720 Speaker 3: own shares in EVT, so we get cheap tickets at 115 00:06:06,720 --> 00:06:07,680 Speaker 3: event cinemas. 116 00:06:08,360 --> 00:06:12,600 Speaker 2: Now that is a good saving. Hat I know about this? 117 00:06:12,600 --> 00:06:15,280 Speaker 1: This is Look, we're discovering all kinds of we haven't 118 00:06:15,279 --> 00:06:18,679 Speaker 1: even gotten into the subject that we want to talk about, 119 00:06:18,680 --> 00:06:21,560 Speaker 1: and we've already covered one, two, three different kind of 120 00:06:21,560 --> 00:06:22,400 Speaker 1: savings hacks. 121 00:06:23,000 --> 00:06:25,839 Speaker 2: Told you this was going to be a special episode. 122 00:06:25,440 --> 00:06:29,120 Speaker 1: And so now I'm no longer frightened. There's still this 123 00:06:29,240 --> 00:06:32,760 Speaker 1: little kind of undercurrent of fear in the studio and 124 00:06:32,800 --> 00:06:36,440 Speaker 1: it's all coming from me. Look, I think let's kind 125 00:06:36,440 --> 00:06:38,840 Speaker 1: of start with if we push the kind of fear 126 00:06:38,880 --> 00:06:41,400 Speaker 1: to one side. I think Peter Canna says that you 127 00:06:41,520 --> 00:06:45,800 Speaker 1: are her financial mentor what is your background kind of 128 00:06:46,000 --> 00:06:48,240 Speaker 1: and I mentioned the fact that your approach to investing 129 00:06:48,240 --> 00:06:51,600 Speaker 1: in to money has become almost legendary. What is your 130 00:06:51,640 --> 00:06:54,960 Speaker 1: background kind of where did you learn this and how 131 00:06:55,000 --> 00:06:56,719 Speaker 1: have you been putting it into practice? 132 00:06:57,000 --> 00:06:59,520 Speaker 3: I guess it all starts with the family at home. 133 00:06:59,640 --> 00:07:04,400 Speaker 3: That is probably the biggest influence on one's future life. 134 00:07:05,320 --> 00:07:07,560 Speaker 3: Failed my last year at high school, my dad got 135 00:07:07,560 --> 00:07:11,120 Speaker 3: me a job as a sewing machine mechanic in a 136 00:07:11,160 --> 00:07:15,440 Speaker 3: factory that embroidered sheets and pillar cases. I decided I 137 00:07:15,480 --> 00:07:18,240 Speaker 3: could cross that off my bucket list and answered an 138 00:07:18,280 --> 00:07:21,000 Speaker 3: ad and got a job as a clerk with National 139 00:07:21,080 --> 00:07:26,160 Speaker 3: Mutual in Melbourne, the insurance company. And then I met 140 00:07:26,200 --> 00:07:31,600 Speaker 3: this gorgeous lady and decided I'd better change jobs because 141 00:07:32,120 --> 00:07:34,400 Speaker 3: wasn't getting paid a great deal. So I applied for 142 00:07:34,440 --> 00:07:39,880 Speaker 3: a job with a General Motors dealership in Melbourne. They 143 00:07:39,880 --> 00:07:43,440 Speaker 3: were selling new cars. I was a clerk again, doing 144 00:07:43,480 --> 00:07:47,480 Speaker 3: the financing on the sales, but my income went from 145 00:07:48,080 --> 00:07:54,320 Speaker 3: about eleven hundred dollars to two two hundred dollars a year. WHOA. 146 00:07:54,600 --> 00:07:58,480 Speaker 3: So we saved up for an overseas holiday of eighteen months, 147 00:07:59,560 --> 00:08:02,680 Speaker 3: six months in US, six months in England, six months 148 00:08:02,720 --> 00:08:04,800 Speaker 3: in Europe and then come home. But we didn't come 149 00:08:04,840 --> 00:08:07,800 Speaker 3: home for eighteen years. Oh wow, which was the best 150 00:08:07,800 --> 00:08:11,760 Speaker 3: thing that ever happened to us. And I've encouraged all 151 00:08:11,840 --> 00:08:15,160 Speaker 3: my sons to go and live abroad for some time, 152 00:08:15,360 --> 00:08:18,880 Speaker 3: just to get out of the mindset that this country 153 00:08:18,920 --> 00:08:24,560 Speaker 3: destroys people with of this love affair with property. And 154 00:08:24,720 --> 00:08:28,640 Speaker 3: from there got to England, worked for National Mutual for 155 00:08:28,680 --> 00:08:32,080 Speaker 3: a little while as a clerk, then answered and ad 156 00:08:32,120 --> 00:08:35,760 Speaker 3: and went to work as a clerk for an investment 157 00:08:35,800 --> 00:08:39,480 Speaker 3: bank in the city of London. And that was the 158 00:08:39,600 --> 00:08:44,400 Speaker 3: last time I ever applied for a job. Every other 159 00:08:44,640 --> 00:08:46,440 Speaker 3: job came looking for me. 160 00:08:47,280 --> 00:08:50,000 Speaker 1: Oh wow, that's an amazing position to be in. 161 00:08:50,160 --> 00:08:50,319 Speaker 2: Yea. 162 00:08:50,880 --> 00:08:56,160 Speaker 3: So working for the bank got headhunted by another company, 163 00:08:56,559 --> 00:08:59,200 Speaker 3: a funds management company. They asked Frieda and I to 164 00:08:59,200 --> 00:09:03,080 Speaker 3: move to the Middland, opened an office in Birmingham and 165 00:09:03,480 --> 00:09:06,640 Speaker 3: had the Lincolnshire coast to the North Wales coast was 166 00:09:06,640 --> 00:09:11,200 Speaker 3: my sales patch. Apparently I did really well because they 167 00:09:11,240 --> 00:09:13,240 Speaker 3: asked me to come back and take over London and 168 00:09:13,320 --> 00:09:17,800 Speaker 3: the southeast of England as my sales patch. And in 169 00:09:17,840 --> 00:09:22,200 Speaker 3: the process of doing that, I got headhunted on the 170 00:09:22,200 --> 00:09:25,080 Speaker 3: way back to London by S. G. Wahburg who wanted 171 00:09:25,080 --> 00:09:28,000 Speaker 3: to bring me back to Australia because they were getting 172 00:09:28,080 --> 00:09:31,760 Speaker 3: involved with Potter Partners that stopped broking firm. So I 173 00:09:31,840 --> 00:09:35,520 Speaker 3: ended up coming back to Australia, worked there for a while, 174 00:09:36,160 --> 00:09:40,680 Speaker 3: and then a funds management company, Perpetual Trustees, asked me 175 00:09:40,720 --> 00:09:43,839 Speaker 3: to move to Sydney. I've been everywhere, man gone. 176 00:09:45,000 --> 00:09:49,080 Speaker 1: You certainly have. That is quite remarkable. And there are 177 00:09:49,120 --> 00:09:51,800 Speaker 1: a few things in there that I thought were really 178 00:09:52,160 --> 00:09:54,600 Speaker 1: quite fascinating. And there's one in particular that I wrote 179 00:09:54,600 --> 00:09:58,920 Speaker 1: down that love affair with property that you say is 180 00:10:00,080 --> 00:10:02,319 Speaker 1: kind of born into that in Australia, isn't. 181 00:10:02,120 --> 00:10:06,120 Speaker 3: It It is? I call it a genetic defect. Wow. 182 00:10:06,240 --> 00:10:09,080 Speaker 1: What why? And I know I'm jumping way ahead here 183 00:10:09,520 --> 00:10:10,960 Speaker 1: because I want to. I want to get to this. 184 00:10:11,040 --> 00:10:14,959 Speaker 1: But why what what is so wrong with? And this 185 00:10:15,000 --> 00:10:18,320 Speaker 1: is I can say, here we go. Why What is 186 00:10:18,400 --> 00:10:22,040 Speaker 1: what is so bad about the desire to own property 187 00:10:22,080 --> 00:10:22,640 Speaker 1: in Australia. 188 00:10:22,760 --> 00:10:25,079 Speaker 3: Okay, let me tell you where it comes from. As well. 189 00:10:25,559 --> 00:10:28,840 Speaker 3: The Register of Peculiar Interests for the Federal Parliament I 190 00:10:28,880 --> 00:10:32,840 Speaker 3: got hold of. They must buy law declare their financial interests, 191 00:10:33,440 --> 00:10:35,680 Speaker 3: and I discovered that the bulk of the Federal Parliament 192 00:10:35,720 --> 00:10:38,720 Speaker 3: of Australia are up to their eyeballs in negatively geared property, 193 00:10:39,520 --> 00:10:43,160 Speaker 3: very few of the moone shares. And as I say, 194 00:10:43,960 --> 00:10:46,160 Speaker 3: this is the contempt with which the leaders of this 195 00:10:46,240 --> 00:10:51,080 Speaker 3: country treat the backbone of the nation, Australian businesses. Now, 196 00:10:51,080 --> 00:10:54,280 Speaker 3: the consequences of this are that the bulk of the 197 00:10:54,320 --> 00:10:57,079 Speaker 3: productive capital of this country is locked up in worthless 198 00:10:57,120 --> 00:11:02,559 Speaker 3: residential property the Australian companies because people don't like shares 199 00:11:02,600 --> 00:11:08,480 Speaker 3: because they're risky, behp the Big Australian it's more than 200 00:11:08,520 --> 00:11:14,240 Speaker 3: seventy percent owned by overseas shareholders, rio over sixty percent 201 00:11:14,640 --> 00:11:17,199 Speaker 3: owned by overseas shareholders. How many companies do you want 202 00:11:17,200 --> 00:11:19,960 Speaker 3: me to go through? The end result of this is 203 00:11:20,000 --> 00:11:23,840 Speaker 3: that I think the figures for twenty twenty two forty 204 00:11:24,160 --> 00:11:28,000 Speaker 3: billion dollars in dividends flow out of this country in 205 00:11:28,120 --> 00:11:29,080 Speaker 3: one year. 206 00:11:29,960 --> 00:11:33,439 Speaker 1: Wow, that is hugely significant. Okay, So there's a fairly 207 00:11:33,480 --> 00:11:38,680 Speaker 1: significant mindset adjustment required, then, isn't it? Because really you 208 00:11:38,720 --> 00:11:41,520 Speaker 1: are right that that from a very young age we 209 00:11:41,600 --> 00:11:45,720 Speaker 1: are set on this on the Australian dream of owning 210 00:11:45,760 --> 00:11:50,080 Speaker 1: your own property, when maybe we should be looking elsewhere, 211 00:11:50,080 --> 00:11:51,880 Speaker 1: We should be looking at it. If we're not looking 212 00:11:51,920 --> 00:11:54,160 Speaker 1: at just essentially having a place in which to live, 213 00:11:54,920 --> 00:11:56,560 Speaker 1: and if we're actually looking at it as part of 214 00:11:56,600 --> 00:12:00,559 Speaker 1: a a wealth creation and accumulation strategy, then we should 215 00:12:00,559 --> 00:12:03,840 Speaker 1: be looking at as you describe the backbone of Australia, 216 00:12:03,880 --> 00:12:05,480 Speaker 1: which is Australian business. 217 00:12:05,640 --> 00:12:08,720 Speaker 3: Yeah, we should have somewhere to live. And if you 218 00:12:08,760 --> 00:12:14,440 Speaker 3: go to a civilized country like Denmark, Holland, Belgium, Germany, France, England, 219 00:12:15,360 --> 00:12:19,920 Speaker 3: long term residential leaseholds and I stress the word leasehold 220 00:12:20,400 --> 00:12:24,199 Speaker 3: because all you have in Australia are holiday lets twelve 221 00:12:24,280 --> 00:12:27,520 Speaker 3: months and sixty days notice to quit. My three sons 222 00:12:27,520 --> 00:12:31,760 Speaker 3: have been shuffled out of their rental time and time again, 223 00:12:32,520 --> 00:12:34,839 Speaker 3: one of them with a three month old baby, given 224 00:12:34,880 --> 00:12:39,320 Speaker 3: sixty days notice to quit. So in Europe you have 225 00:12:39,400 --> 00:12:45,200 Speaker 3: long term residential leaseholds ninety years. You live there until 226 00:12:45,200 --> 00:12:47,240 Speaker 3: you want to move, and then you can sell the 227 00:12:47,320 --> 00:12:49,560 Speaker 3: lease on, sell the lease to someone else. But you 228 00:12:49,600 --> 00:12:53,320 Speaker 3: do not buy the physical property. You don't have to. 229 00:12:53,920 --> 00:12:56,200 Speaker 1: So this is then why there is this obsession with 230 00:12:56,280 --> 00:12:59,559 Speaker 1: buying property in Australia, because the alternative just isn't. 231 00:13:00,320 --> 00:13:06,080 Speaker 3: When I'm Prime Minister, all the development companies Meriton, Stockland, Mervak, 232 00:13:06,280 --> 00:13:10,000 Speaker 3: lend Lease, et cetera. Are going to have to build 233 00:13:10,040 --> 00:13:13,920 Speaker 3: apartments and they're going to have to own those apartments 234 00:13:14,200 --> 00:13:20,720 Speaker 3: and provide long term residential leases to Australia to Australians. 235 00:13:21,720 --> 00:13:24,640 Speaker 3: And if they decide to sell the properties for a profit, 236 00:13:25,160 --> 00:13:29,720 Speaker 3: then they are going to pay a huge tax impost 237 00:13:30,000 --> 00:13:32,199 Speaker 3: that I will have initiated. 238 00:13:32,960 --> 00:13:35,320 Speaker 1: See this is where the ominous bit kind of comes in. 239 00:13:35,400 --> 00:13:37,319 Speaker 1: This is maybe this is where that threatening kind of 240 00:13:37,400 --> 00:13:40,000 Speaker 1: undercurrent cave. It wasn't from me, it's it's what you're 241 00:13:40,040 --> 00:13:43,040 Speaker 1: threatening to do when you become Prime minister. Yes, okay, 242 00:13:43,160 --> 00:13:45,400 Speaker 1: all right, So look let's move away just briefly then, 243 00:13:45,480 --> 00:13:49,400 Speaker 1: from from property and I understand them why you are 244 00:13:49,440 --> 00:13:52,560 Speaker 1: referring to it as a defect. I think you refer 245 00:13:52,640 --> 00:13:56,400 Speaker 1: to it previously. But let's move towards Australian shares because 246 00:13:56,600 --> 00:13:59,520 Speaker 1: you mentioned it before. But if we're looking today about 247 00:13:59,600 --> 00:14:03,360 Speaker 1: kind of what your wealth creation strategy is and what 248 00:14:03,480 --> 00:14:05,839 Speaker 1: has worked for you over a long period of time 249 00:14:05,880 --> 00:14:08,439 Speaker 1: and what you've been teaching others to do, where do 250 00:14:08,520 --> 00:14:12,560 Speaker 1: you start And as part of that, I suppose where 251 00:14:12,559 --> 00:14:15,760 Speaker 1: does mindset and attitude come into it when you have 252 00:14:15,840 --> 00:14:18,120 Speaker 1: someone who's just starting out and perhaps listening to this 253 00:14:18,200 --> 00:14:20,360 Speaker 1: podcast for the first time, going, I thought the only 254 00:14:20,400 --> 00:14:22,120 Speaker 1: way to make money in Australia was to buy a 255 00:14:22,120 --> 00:14:24,920 Speaker 1: residential property. And they've heard this, and they've heard your 256 00:14:24,960 --> 00:14:28,200 Speaker 1: contempt for that kind of approach coming through, going all right, 257 00:14:28,200 --> 00:14:30,560 Speaker 1: then what's the alternative? What do I do? Where do 258 00:14:30,640 --> 00:14:31,120 Speaker 1: I start? 259 00:14:31,400 --> 00:14:34,640 Speaker 3: Okay, it's very simple. Really, do what I did. I 260 00:14:34,680 --> 00:14:38,240 Speaker 3: had a paper around in the morning before school and 261 00:14:38,400 --> 00:14:43,160 Speaker 3: I then graduated on. The local chemist shop employed me 262 00:14:43,680 --> 00:14:46,440 Speaker 3: and I would cycle down to the Sigma depot to 263 00:14:46,440 --> 00:14:48,440 Speaker 3: pick up all the drugs so I would bring them back. 264 00:14:48,480 --> 00:14:51,960 Speaker 3: He would then parcel up all the prescriptions and I 265 00:14:52,000 --> 00:14:56,160 Speaker 3: would then cycle all over the suburb delivering these prescriptions. 266 00:14:56,480 --> 00:15:00,640 Speaker 3: And I got paid ten bob a week. Yes, and 267 00:15:00,720 --> 00:15:04,240 Speaker 3: I saved money. And I progressed from there slowly with 268 00:15:04,880 --> 00:15:08,600 Speaker 3: job after job after job, but I always saved money. 269 00:15:09,600 --> 00:15:13,560 Speaker 1: I'm seeing now kind of where Kanna has kind of 270 00:15:13,680 --> 00:15:16,320 Speaker 1: drawn some of the inspiration and for say the thousand 271 00:15:16,320 --> 00:15:18,840 Speaker 1: dollar projects, because it feels like this is the beginning 272 00:15:18,920 --> 00:15:23,120 Speaker 1: of that kind of attitude of earn the money, save 273 00:15:23,280 --> 00:15:26,440 Speaker 1: the money, take on extra jobs. If you can side hustles, 274 00:15:26,440 --> 00:15:28,120 Speaker 1: anything that you can to build up a little bit 275 00:15:28,160 --> 00:15:30,840 Speaker 1: of extra cash. Okay, assuming that you have now done that, 276 00:15:31,360 --> 00:15:33,520 Speaker 1: I've saved a bit, what do I do with it? 277 00:15:34,280 --> 00:15:35,280 Speaker 3: You invested? 278 00:15:36,240 --> 00:15:40,440 Speaker 1: That sounds very easy, But where do you start? How 279 00:15:40,440 --> 00:15:44,680 Speaker 1: do you? And I suppose this is probably where perhaps 280 00:15:44,800 --> 00:15:48,680 Speaker 1: my kind of block on this comes in is finding 281 00:15:48,720 --> 00:15:52,000 Speaker 1: that initial point of entry, kind of where do you begin? 282 00:15:53,040 --> 00:15:56,600 Speaker 3: Well, I my life was different, but that's like more 283 00:15:56,640 --> 00:16:01,040 Speaker 3: than fifty years ago. But now what I would suggest, 284 00:16:01,120 --> 00:16:06,200 Speaker 3: and with our three sons, what I did. I got 285 00:16:06,240 --> 00:16:10,880 Speaker 3: them into monthly savings plans, into some of the unit trusts. 286 00:16:11,200 --> 00:16:17,080 Speaker 3: Back then they all had part time jobs, and I 287 00:16:17,160 --> 00:16:18,800 Speaker 3: took some of the money off them and put it 288 00:16:18,840 --> 00:16:23,520 Speaker 3: in and got them to save. We continued that and 289 00:16:23,560 --> 00:16:28,680 Speaker 3: at Christmas and birthdays I maybe double the little contribution. 290 00:16:29,480 --> 00:16:33,560 Speaker 3: We reinvested all the dividends as well, so sort of 291 00:16:33,600 --> 00:16:39,680 Speaker 3: piling up. The eldest son continued, he started work, continued saving, 292 00:16:40,320 --> 00:16:44,800 Speaker 3: and then came along one day and said this was 293 00:16:45,160 --> 00:16:48,080 Speaker 3: the third time that he and his wife had been 294 00:16:48,640 --> 00:16:52,200 Speaker 3: flicked out of the rental property and they had a 295 00:16:52,200 --> 00:16:56,040 Speaker 3: three month old baby. He said, Dad, he said, I'm 296 00:16:56,080 --> 00:16:59,520 Speaker 3: going to buy a house. I said, Okay, no problem. 297 00:17:00,040 --> 00:17:03,120 Speaker 3: And what we did was we crystallized all that he 298 00:17:03,160 --> 00:17:08,000 Speaker 3: had saved from his teenage years as and so he 299 00:17:08,080 --> 00:17:12,679 Speaker 3: had a substantial deposit. They bought a modest house that 300 00:17:12,760 --> 00:17:17,600 Speaker 3: they could afford, and with the substantial deposit, he had 301 00:17:17,840 --> 00:17:20,760 Speaker 3: the ability to be able to draw down a line 302 00:17:20,800 --> 00:17:24,920 Speaker 3: of credit. So he brought back and this is where 303 00:17:24,920 --> 00:17:27,720 Speaker 3: we started to get serious with the investing in shares. 304 00:17:28,359 --> 00:17:32,879 Speaker 3: The dividends were used as additional capital repayments of his 305 00:17:33,080 --> 00:17:38,679 Speaker 3: home loan, on top of his mortgage repayments which he 306 00:17:38,880 --> 00:17:41,760 Speaker 3: was paying weekly. Rounded up. 307 00:17:42,400 --> 00:17:45,000 Speaker 1: I'm seeing again some tips and things that I've heard 308 00:17:45,000 --> 00:17:48,320 Speaker 1: come out of Canna's own mouth in this studio that 309 00:17:48,440 --> 00:17:51,480 Speaker 1: A is sounding very familiar to this about this idea 310 00:17:51,680 --> 00:17:56,360 Speaker 1: of kind of rounding up and making absolutely. 311 00:17:56,000 --> 00:18:00,440 Speaker 3: And with the recycling, so with the dividends going in 312 00:18:00,960 --> 00:18:04,600 Speaker 3: and his homeland going down, lift the line of credit, 313 00:18:04,800 --> 00:18:10,280 Speaker 3: buy more shares, which gave you a compounding effect doubled 314 00:18:10,880 --> 00:18:15,760 Speaker 3: because the dividends themselves were growing organically, and because you 315 00:18:15,840 --> 00:18:21,520 Speaker 3: were reinvesting the dividends, you were buying more shares which 316 00:18:21,880 --> 00:18:26,679 Speaker 3: were organically growing. There so there was a doubling of 317 00:18:26,720 --> 00:18:30,720 Speaker 3: the compounding, and you then bought more shares which paid 318 00:18:30,760 --> 00:18:35,119 Speaker 3: more dividends, which enabled you so the wipeout of your mortgages. 319 00:18:35,160 --> 00:18:41,040 Speaker 3: The dividends grew got wilder wilder, wilder wilder. So he 320 00:18:41,080 --> 00:18:43,760 Speaker 3: and his wife paid off their first home in ten years. 321 00:18:44,440 --> 00:18:49,840 Speaker 1: Ah really wow, Yes, that is amazing. 322 00:18:50,200 --> 00:18:55,040 Speaker 2: No, it is seriously inspiring. As simple it was inspiring. 323 00:18:55,400 --> 00:18:57,480 Speaker 1: It sounds simple when you say it like this, but 324 00:18:57,720 --> 00:19:00,760 Speaker 1: it is. That is quite inspiring. I think you're right. 325 00:19:01,080 --> 00:19:04,400 Speaker 3: So my son is in his forties, he now owns 326 00:19:04,440 --> 00:19:08,720 Speaker 3: his home and he borrows against that Dubais shares which 327 00:19:08,800 --> 00:19:10,919 Speaker 3: pay dividends. 328 00:19:12,320 --> 00:19:15,080 Speaker 1: Okay, I just Keta's laughing at me. 329 00:19:15,160 --> 00:19:17,800 Speaker 2: Just I've never knew this. I have known Peter for 330 00:19:17,880 --> 00:19:20,720 Speaker 2: eighteen years and I never knew this about Peter Son. 331 00:19:21,359 --> 00:19:23,679 Speaker 2: And I know so much about Peter. So this is 332 00:19:23,800 --> 00:19:29,320 Speaker 2: just so simple. And Peter has this principle. Just you know, 333 00:19:29,880 --> 00:19:33,040 Speaker 2: borrow less you can afford, spend less than you earn, 334 00:19:33,320 --> 00:19:37,200 Speaker 2: you know, invest, continue on investing, you know, use those 335 00:19:37,240 --> 00:19:41,200 Speaker 2: dividends to pay down debt or to reinvest, and keep 336 00:19:41,200 --> 00:19:43,320 Speaker 2: your eye on the prize, which is the growing passive 337 00:19:43,320 --> 00:19:47,119 Speaker 2: income streams that you don't get from residential property in 338 00:19:47,160 --> 00:19:50,720 Speaker 2: Australia like. 339 00:19:50,880 --> 00:19:51,680 Speaker 3: Loss of words? 340 00:19:52,160 --> 00:19:55,400 Speaker 1: Just okay? Is it then ever too late to implement 341 00:19:55,440 --> 00:19:56,640 Speaker 1: a strategy like this? 342 00:19:57,960 --> 00:20:01,240 Speaker 3: And the best part is that I didn't start that 343 00:20:01,400 --> 00:20:04,600 Speaker 3: until we got back to Australia, right, And at that 344 00:20:04,680 --> 00:20:06,320 Speaker 3: stage what was I was fifty one? 345 00:20:06,840 --> 00:20:07,280 Speaker 1: Okay? 346 00:20:07,920 --> 00:20:11,760 Speaker 3: And I started the boys in their teens to get 347 00:20:11,760 --> 00:20:16,439 Speaker 3: them going. So they've benefited from that, but also the discipline. 348 00:20:17,280 --> 00:20:21,760 Speaker 3: And oddly enough, my three sons all own new cars 349 00:20:21,880 --> 00:20:25,600 Speaker 3: and I drive a two thousand and five Toyota Corolla. 350 00:20:25,640 --> 00:20:29,399 Speaker 3: But they are in an ideal position in terms of 351 00:20:29,480 --> 00:20:35,399 Speaker 3: their finances and the property shares balance, et cetera. So 352 00:20:36,119 --> 00:20:37,439 Speaker 3: the three boys were ahead of me. 353 00:20:38,440 --> 00:20:40,280 Speaker 2: Sorry, did you see your new sort of investing in 354 00:20:40,320 --> 00:20:42,880 Speaker 2: your particular investment philosophy at age fifty one? 355 00:20:43,000 --> 00:20:43,560 Speaker 3: Fifty one? 356 00:20:44,240 --> 00:20:47,920 Speaker 2: I didn't know that either. That is, it gives even 357 00:20:48,080 --> 00:20:52,080 Speaker 2: more weight of the importance because can I tell Michael, 358 00:20:52,080 --> 00:20:54,520 Speaker 2: because Michael doesn't really know too much about you, because 359 00:20:54,560 --> 00:20:58,400 Speaker 2: I kind of wanted to just watch this, Michael, four 360 00:20:58,400 --> 00:21:00,520 Speaker 2: to one thousand pieces. Guess how am I much Peter's 361 00:21:00,560 --> 00:21:02,760 Speaker 2: investment portfolio is worth today? 362 00:21:03,280 --> 00:21:06,080 Speaker 1: Oh? I have no idea, and I wouldn't even know 363 00:21:06,119 --> 00:21:07,400 Speaker 1: where to start going. 364 00:21:07,720 --> 00:21:11,919 Speaker 2: Ten million dollars, he started a fifty one. So for 365 00:21:12,080 --> 00:21:15,080 Speaker 2: everyone out there thinking it's too late, I've missed the boat, 366 00:21:15,760 --> 00:21:19,240 Speaker 2: shut up and start saving and start investing. 367 00:21:19,600 --> 00:21:23,479 Speaker 3: And there's nothing miraculous about any of this. It was 368 00:21:24,000 --> 00:21:27,000 Speaker 3: I've my career. I've never been the managing director of 369 00:21:27,040 --> 00:21:31,080 Speaker 3: any companies or anything like that. I started off mainly clerical, 370 00:21:31,160 --> 00:21:34,800 Speaker 3: but then I got into sales management roles with fund 371 00:21:34,800 --> 00:21:38,280 Speaker 3: management companies in England and Australia, and I was obviously 372 00:21:38,320 --> 00:21:41,880 Speaker 3: pretty good and got paid, you know, very well, got 373 00:21:41,960 --> 00:21:47,520 Speaker 3: nice bonuses and put everything to work. You will prosper 374 00:21:47,800 --> 00:21:51,560 Speaker 3: despite your education, not as a result of it. 375 00:21:52,320 --> 00:21:56,040 Speaker 1: Wow, Okay, I you are okay? Can it? You're right, 376 00:21:56,080 --> 00:21:58,439 Speaker 1: And you've just been sitting there waiting for that opportunity 377 00:21:58,480 --> 00:22:01,280 Speaker 1: to kind of bring that up because so much in 378 00:22:01,320 --> 00:22:04,840 Speaker 1: this the fact that you didn't start this strategy until 379 00:22:05,040 --> 00:22:08,160 Speaker 1: you were fifty one, and the fact that you've had 380 00:22:08,160 --> 00:22:10,159 Speaker 1: so much success, but then that you have passed that 381 00:22:10,359 --> 00:22:14,399 Speaker 1: down to your kids, and not just to your own children, 382 00:22:14,520 --> 00:22:16,439 Speaker 1: but you passed it on to many other people as 383 00:22:16,480 --> 00:22:20,720 Speaker 1: well through your book, through Motivated Money, and you've taught 384 00:22:20,800 --> 00:22:24,080 Speaker 1: canna and Canna has passed it on without a huge 385 00:22:24,119 --> 00:22:28,040 Speaker 1: amount of success to me at this point, but this 386 00:22:28,160 --> 00:22:29,240 Speaker 1: is pretty inspiring. 387 00:22:29,760 --> 00:22:33,199 Speaker 2: I needed to get someone in front of you that 388 00:22:33,240 --> 00:22:37,040 Speaker 2: wouldn't make an impact. I have been chewing Michael's ear 389 00:22:37,080 --> 00:22:41,320 Speaker 2: off for a year and has he done anything with 390 00:22:41,480 --> 00:22:45,639 Speaker 2: what I've suggested? No, are you going to now that 391 00:22:45,640 --> 00:22:46,400 Speaker 2: you've heard from Peter? 392 00:22:47,320 --> 00:22:52,440 Speaker 1: Yes, yes i am, because again I don't know whether 393 00:22:52,480 --> 00:22:54,080 Speaker 1: this is a good thing. But the fact that you 394 00:22:54,160 --> 00:22:58,440 Speaker 1: have said that it is a ten million dollar investment 395 00:22:58,480 --> 00:23:02,280 Speaker 1: portfolio that you have bill up since you started this 396 00:23:02,359 --> 00:23:07,520 Speaker 1: strategy in your fifties, which is just which basically shows 397 00:23:07,560 --> 00:23:11,159 Speaker 1: that the well, I mean, time is still hopefully on 398 00:23:11,240 --> 00:23:13,560 Speaker 1: my side, that I've got a few years left ahead 399 00:23:13,600 --> 00:23:15,440 Speaker 1: of me that is not too late. 400 00:23:15,600 --> 00:23:18,760 Speaker 2: But that's actually not the cool part. The ten million dollars, Oh. 401 00:23:18,640 --> 00:23:19,639 Speaker 1: That sounds pretty cool to me. 402 00:23:20,080 --> 00:23:24,680 Speaker 2: No, the cool part is the complete and absolute freedom. 403 00:23:24,720 --> 00:23:27,440 Speaker 2: Sorry I'm speaking on your half. Feed up your mind. 404 00:23:27,880 --> 00:23:30,840 Speaker 2: I just get a little frustrated and passionate about this, 405 00:23:30,920 --> 00:23:35,920 Speaker 2: But it's actually the freedom, the independence, the luxury that 406 00:23:36,080 --> 00:23:40,600 Speaker 2: Peter has every single date that he opens his eyes 407 00:23:41,520 --> 00:23:44,120 Speaker 2: to spend his day as you wishes, because he has 408 00:23:44,920 --> 00:23:48,560 Speaker 2: a ten million dollar portfolio and actually is regardless irrelevant 409 00:23:48,600 --> 00:23:50,800 Speaker 2: when it's really worth that pays him over four hundred 410 00:23:50,840 --> 00:23:55,600 Speaker 2: thousand dollars a year in dividends that are tax effective, 411 00:23:56,520 --> 00:24:02,840 Speaker 2: but more importantly growing consistently every single year and maintaining 412 00:24:02,920 --> 00:24:05,959 Speaker 2: pace with the rising cost of living if you're exceeding it. 413 00:24:07,320 --> 00:24:11,920 Speaker 2: And some of those dividends obviously come with those franking credits, 414 00:24:12,240 --> 00:24:15,600 Speaker 2: which if you are retired during an allocated pension can 415 00:24:15,720 --> 00:24:20,520 Speaker 2: quite often be refunded to you in full. Sometimes. 416 00:24:21,280 --> 00:24:23,560 Speaker 1: Okay, we are running way over time with this, but 417 00:24:23,600 --> 00:24:25,240 Speaker 1: we have a lot more that we still need to cover, 418 00:24:25,359 --> 00:24:26,879 Speaker 1: and so we're going to take a very quick break, 419 00:24:26,880 --> 00:24:28,879 Speaker 1: and when we come back, I want to talk to 420 00:24:28,920 --> 00:24:33,840 Speaker 1: you about about shares in more detail, and about industrial 421 00:24:33,960 --> 00:24:36,159 Speaker 1: shares because I am doing a little bit of research. 422 00:24:36,200 --> 00:24:38,080 Speaker 1: I have noticed that there is a bit of a 423 00:24:38,119 --> 00:24:41,960 Speaker 1: bias towards that particular sector. I'd love to know why 424 00:24:42,040 --> 00:24:44,399 Speaker 1: and what it is that kind of draws you towards it. 425 00:24:44,440 --> 00:24:52,480 Speaker 1: So we'll come back in a moment. All right, Canna, 426 00:24:52,520 --> 00:24:55,600 Speaker 1: We're joined today in the studio by Peter Thornhill, who 427 00:24:55,640 --> 00:24:57,919 Speaker 1: is your own money mentor. He is the author of 428 00:24:58,080 --> 00:25:00,920 Speaker 1: motivated money, and he has taught you a lot. He's 429 00:25:00,960 --> 00:25:02,919 Speaker 1: taught a lot of people, and he's taught me a 430 00:25:02,920 --> 00:25:06,120 Speaker 1: few things already today just in the studio about your 431 00:25:06,160 --> 00:25:10,199 Speaker 1: approach to money pizza, which I'm finding fascinating. If we 432 00:25:10,280 --> 00:25:13,639 Speaker 1: can just focus a little bit on the strategy that 433 00:25:13,720 --> 00:25:16,240 Speaker 1: you use when you are buying shares and what you 434 00:25:16,280 --> 00:25:19,200 Speaker 1: are looking for. And as I mentioned before the break 435 00:25:19,240 --> 00:25:21,840 Speaker 1: that you from the research that I've done, I've seen 436 00:25:21,880 --> 00:25:25,080 Speaker 1: that you do have a bit of a focus on industrials. 437 00:25:25,800 --> 00:25:28,280 Speaker 1: What is it that draws you to them? 438 00:25:29,520 --> 00:25:33,520 Speaker 3: Digging stuff out of the ground is not very productive. 439 00:25:34,760 --> 00:25:42,080 Speaker 3: The value add comes from technological manufacturing and intellectual inputs 440 00:25:42,400 --> 00:25:45,320 Speaker 3: that convert all the stuff we dig out of the 441 00:25:45,359 --> 00:25:49,240 Speaker 3: ground or grow and convert it into a bionic ear. 442 00:25:49,800 --> 00:25:54,359 Speaker 3: The technological inputs are the value add The mere digging 443 00:25:54,400 --> 00:25:58,679 Speaker 3: of the stuff out of the ground is It's fine, 444 00:25:59,400 --> 00:26:02,080 Speaker 3: But to really to have a country relying on digging 445 00:26:02,080 --> 00:26:05,280 Speaker 3: stuff out of the ground and then exporting all that material. 446 00:26:06,560 --> 00:26:09,000 Speaker 3: What was it We were selling iron ore at one 447 00:26:09,040 --> 00:26:12,440 Speaker 3: stage for about two hundred and eighty dollars a ton. Yeah, 448 00:26:12,920 --> 00:26:14,960 Speaker 3: we used to make cars in Australia. I don't know 449 00:26:14,960 --> 00:26:18,440 Speaker 3: whether you remember, for general motors et cetera. How many 450 00:26:18,440 --> 00:26:19,720 Speaker 3: cars do we make in Australia? 451 00:26:20,320 --> 00:26:20,480 Speaker 1: Non? 452 00:26:20,720 --> 00:26:24,920 Speaker 3: No, okay. We export the iron ore to Asian countries 453 00:26:24,920 --> 00:26:28,160 Speaker 3: and overseas countries. We then re import the two hundred 454 00:26:28,160 --> 00:26:31,119 Speaker 3: and eighty thousand dollars iron ore in the form of 455 00:26:31,119 --> 00:26:34,840 Speaker 3: a motor car at twenty thousand dollars a ton clever country. 456 00:26:35,480 --> 00:26:37,600 Speaker 3: I don't think so, okay. 457 00:26:37,600 --> 00:26:39,119 Speaker 1: When you put it like that, it doesn't make a 458 00:26:39,119 --> 00:26:40,199 Speaker 1: whole lot of sense, does it. 459 00:26:41,320 --> 00:26:41,480 Speaker 2: No? 460 00:26:43,480 --> 00:26:46,479 Speaker 1: Well, okay, how then do you figure out? I understand 461 00:26:46,520 --> 00:26:49,159 Speaker 1: that the broad principle behind that when you're looking at 462 00:26:49,200 --> 00:26:53,000 Speaker 1: that sector, though, how do you decide which companies that 463 00:26:53,080 --> 00:26:55,840 Speaker 1: you actually like when you're really looking at the specifics? 464 00:26:55,840 --> 00:26:57,120 Speaker 1: How do you decide which ones to buy? 465 00:26:57,400 --> 00:27:00,880 Speaker 3: I don't. I can't because I'm not that smart. 466 00:27:01,680 --> 00:27:03,720 Speaker 1: Well, okay, I like where you're going with this because 467 00:27:04,119 --> 00:27:07,760 Speaker 1: I'm feeling an affinity in this space. How do you 468 00:27:07,760 --> 00:27:08,160 Speaker 1: do it? Then? 469 00:27:08,280 --> 00:27:11,440 Speaker 3: How do I do it? I'm a great fan as 470 00:27:11,480 --> 00:27:16,080 Speaker 3: a byproduct of my time in England of listed investment companies, 471 00:27:16,640 --> 00:27:18,240 Speaker 3: dare I do? City of London? 472 00:27:20,000 --> 00:27:20,600 Speaker 2: Absolutely? 473 00:27:21,320 --> 00:27:25,840 Speaker 3: Okay? Years in England working in the finance industry my 474 00:27:26,080 --> 00:27:30,680 Speaker 3: favorite listed investment company. The managed funds and ETFs are 475 00:27:30,880 --> 00:27:35,879 Speaker 3: trust structures. A listed investment company is a company like 476 00:27:36,040 --> 00:27:40,119 Speaker 3: Woolworth Cohle's Commonwealth Bank. The difference is that a listed 477 00:27:40,160 --> 00:27:44,919 Speaker 3: investment company the sole assets of that company are shares 478 00:27:44,960 --> 00:27:49,720 Speaker 3: in other companies, so it's a managed fund effectively, but 479 00:27:50,040 --> 00:27:52,720 Speaker 3: it's a listed company on the stock exchange instead of 480 00:27:52,720 --> 00:27:56,760 Speaker 3: a trust. And I like that structure because a trust 481 00:27:56,880 --> 00:28:00,920 Speaker 3: structure requires by law that any profits or dividends they 482 00:28:00,960 --> 00:28:06,120 Speaker 3: receive are distributed to shareholders. Otherwise there's double taxation, so 483 00:28:06,160 --> 00:28:10,720 Speaker 3: they must pay out everything they receive every year, which 484 00:28:11,119 --> 00:28:17,720 Speaker 3: creates very erratic and non tax effective. One managed fund, 485 00:28:17,760 --> 00:28:21,840 Speaker 3: I won't name the fund. My quarterly dividends coming in 486 00:28:21,920 --> 00:28:29,080 Speaker 3: were two thousand dollars eighteen hundred dollars twenty one hundred 487 00:28:29,680 --> 00:28:33,520 Speaker 3: eleven thousand dollars for a quarterly dividend. Because the fund 488 00:28:33,560 --> 00:28:37,040 Speaker 3: manager traded lots of capital gains had to pay it out. 489 00:28:38,000 --> 00:28:43,000 Speaker 3: Two years later, I get a dividend of seventeen thousand dollars. 490 00:28:44,040 --> 00:28:47,680 Speaker 3: One single dividends seventeen thousand dollars because the fund had 491 00:28:47,680 --> 00:28:49,840 Speaker 3: a lot of turnover and they had to distribute the 492 00:28:49,840 --> 00:28:52,360 Speaker 3: capital gains. That's why I'll never touch an ETF or 493 00:28:52,360 --> 00:28:55,280 Speaker 3: a managed fund. I want a listed investment company. If 494 00:28:55,320 --> 00:28:58,560 Speaker 3: the company makes a profit, they can hold that and 495 00:28:58,600 --> 00:29:01,160 Speaker 3: reinvest it on my behalf. They don't have to pay 496 00:29:01,160 --> 00:29:05,000 Speaker 3: it out. So the licks are my favorite and I 497 00:29:05,120 --> 00:29:09,080 Speaker 3: live to them to do the investing on my behalf. 498 00:29:09,480 --> 00:29:11,600 Speaker 1: Well, how do you pick which one? Because there are 499 00:29:11,600 --> 00:29:14,880 Speaker 1: a number of listed investment companies, how do you choose Whitefield? 500 00:29:15,720 --> 00:29:17,360 Speaker 3: It's one hundred percent industrials. 501 00:29:18,440 --> 00:29:20,520 Speaker 1: So I'm just silent while I'm writing this down. 502 00:29:20,880 --> 00:29:23,040 Speaker 2: I think a whole of every single listener right now 503 00:29:23,080 --> 00:29:25,560 Speaker 2: is really fumbling for a pen and paper, and. 504 00:29:27,000 --> 00:29:32,360 Speaker 3: Seeking perfection is the path to madness. So I use 505 00:29:32,520 --> 00:29:39,320 Speaker 3: other listed investment companies like Irgo, Brickworks, Soul, Patterinson's, et cetera. 506 00:29:40,200 --> 00:29:47,000 Speaker 3: Now they will probably have the major mining stocks as 507 00:29:47,080 --> 00:29:54,200 Speaker 3: part of their portfolio, but considering them plus Whitefield, if 508 00:29:54,200 --> 00:29:57,720 Speaker 3: you look at the pie chart of all the shareholdings 509 00:29:57,800 --> 00:30:01,480 Speaker 3: within the listed investment companies, the pie chart has a 510 00:30:01,480 --> 00:30:06,760 Speaker 3: little slice that's resources, and you know what, I don't 511 00:30:06,800 --> 00:30:11,960 Speaker 3: care less because the company's rio BHP pay dividends. 512 00:30:13,240 --> 00:30:15,600 Speaker 1: This is probably a good point at which to say 513 00:30:15,600 --> 00:30:17,520 Speaker 1: that you need to do some research as well. If 514 00:30:17,560 --> 00:30:20,720 Speaker 1: you are considering some of these these listed investment companies 515 00:30:20,760 --> 00:30:22,880 Speaker 1: that Peter's mentioned, that you should do some research and 516 00:30:22,880 --> 00:30:24,479 Speaker 1: make sure that it's suited for you, and get some 517 00:30:24,480 --> 00:30:28,040 Speaker 1: professional advice and just go through all of those things, 518 00:30:28,080 --> 00:30:31,920 Speaker 1: because this is for financial education purposes only, and it 519 00:30:32,000 --> 00:30:34,040 Speaker 1: is really you need to make sure that the solution 520 00:30:34,120 --> 00:30:35,360 Speaker 1: that you go for is one that. 521 00:30:35,360 --> 00:30:37,960 Speaker 2: Is right for you and you understand the risks before 522 00:30:37,960 --> 00:30:38,720 Speaker 2: you make any decision. 523 00:30:38,840 --> 00:30:41,440 Speaker 3: I just add one of the tragedies in this country 524 00:30:41,640 --> 00:30:47,560 Speaker 3: is the love affair with balanced portfolios, right, and people 525 00:30:47,560 --> 00:30:52,840 Speaker 3: are extolling the virtues because it reduces risk. They equate 526 00:30:53,400 --> 00:30:57,080 Speaker 3: volatility with risk. Volatility has nothing to do with risk. 527 00:30:57,720 --> 00:31:03,240 Speaker 3: Volatility is a function of the liquidit of shares, right, 528 00:31:03,600 --> 00:31:06,040 Speaker 3: So people have a change of mind. The mood changes, 529 00:31:06,080 --> 00:31:09,680 Speaker 3: everybody sells, the mood changes everybody buys, so the price 530 00:31:09,760 --> 00:31:14,640 Speaker 3: is going everywhere. But it's that liquidity that is not 531 00:31:15,400 --> 00:31:15,840 Speaker 3: the risk. 532 00:31:17,520 --> 00:31:19,960 Speaker 1: How do you get started? Is it just as easy 533 00:31:20,000 --> 00:31:24,400 Speaker 1: as kind of buying or investing in one listed investment 534 00:31:24,400 --> 00:31:26,760 Speaker 1: company and then just adding to it when you can 535 00:31:26,800 --> 00:31:30,400 Speaker 1: afford to invest. Yes, yes, well that's easy. That's a 536 00:31:30,440 --> 00:31:31,720 Speaker 1: lot easier than I was expecting. 537 00:31:32,280 --> 00:31:36,680 Speaker 3: The reason I like diversification and having owning more than 538 00:31:36,760 --> 00:31:43,280 Speaker 3: one is that instead of only being paid twice a year. Well, 539 00:31:43,360 --> 00:31:45,520 Speaker 3: let's go back to my experience in the UK. When 540 00:31:45,520 --> 00:31:49,160 Speaker 3: I came back to Australia, I left my superfund in England. 541 00:31:49,480 --> 00:31:53,200 Speaker 3: It has four listed investment companies in it. Every one 542 00:31:53,200 --> 00:31:57,920 Speaker 3: of them pays four dividends a year. I receive sixteen 543 00:31:58,200 --> 00:32:05,760 Speaker 3: dividend checks. I draw twelve monthly pension payments. I like 544 00:32:05,840 --> 00:32:09,000 Speaker 3: the diversity because I'm getting this constant flow of cash 545 00:32:09,000 --> 00:32:12,800 Speaker 3: coming in. If I only own one listed investment company, 546 00:32:13,400 --> 00:32:16,880 Speaker 3: my cash flow is going to be two a year. Duh. 547 00:32:17,520 --> 00:32:20,080 Speaker 1: That makes that is very very simple. That makes a 548 00:32:20,080 --> 00:32:20,880 Speaker 1: heck of a lot of sense. 549 00:32:21,320 --> 00:32:24,760 Speaker 2: Also, Peter, can you just explain to the listeners and 550 00:32:24,880 --> 00:32:29,440 Speaker 2: also to Michael, superannuation is essentially your investment portfolio as well, 551 00:32:29,520 --> 00:32:31,880 Speaker 2: So people think you're like, love to be invested. I 552 00:32:31,920 --> 00:32:36,080 Speaker 2: can't afford to. Right in our lapse right now is 553 00:32:36,120 --> 00:32:39,040 Speaker 2: the ability to start applying all this stuff through your supernation. 554 00:32:39,680 --> 00:32:44,080 Speaker 3: Yep, our super fund. I fancy my skill and working 555 00:32:44,080 --> 00:32:47,600 Speaker 3: for fund managers. They would often give me tips on stocks. 556 00:32:48,200 --> 00:32:51,520 Speaker 3: So our super fund ended up with fifty four holdings. 557 00:32:52,920 --> 00:32:56,480 Speaker 3: I have since I quit the industry because I could 558 00:32:56,560 --> 00:33:01,320 Speaker 3: no longer working in the industry, stand in front of 559 00:33:01,360 --> 00:33:06,400 Speaker 3: an audience and tell them to use a balanced portfolio 560 00:33:06,960 --> 00:33:11,760 Speaker 3: because you add cash, you add property to shares, and 561 00:33:11,840 --> 00:33:15,880 Speaker 3: no one, no one in the industry ever tells the 562 00:33:16,000 --> 00:33:20,200 Speaker 3: client that adding cash and property instead of being there, 563 00:33:20,640 --> 00:33:22,640 Speaker 3: the cash and the property drag you down to there 564 00:33:22,840 --> 00:33:25,960 Speaker 3: the opportunity cost over your lifetime. No one ever tells 565 00:33:26,000 --> 00:33:28,440 Speaker 3: you adding lead to the saddle bag. 566 00:33:29,760 --> 00:33:33,320 Speaker 1: Okay, it probably leads into a question I'm very curious 567 00:33:33,360 --> 00:33:35,400 Speaker 1: than about, because if you have been educating people for 568 00:33:35,440 --> 00:33:37,320 Speaker 1: a long time, and you've been having a lot of conversations, 569 00:33:37,320 --> 00:33:40,400 Speaker 1: and you have done this for yourself as well, what 570 00:33:40,600 --> 00:33:43,320 Speaker 1: are the biggest money mistakes that people are making in 571 00:33:43,320 --> 00:33:45,800 Speaker 1: this country? Is it the one that we started on today, 572 00:33:45,840 --> 00:33:47,880 Speaker 1: which is the obsession with property? 573 00:33:48,160 --> 00:33:53,320 Speaker 3: Well that's the primary one, but secondary is the industry 574 00:33:53,320 --> 00:33:55,600 Speaker 3: that I worked in and the reason I left it 575 00:33:55,640 --> 00:33:58,640 Speaker 3: in two thousand because in all conscience I could no 576 00:33:58,720 --> 00:34:01,080 Speaker 3: longer stand in front of an audience and tell them 577 00:34:01,120 --> 00:34:04,680 Speaker 3: to invest in a balance fund because the cost of 578 00:34:04,720 --> 00:34:09,200 Speaker 3: them over their lifetime of having cash and property in 579 00:34:09,239 --> 00:34:13,719 Speaker 3: that portfolio is going to be hundreds of thousands and 580 00:34:13,960 --> 00:34:16,120 Speaker 3: millions of dollars that they've missed out on. 581 00:34:16,719 --> 00:34:18,080 Speaker 2: The opportunity cost is hure, the. 582 00:34:18,120 --> 00:34:21,520 Speaker 3: Opportunity cost is monumental, but no one in the industry, 583 00:34:21,680 --> 00:34:25,320 Speaker 3: financial planners or fund managers ever tell the client. 584 00:34:26,320 --> 00:34:30,399 Speaker 1: Okay, so we've covered a lot in this and there's 585 00:34:30,440 --> 00:34:33,120 Speaker 1: probably this is the kind of podcast that you need 586 00:34:33,160 --> 00:34:34,600 Speaker 1: to go back and listen to a second time and 587 00:34:34,640 --> 00:34:37,000 Speaker 1: make sure that you get everything out of it. If 588 00:34:37,000 --> 00:34:40,200 Speaker 1: people want more information, what do you recommend. I'm assuming 589 00:34:40,239 --> 00:34:41,680 Speaker 1: it would be pick up a copy of your book 590 00:34:41,760 --> 00:34:42,520 Speaker 1: Motivated Money. 591 00:34:42,719 --> 00:34:48,440 Speaker 3: Well, that's hopefully a good first step, But seek financial advice. 592 00:34:48,520 --> 00:34:52,440 Speaker 3: There are some good financial planners out there. I know 593 00:34:52,760 --> 00:34:55,879 Speaker 3: of four that I love to bits. They have known 594 00:34:55,960 --> 00:34:59,080 Speaker 3: me for a very long time, and I am very 595 00:34:59,080 --> 00:35:02,520 Speaker 3: comfortable that they they have absorbed my philosophy. 596 00:35:04,000 --> 00:35:05,920 Speaker 1: I just I still find it fascinating the point that 597 00:35:05,960 --> 00:35:12,480 Speaker 1: we started that the property in Australia is almost a 598 00:35:12,520 --> 00:35:16,440 Speaker 1: disease that we are taught from a very young age 599 00:35:16,480 --> 00:35:20,120 Speaker 1: that you need to buy property and that that is 600 00:35:20,160 --> 00:35:23,680 Speaker 1: the key to wealth accumulation. Because you see a lot 601 00:35:23,680 --> 00:35:26,000 Speaker 1: of stories in the media as well about people that 602 00:35:26,040 --> 00:35:30,120 Speaker 1: have accumulated kind of I had eighteen properties by the 603 00:35:30,160 --> 00:35:33,600 Speaker 1: time I was thirty years old. What kind of damage 604 00:35:33,640 --> 00:35:34,200 Speaker 1: is that doing? 605 00:35:34,880 --> 00:35:40,000 Speaker 3: Well? Desperate? What could they have done with thirteen? Let's 606 00:35:40,000 --> 00:35:42,920 Speaker 3: say they just kept one, sold the other twelve and 607 00:35:43,000 --> 00:35:44,200 Speaker 3: invested that in shares. 608 00:35:44,520 --> 00:35:44,959 Speaker 1: Oh wow? 609 00:35:46,960 --> 00:35:50,480 Speaker 3: Does their rent go up every year every year and 610 00:35:50,840 --> 00:35:53,759 Speaker 3: it costs them nothing to own the property, doesn't it. 611 00:35:55,360 --> 00:35:57,399 Speaker 1: One thing that's just occurred to me A quick one 612 00:35:57,440 --> 00:36:02,640 Speaker 1: as well, is you mentioned volatility before. What's your advice 613 00:36:02,920 --> 00:36:05,120 Speaker 1: to people who are new to this and who are 614 00:36:05,280 --> 00:36:10,960 Speaker 1: just wary of all the talk about volatility, because it 615 00:36:11,040 --> 00:36:13,319 Speaker 1: is something that grabs a lot of headlines whenever there 616 00:36:13,360 --> 00:36:19,799 Speaker 1: are there's dips and these spikes. How the newcomers to 617 00:36:19,960 --> 00:36:22,239 Speaker 1: investing in shares hold their nerve. 618 00:36:23,080 --> 00:36:28,520 Speaker 3: Tough enough, Princess, Just get used to it and it 619 00:36:28,560 --> 00:36:34,000 Speaker 3: can work to your advantage. I've had some wonderful opportunities 620 00:36:34,520 --> 00:36:41,400 Speaker 3: because during the GFC Commonwealth Bank shares got absolutely hammered. 621 00:36:42,480 --> 00:36:46,239 Speaker 3: They were around sixty dollars and they ended up at 622 00:36:46,239 --> 00:36:49,880 Speaker 3: around twenty six dollars. And if you're telling me that 623 00:36:49,920 --> 00:36:52,879 Speaker 3: Commonwealth Bank lost more than half its business, I'd say 624 00:36:52,920 --> 00:36:57,279 Speaker 3: you're an idiot. However, people are selling because they are 625 00:36:57,400 --> 00:37:03,000 Speaker 3: nervous and ignorant. But I was absolutely delighted and Commonwealth 626 00:37:03,040 --> 00:37:06,319 Speaker 3: Bank was so kind to me because they came back 627 00:37:06,360 --> 00:37:10,880 Speaker 3: to me as an existing shareholder and said, we're issuing 628 00:37:11,120 --> 00:37:15,720 Speaker 3: new shares to existing shareholders as a share purchase plan. 629 00:37:16,120 --> 00:37:19,120 Speaker 3: You pay no brokerage, you get a small discount, and 630 00:37:19,160 --> 00:37:22,840 Speaker 3: you get to buy this parcel which is available only 631 00:37:22,880 --> 00:37:26,239 Speaker 3: to existing shareholders at twenty six dollars a share. Guess what, 632 00:37:29,800 --> 00:37:35,239 Speaker 3: And a whole raft of companies did that. Wow, West 633 00:37:35,360 --> 00:37:39,040 Speaker 3: Farmers and so on. And I've actually got the figures 634 00:37:39,480 --> 00:37:42,600 Speaker 3: those twenty six dollars shares that I bought. The dividends 635 00:37:42,640 --> 00:37:47,120 Speaker 3: on that parcel alone has paid off what I paid 636 00:37:47,160 --> 00:37:50,480 Speaker 3: for the shares three times over. I've already had three 637 00:37:50,480 --> 00:37:51,479 Speaker 3: times my money back. 638 00:37:53,000 --> 00:37:53,280 Speaker 1: Wow. 639 00:37:53,320 --> 00:37:57,520 Speaker 3: Commonwealth Bank could go broke and I could never lose money. 640 00:37:57,760 --> 00:38:00,680 Speaker 3: West Farmers exactly the same. I've got a whole raft 641 00:38:00,719 --> 00:38:01,160 Speaker 3: of these. 642 00:38:03,640 --> 00:38:05,439 Speaker 1: This is one of those episodes that even I will 643 00:38:05,440 --> 00:38:06,920 Speaker 1: have to go back and listen to a couple of 644 00:38:06,920 --> 00:38:11,520 Speaker 1: times because this has been so interesting and so inspiring 645 00:38:12,000 --> 00:38:15,000 Speaker 1: as well. And we do need to repeat that message 646 00:38:15,000 --> 00:38:18,360 Speaker 1: that This will not necessarily be suited to everybody, and 647 00:38:18,360 --> 00:38:20,720 Speaker 1: you should get professional advice and do your own research 648 00:38:20,840 --> 00:38:22,759 Speaker 1: as well. But this is a starting point, and it 649 00:38:22,840 --> 00:38:26,160 Speaker 1: is all about about education and benefiting from the experience 650 00:38:26,200 --> 00:38:28,680 Speaker 1: of somebody who's been doing it and has managed to 651 00:38:28,719 --> 00:38:35,319 Speaker 1: accumulate a very very impressive investment portfolio starting in your fifties. 652 00:38:35,800 --> 00:38:37,160 Speaker 1: I find that very inspiring. 653 00:38:38,160 --> 00:38:38,440 Speaker 3: Easy. 654 00:38:38,520 --> 00:38:42,480 Speaker 1: Really well, now you've made it sound easy. You've made 655 00:38:42,520 --> 00:38:44,160 Speaker 1: it sound a lot easier than I thought it was 656 00:38:44,200 --> 00:38:48,280 Speaker 1: coming in here today, and let's see how it goes, 657 00:38:48,640 --> 00:38:48,960 Speaker 1: can it? 658 00:38:49,080 --> 00:38:50,920 Speaker 2: I just we can have a little chat Michael and 659 00:38:50,960 --> 00:38:53,680 Speaker 2: I after we have a heart to heart about Michael 660 00:38:53,680 --> 00:38:59,759 Speaker 2: maybe applying all these very important principles and strategies and 661 00:38:59,800 --> 00:39:02,799 Speaker 2: I to he improve his own financial will being. 662 00:39:03,600 --> 00:39:06,120 Speaker 1: Peter, thank you so much for joining us in the studio. 663 00:39:06,200 --> 00:39:07,360 Speaker 1: Really appreciate your time. 664 00:39:07,360 --> 00:39:10,000 Speaker 3: My pleasure, and thank you for the opportunity. 665 00:39:09,600 --> 00:39:12,920 Speaker 1: That was Peter Thornhill, the author of Motivated Money and 666 00:39:13,200 --> 00:39:17,480 Speaker 1: Canna's Own Money mentor now Cannah. If people want to 667 00:39:17,520 --> 00:39:19,960 Speaker 1: see kind of how you have taken on board some 668 00:39:20,040 --> 00:39:22,640 Speaker 1: of Peter's wisdom over the years and want to kind 669 00:39:22,680 --> 00:39:24,960 Speaker 1: of see how you're using that where do people get 670 00:39:24,960 --> 00:39:25,480 Speaker 1: in touch with you? 671 00:39:25,760 --> 00:39:27,440 Speaker 2: Well, the best place to reach out to me is 672 00:39:27,480 --> 00:39:30,400 Speaker 2: on Instagram, match sugarm on my TV and if shoot 673 00:39:30,400 --> 00:39:31,719 Speaker 2: me through a DM and I'll come back to you 674 00:39:31,760 --> 00:39:33,200 Speaker 2: as quickly as I possibly can. 675 00:39:33,520 --> 00:39:35,720 Speaker 1: And you can hear me every day with Sean Aylmer 676 00:39:35,880 --> 00:39:39,400 Speaker 1: on Fear and Greed, Australia's best business podcast. Thank you 677 00:39:39,520 --> 00:39:41,319 Speaker 1: very much for listening to how do they Afford that? 678 00:39:41,680 --> 00:39:44,960 Speaker 1: Remember please to follow on the podcast and please leave 679 00:39:45,040 --> 00:39:48,240 Speaker 1: us a review as well. Next week we are talking 680 00:39:48,280 --> 00:39:52,360 Speaker 1: about what to do with money when a relationship ends. 681 00:39:52,440 --> 00:39:53,960 Speaker 1: It is something that a lot of people obviously have 682 00:39:54,040 --> 00:39:56,640 Speaker 1: to deal with and it can get a little bit tricky, 683 00:39:56,680 --> 00:39:58,640 Speaker 1: so we're talking about some strategies on how to deal 684 00:39:58,640 --> 00:40:00,800 Speaker 1: with that. It should be a really as in conversation. 685 00:40:00,960 --> 00:40:03,840 Speaker 1: Don't miss it.