1 00:00:10,640 --> 00:00:14,320 Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm 2 00:00:14,400 --> 00:00:18,880 Speaker 1: James Kirby, the editor at The Australian. Welcome aboard everybody. 3 00:00:19,520 --> 00:00:23,080 Speaker 1: I've had a lot of financial advisors on the show, 4 00:00:23,560 --> 00:00:27,479 Speaker 1: and I've had advisors who, although they wouldn't say this 5 00:00:27,600 --> 00:00:30,760 Speaker 1: on the show, but in reality, they're not actually going 6 00:00:30,760 --> 00:00:34,680 Speaker 1: to let anybody in the door without ten million or 7 00:00:34,720 --> 00:00:37,959 Speaker 1: more to invest. That's how they work. Several of them 8 00:00:38,000 --> 00:00:41,839 Speaker 1: you hear regularly. I've had other advisors who are in 9 00:00:41,880 --> 00:00:45,240 Speaker 1: the broader business, at the early stages, probably of their 10 00:00:45,320 --> 00:00:48,760 Speaker 1: own businesses, where they're collecting new clients, and they're happy 11 00:00:48,800 --> 00:00:53,639 Speaker 1: to get people in at very modest levels, knowing that 12 00:00:53,680 --> 00:00:56,680 Speaker 1: those same people will hopefully stay with them forever, that 13 00:00:56,760 --> 00:00:59,200 Speaker 1: their kids will stay with them forever, and they developed. 14 00:01:00,040 --> 00:01:02,319 Speaker 1: I've had all sorts of advisors, but I've never had 15 00:01:02,320 --> 00:01:05,080 Speaker 1: an advisor like I have on today, and she has 16 00:01:05,959 --> 00:01:10,000 Speaker 1: a singular story and I think it will lead us 17 00:01:10,000 --> 00:01:14,760 Speaker 1: to a very interesting episode of the show, and it 18 00:01:14,800 --> 00:01:18,120 Speaker 1: will be It actually will be a conversation, I think, 19 00:01:18,360 --> 00:01:23,759 Speaker 1: in substantially about how money. We talk about making money, 20 00:01:23,840 --> 00:01:26,959 Speaker 1: what we want to do, what it would allow us 21 00:01:27,000 --> 00:01:30,559 Speaker 1: to do, we rarely talk about what we need to do, 22 00:01:31,160 --> 00:01:34,200 Speaker 1: how it can actually defend you as an insurance if 23 00:01:34,240 --> 00:01:36,440 Speaker 1: you like, for peace of mind and something that really 24 00:01:36,520 --> 00:01:39,520 Speaker 1: really matters if there's an emergency. And she has a 25 00:01:39,560 --> 00:01:41,320 Speaker 1: story to tell, like and tell you. Her name is 26 00:01:41,400 --> 00:01:46,600 Speaker 1: Nikola Besik and she works as an advisor with FMD Advisors. 27 00:01:46,680 --> 00:01:49,360 Speaker 1: She did always work as an advisor. She started out 28 00:01:49,440 --> 00:01:54,400 Speaker 1: as a lawyer, and she also runs the pro bono 29 00:01:54,480 --> 00:01:57,240 Speaker 1: financial Advice Network, which I will also tell you about, 30 00:01:57,440 --> 00:01:59,919 Speaker 1: but first we'll say hello, how are you Nikola? 31 00:02:00,560 --> 00:02:04,560 Speaker 2: Hello, I'm well, thank you, thank you so much for 32 00:02:04,640 --> 00:02:09,320 Speaker 2: that introduction. I'm sitting here a little bit in tears 33 00:02:09,480 --> 00:02:15,680 Speaker 2: thinking about my story and how I've evolved to get 34 00:02:15,720 --> 00:02:17,800 Speaker 2: to this point in my career. 35 00:02:18,120 --> 00:02:22,480 Speaker 1: Yes, yes, look, I have no scientific evidence on this 36 00:02:22,600 --> 00:02:27,160 Speaker 1: whatsoever except to say long experience and in the six 37 00:02:27,440 --> 00:02:31,800 Speaker 1: years that we've been doing the Top Financial Advisors List, 38 00:02:31,840 --> 00:02:34,680 Speaker 1: for instance, which we do every year in conjunction with 39 00:02:34,760 --> 00:02:40,600 Speaker 1: Barons of New York, I often have found that when 40 00:02:40,680 --> 00:02:47,400 Speaker 1: you go to meet the advisors that are among the best, 41 00:02:49,320 --> 00:02:54,760 Speaker 1: they often did something quite different before they became an advisor, 42 00:02:54,840 --> 00:02:59,280 Speaker 1: that they have that wider worldview, and they did a 43 00:02:59,280 --> 00:03:02,079 Speaker 1: different discipline and so with you, you were a lawyer 44 00:03:02,120 --> 00:03:05,200 Speaker 1: first of all, So tell us how long were you 45 00:03:05,240 --> 00:03:07,440 Speaker 1: a lawyer, like, were you just a year or two 46 00:03:07,560 --> 00:03:09,000 Speaker 1: or were you well into it and what sort of 47 00:03:09,080 --> 00:03:10,960 Speaker 1: law did you do before you transferred. 48 00:03:14,160 --> 00:03:17,520 Speaker 2: I was well into it. I was close to ten years. 49 00:03:18,280 --> 00:03:24,280 Speaker 2: I specialized in intellectual property law, particularly patent law, so 50 00:03:24,639 --> 00:03:31,480 Speaker 2: I was technically a patent attorney and worked in I'm 51 00:03:31,480 --> 00:03:34,480 Speaker 2: also also a key where you worked in New Zealand 52 00:03:34,600 --> 00:03:39,400 Speaker 2: for about five years before moving over to Melbourne here 53 00:03:39,600 --> 00:03:41,920 Speaker 2: working for a reasonably large law firm. 54 00:03:41,960 --> 00:03:44,320 Speaker 1: So that was like a career progression, was it to 55 00:03:44,320 --> 00:03:47,280 Speaker 1: come to Melbourne and step up in the law and 56 00:03:47,320 --> 00:03:49,040 Speaker 1: into a larger law firm. 57 00:03:49,920 --> 00:03:54,440 Speaker 2: It was. It was particularly in New Zealand because intellectual 58 00:03:54,480 --> 00:03:58,360 Speaker 2: property law firms there are a very small number. It's 59 00:03:58,440 --> 00:04:02,680 Speaker 2: quite a specialized area. I've got a science background, so 60 00:04:03,000 --> 00:04:08,040 Speaker 2: all well, most paindent attorneys have a technical background, so 61 00:04:08,160 --> 00:04:14,480 Speaker 2: I specialized in genetics and went from sitting in a 62 00:04:14,600 --> 00:04:18,040 Speaker 2: lab going I've got to do something more with this 63 00:04:19,040 --> 00:04:25,200 Speaker 2: degree that can actually apply more world right experience, and 64 00:04:25,279 --> 00:04:29,440 Speaker 2: so I had the option of going into the intellectual 65 00:04:29,480 --> 00:04:33,320 Speaker 2: property law space and learning that specific area of law 66 00:04:33,640 --> 00:04:37,880 Speaker 2: or heading into genetic counseling. So I decided to go 67 00:04:38,040 --> 00:04:43,360 Speaker 2: down the IP law route and rarely focus on that area. 68 00:04:43,520 --> 00:04:47,600 Speaker 2: It was actually quite an interesting space with what you'd 69 00:04:47,600 --> 00:04:48,640 Speaker 2: come across. 70 00:04:48,480 --> 00:04:49,000 Speaker 3: I expect. 71 00:04:49,040 --> 00:04:52,160 Speaker 1: So I at once staj I was a technology editor, 72 00:04:52,720 --> 00:04:54,800 Speaker 1: and I was very interested in that area. But of 73 00:04:54,800 --> 00:04:57,600 Speaker 1: course I was only interested in the stuff that journalists 74 00:04:57,600 --> 00:04:59,679 Speaker 1: are interested in, you know that when it was really 75 00:04:59,720 --> 00:05:04,360 Speaker 1: really interesting on patent's technology, patents, et cetera, software patents 76 00:05:05,520 --> 00:05:08,880 Speaker 1: and the crazy things that are patented, like the Harley 77 00:05:08,960 --> 00:05:13,400 Speaker 1: Davidson sound I believe is patented for instance, which which 78 00:05:13,520 --> 00:05:16,160 Speaker 1: is which is an interesting one to some people who 79 00:05:16,200 --> 00:05:17,960 Speaker 1: don't like that sound, but let me tell you it 80 00:05:17,960 --> 00:05:22,040 Speaker 1: was patent. We are wandering here and the listener is saying, hey, James, 81 00:05:22,040 --> 00:05:25,120 Speaker 1: where are you going here? So so the reason I 82 00:05:25,160 --> 00:05:28,360 Speaker 1: want to talk to Nicola, folks is a very particular story. So, Nicola, 83 00:05:28,400 --> 00:05:31,400 Speaker 1: there you were, and you were in mid career, shall 84 00:05:31,440 --> 00:05:36,680 Speaker 1: we say, as a corporate lawyer, very very particular speciality 85 00:05:36,760 --> 00:05:39,720 Speaker 1: in patent law, which I imagine is a super hot area 86 00:05:41,720 --> 00:05:47,640 Speaker 1: and very global area in in in law and then 87 00:05:48,080 --> 00:05:50,720 Speaker 1: in your and you had no intention of being a 88 00:05:50,800 --> 00:05:53,679 Speaker 1: financial advisor. I'm sure you you were well paid, et cetera. 89 00:05:54,080 --> 00:05:59,000 Speaker 1: But then you had a first hand example of why 90 00:05:59,560 --> 00:06:04,920 Speaker 1: we need to be across our financial affairs. Just tell 91 00:06:05,000 --> 00:06:09,000 Speaker 1: us briefly what occurred, and you were your family were 92 00:06:09,000 --> 00:06:11,560 Speaker 1: back in New Zealand I'm guessing and you were in Melbourne. 93 00:06:12,080 --> 00:06:17,520 Speaker 2: That's correct. What had happened was my dad was diagnosed 94 00:06:17,600 --> 00:06:22,560 Speaker 2: with multiple sclerosis. He was fifty five at that time, 95 00:06:22,720 --> 00:06:27,560 Speaker 2: so heading towards his later career stage and very much 96 00:06:27,760 --> 00:06:32,240 Speaker 2: gearing up for what we would say retirement. We fifty 97 00:06:32,279 --> 00:06:34,400 Speaker 2: five to sixty five, A lot of people are thinking 98 00:06:34,400 --> 00:06:44,240 Speaker 2: about retirement. And his diagnosis and result of essentially losing 99 00:06:44,400 --> 00:06:47,880 Speaker 2: the use of his right side so he couldn't write, 100 00:06:48,480 --> 00:06:54,680 Speaker 2: walking was problematic. That really changed him and what he 101 00:06:54,720 --> 00:07:00,000 Speaker 2: could do work wise. So he ended up leaving his job. 102 00:07:01,240 --> 00:07:04,479 Speaker 2: But the thing with him was he could leave his 103 00:07:04,600 --> 00:07:07,960 Speaker 2: job because he had an income protection policy and place 104 00:07:08,520 --> 00:07:12,520 Speaker 2: and that pays his salary for the next ten or 105 00:07:12,520 --> 00:07:13,120 Speaker 2: so years. 106 00:07:13,440 --> 00:07:14,480 Speaker 3: Can I ask you what? 107 00:07:14,480 --> 00:07:16,520 Speaker 1: What? Can I ask you what? What was his job 108 00:07:16,600 --> 00:07:18,840 Speaker 1: or what was he self employed or was he employed? 109 00:07:19,000 --> 00:07:27,280 Speaker 2: He was a very senior executive working for Telecom, so 110 00:07:27,520 --> 00:07:30,840 Speaker 2: the equivalent of Toustra here in so I. 111 00:07:30,840 --> 00:07:34,120 Speaker 1: Would strike it would strike me if you were in Telstra, 112 00:07:35,560 --> 00:07:38,600 Speaker 1: the last thing you'd need to be in come protection insurance, 113 00:07:39,000 --> 00:07:43,120 Speaker 1: I associate. I had income protection insurance for maybe a 114 00:07:43,160 --> 00:07:46,520 Speaker 1: decade when I was in charge of a startup company, 115 00:07:46,920 --> 00:07:50,280 Speaker 1: and I did feel not so much precarious, but I 116 00:07:50,360 --> 00:07:52,640 Speaker 1: was acutely aware that it could all come tumbling down 117 00:07:52,720 --> 00:07:55,960 Speaker 1: or something that could go very wrong. But now I 118 00:07:56,400 --> 00:07:59,280 Speaker 1: in a in you know, like a global media group, 119 00:07:59,320 --> 00:08:02,400 Speaker 1: I don't have it, and I didn't have it before that. 120 00:08:03,320 --> 00:08:07,840 Speaker 1: So it strikes me that he may have been cautious. 121 00:08:09,280 --> 00:08:12,280 Speaker 1: Were your family and were you cautious anyway? Financially? 122 00:08:13,680 --> 00:08:18,760 Speaker 2: This is an interesting question because as a family, we 123 00:08:18,800 --> 00:08:24,520 Speaker 2: didn't really talk about money that much, and that's a 124 00:08:24,640 --> 00:08:29,880 Speaker 2: very common statement that people make. For me, seeing what 125 00:08:30,120 --> 00:08:35,440 Speaker 2: Dad went through, that made me start thinking about my 126 00:08:35,640 --> 00:08:39,400 Speaker 2: own situation financially. Like you said, I was in law, 127 00:08:39,880 --> 00:08:46,920 Speaker 2: earning good money, and it really changed the way I 128 00:08:46,960 --> 00:08:52,439 Speaker 2: thought about things. It changed having Dad go through what 129 00:08:52,480 --> 00:08:55,200 Speaker 2: he went through. I went, I've got to make sure 130 00:08:55,200 --> 00:08:57,080 Speaker 2: my partner and I set up I've got to make 131 00:08:57,120 --> 00:09:01,080 Speaker 2: sure that if something happens to me or term mark 132 00:09:01,360 --> 00:09:05,720 Speaker 2: that where we're covered, and. 133 00:09:05,640 --> 00:09:08,800 Speaker 3: So you had an elevated you had an elevated. 134 00:09:08,280 --> 00:09:14,079 Speaker 1: Awareness correct of the of the trauma, the financial trauma 135 00:09:14,160 --> 00:09:18,199 Speaker 1: that could occur, and you're you're just tell us a 136 00:09:18,240 --> 00:09:22,040 Speaker 1: little bit more with your dad. Income protection is notoriously 137 00:09:22,080 --> 00:09:28,240 Speaker 1: expensive and extremely narrow, it seemed to me in the 138 00:09:28,360 --> 00:09:32,920 Speaker 1: terms of of the payouts. So just would you mind 139 00:09:32,960 --> 00:09:36,120 Speaker 1: just explain to the listeners, like what what it is 140 00:09:36,200 --> 00:09:38,400 Speaker 1: and whether it was worth it in your case, and 141 00:09:38,400 --> 00:09:41,120 Speaker 1: what were the risks what might have happened to not 142 00:09:41,200 --> 00:09:42,000 Speaker 1: make it worth it. 143 00:09:42,320 --> 00:09:47,400 Speaker 2: Ah, So there is a slight difference with what dad had. 144 00:09:47,640 --> 00:09:51,000 Speaker 2: Dad had an insurance policy based in New Zealand, uh 145 00:09:51,240 --> 00:09:55,520 Speaker 2: and so it was part of his package, so to speak. 146 00:09:56,880 --> 00:10:01,760 Speaker 2: So a lot of companies have that policy in place 147 00:10:01,800 --> 00:10:04,360 Speaker 2: and they pay for those premiums and so forth. So 148 00:10:04,440 --> 00:10:08,960 Speaker 2: I think he was quite lucky because. 149 00:10:09,120 --> 00:10:13,800 Speaker 1: The company had was paying for the income protection policy. Okay, 150 00:10:13,880 --> 00:10:16,160 Speaker 1: Well that is I imagine relatively unusual. 151 00:10:16,400 --> 00:10:17,360 Speaker 3: Yes, okay, yes. 152 00:10:18,679 --> 00:10:23,760 Speaker 2: Where you think about where Australians are at the moment, 153 00:10:24,640 --> 00:10:29,920 Speaker 2: a lot of people have insurance, particularly income protection or 154 00:10:31,000 --> 00:10:34,320 Speaker 2: total and permanent disability insurance, life insurance, all attached to 155 00:10:34,360 --> 00:10:39,800 Speaker 2: their superannuation policies, and a lot of that is based 156 00:10:39,960 --> 00:10:47,040 Speaker 2: on just set normal amounts that the superfund will say 157 00:10:47,160 --> 00:10:50,280 Speaker 2: based on the income that they're getting in from the 158 00:10:50,320 --> 00:10:54,480 Speaker 2: employment and the salary contributions. So not a lot of 159 00:10:54,520 --> 00:10:59,680 Speaker 2: people realize that they actually have these insurance policies. 160 00:10:59,200 --> 00:11:02,720 Speaker 3: In place, nor do they if they're in a big fund. Correct, 161 00:11:02,880 --> 00:11:05,839 Speaker 3: if they're in a big fund, correct, not in certain mode? 162 00:11:05,920 --> 00:11:07,200 Speaker 3: Super Obviously you're on your own. 163 00:11:07,240 --> 00:11:11,760 Speaker 2: That's right, that's right. And so a lot of people 164 00:11:13,040 --> 00:11:19,160 Speaker 2: don't necessarily stop and look at superannuation to start with, 165 00:11:19,640 --> 00:11:22,720 Speaker 2: but they don't necessarily then go, Okay, what else do 166 00:11:22,800 --> 00:11:27,960 Speaker 2: I have to look at from a superannuation cover perspective? 167 00:11:28,120 --> 00:11:32,320 Speaker 2: So not not just the balance, but insurance is how 168 00:11:32,400 --> 00:11:37,160 Speaker 2: much is that insurance for? And what am I going 169 00:11:37,240 --> 00:11:41,240 Speaker 2: to get if something happens to me? And generally people 170 00:11:41,800 --> 00:11:44,520 Speaker 2: going off a little bit of a tangent here, but 171 00:11:45,520 --> 00:11:48,520 Speaker 2: a lot of people don't look at those things until 172 00:11:48,520 --> 00:11:54,440 Speaker 2: it's too late, until something happens and they go and 173 00:11:55,120 --> 00:12:00,079 Speaker 2: see someone to work out this mess. That's so the crew. 174 00:12:00,080 --> 00:12:04,920 Speaker 1: Part of this is if you're diagnosed, right, it's too late, correct, 175 00:12:05,240 --> 00:12:08,400 Speaker 1: isn't that? It? Basically if I'm diagnosed with something now 176 00:12:08,400 --> 00:12:10,760 Speaker 1: and I go back into income protection, they're going to say, 177 00:12:11,080 --> 00:12:14,920 Speaker 1: they're going to say forget it. So it's very much 178 00:12:16,360 --> 00:12:21,080 Speaker 1: you precluding something. It's very much a personal insurance and 179 00:12:21,120 --> 00:12:23,360 Speaker 1: I'm not here to sell in con protection. I'm still 180 00:12:23,400 --> 00:12:28,280 Speaker 1: skeptical about it, Nikola, because it's so expensive, it's so 181 00:12:28,280 --> 00:12:28,960 Speaker 1: so exciting. 182 00:12:29,880 --> 00:12:33,560 Speaker 2: And that's the biggest thing, isn't it is there's always 183 00:12:33,600 --> 00:12:39,600 Speaker 2: this balance between making sure that would you say, having 184 00:12:39,840 --> 00:12:42,839 Speaker 2: an insurance policy, for example, that it's there for the 185 00:12:43,480 --> 00:12:49,040 Speaker 2: right reasons and it's there for what you want it 186 00:12:49,080 --> 00:12:57,000 Speaker 2: to be for. So say, for example, someone who has 187 00:12:58,200 --> 00:13:00,720 Speaker 2: coming to the end of their career, they've built up 188 00:13:00,720 --> 00:13:03,800 Speaker 2: a really nice nestig they're only going to be working 189 00:13:04,280 --> 00:13:08,280 Speaker 2: for another year or something, then you kind of question it. 190 00:13:10,200 --> 00:13:14,800 Speaker 2: As opposed to someone who may be just starting out 191 00:13:15,320 --> 00:13:21,120 Speaker 2: and building their wealth and wanting to maximize their income. 192 00:13:22,200 --> 00:13:25,760 Speaker 2: At that stage, their biggest asset is the time that 193 00:13:25,800 --> 00:13:28,960 Speaker 2: they have to accumulate wealth, but also their ability to 194 00:13:29,000 --> 00:13:33,360 Speaker 2: earn an income. And so it is that I think 195 00:13:33,400 --> 00:13:36,320 Speaker 2: this is where the benefit of having an advisor comes 196 00:13:36,360 --> 00:13:40,600 Speaker 2: into it. Have been able to have those conversations and say, 197 00:13:41,280 --> 00:13:45,720 Speaker 2: is this actually still right for you right now based 198 00:13:45,720 --> 00:13:51,120 Speaker 2: on your situation and where you're going, and the cost 199 00:13:51,200 --> 00:13:57,959 Speaker 2: of it is ever increasing, and we've seen premiums increase 200 00:13:58,360 --> 00:14:00,320 Speaker 2: time and time again, and a lot of PEO people 201 00:14:01,080 --> 00:14:05,320 Speaker 2: do sit there and go, what is what is the 202 00:14:05,320 --> 00:14:08,640 Speaker 2: benefit that I'm going to get out of this? And 203 00:14:09,320 --> 00:14:13,360 Speaker 2: it's a reasonable question, particularly if you start thinking about 204 00:14:14,120 --> 00:14:20,240 Speaker 2: where we're at today with cost living pressures and this 205 00:14:21,280 --> 00:14:27,440 Speaker 2: knowledge that when we get to retirement that the age 206 00:14:27,480 --> 00:14:30,520 Speaker 2: pension system, for example, was probably going to be extremely 207 00:14:30,560 --> 00:14:32,560 Speaker 2: different to what it is right now. So we do 208 00:14:32,640 --> 00:14:38,440 Speaker 2: have to be more cautious about what we're what is 209 00:14:38,520 --> 00:14:41,080 Speaker 2: being paid out of our super funds in terms of 210 00:14:41,120 --> 00:14:43,880 Speaker 2: fees and charges and things like that. So it is 211 00:14:44,000 --> 00:14:45,440 Speaker 2: it is a tough. 212 00:14:45,680 --> 00:14:48,400 Speaker 1: And in terms of you becoming an advisor then from 213 00:14:48,440 --> 00:14:53,040 Speaker 1: that period in your dad's case and he had a mess, 214 00:14:53,120 --> 00:14:59,880 Speaker 1: which is is progressive obviously and you can't it can't 215 00:14:59,880 --> 00:15:06,080 Speaker 1: be cure now. But you just said, was there a 216 00:15:06,480 --> 00:15:10,720 Speaker 1: distinct link between that happening and you're becoming an advisor? 217 00:15:11,880 --> 00:15:19,840 Speaker 2: It's it was what happened was Dad was diagnosed and 218 00:15:20,080 --> 00:15:25,960 Speaker 2: I remember, I remember that conversation I had with him 219 00:15:26,160 --> 00:15:31,080 Speaker 2: around his illness as diagnosis and being able to get 220 00:15:31,080 --> 00:15:37,360 Speaker 2: this insurance pay out. And I sat there and I went, 221 00:15:37,680 --> 00:15:40,160 Speaker 2: I'm going to have to start learning about money. I 222 00:15:40,200 --> 00:15:47,520 Speaker 2: have to learn about this unknown language that effectively it 223 00:15:47,560 --> 00:15:48,800 Speaker 2: is and how it all works. 224 00:15:48,880 --> 00:15:52,040 Speaker 1: So and even that you were a very advanced professional, 225 00:15:52,080 --> 00:15:55,520 Speaker 1: but you were, and I meet this so often doctors, dentists, 226 00:15:55,560 --> 00:15:58,680 Speaker 1: lawyers are terrific at what they do, but they don't 227 00:15:58,720 --> 00:16:03,640 Speaker 1: know anything about and they're terrible investors often as well. Yes, yes, 228 00:16:03,680 --> 00:16:04,400 Speaker 1: we come across the. 229 00:16:05,520 --> 00:16:13,560 Speaker 2: Yes, definitely, definitely highly intelligent, smart people, well known in 230 00:16:13,600 --> 00:16:20,120 Speaker 2: the field, and you know, I have a really really 231 00:16:20,400 --> 00:16:23,800 Speaker 2: high level of income, but they don't understand it. And 232 00:16:24,640 --> 00:16:27,040 Speaker 2: this is the biggest thing with money is it is 233 00:16:27,680 --> 00:16:30,440 Speaker 2: It is a language. It is Once you understand it, 234 00:16:30,440 --> 00:16:35,080 Speaker 2: it becomes more and more. It's like anything when you're 235 00:16:35,120 --> 00:16:35,760 Speaker 2: learning something. 236 00:16:36,880 --> 00:16:38,920 Speaker 1: It's very interesting you said that there was a woman 237 00:16:39,760 --> 00:16:42,440 Speaker 1: at Na Carew who was on the Financial Review a 238 00:16:42,520 --> 00:16:44,760 Speaker 1: long long time ago, and she had a series of 239 00:16:44,760 --> 00:16:46,480 Speaker 1: books called The Language of Money. It was on the 240 00:16:46,520 --> 00:16:49,360 Speaker 1: early sort of person of finance books in Australia. So 241 00:16:49,440 --> 00:16:52,680 Speaker 1: just so, there was obviously a co protection insurance which 242 00:16:53,240 --> 00:16:57,360 Speaker 1: in a very fortunate fashion in your household saved the 243 00:16:57,480 --> 00:17:00,560 Speaker 1: day and even more fortunate, was actually paid for by 244 00:17:00,560 --> 00:17:02,240 Speaker 1: the employer, which. 245 00:17:02,000 --> 00:17:03,840 Speaker 3: Is rare to tell me. 246 00:17:03,880 --> 00:17:06,240 Speaker 1: In terms of more broadly, when you meet people now 247 00:17:06,280 --> 00:17:09,720 Speaker 1: as an advisor, a lot of advisors have these rules 248 00:17:09,760 --> 00:17:14,359 Speaker 1: about having cash for a rend and how much you 249 00:17:14,440 --> 00:17:18,720 Speaker 1: should have. Do you talk to people about that and 250 00:17:18,760 --> 00:17:19,440 Speaker 1: what do you say? 251 00:17:20,920 --> 00:17:25,080 Speaker 2: Yes, I do talk to people about that, and everyone's 252 00:17:27,000 --> 00:17:32,359 Speaker 2: specific situation is different in terms of the amount and 253 00:17:32,440 --> 00:17:37,399 Speaker 2: what they're doing and what they should do. So for example, 254 00:17:38,040 --> 00:17:44,040 Speaker 2: retirees who are living on their superannuation wealth that's been accumulated, 255 00:17:44,280 --> 00:17:47,320 Speaker 2: making sure that there is a set bucket of money 256 00:17:47,359 --> 00:17:50,640 Speaker 2: of cash that can be accessed if they need it. 257 00:17:52,240 --> 00:17:55,880 Speaker 2: Compared to someone who is starting out in their career 258 00:17:56,240 --> 00:18:03,200 Speaker 2: and working a lot where I was going to say, 259 00:18:03,520 --> 00:18:08,760 Speaker 2: working really hard to try and establish themselves from a koreer. 260 00:18:09,400 --> 00:18:14,200 Speaker 2: You look at purchasing a house because that's the Australian 261 00:18:14,440 --> 00:18:17,639 Speaker 2: and New Zealand dream, but then also look at raising 262 00:18:17,640 --> 00:18:21,320 Speaker 2: a family. You know, making sure that people are allocating 263 00:18:21,960 --> 00:18:26,639 Speaker 2: at least X amount towards that buffer or that emergency 264 00:18:26,640 --> 00:18:29,800 Speaker 2: account because you don't actually know when it's going to 265 00:18:29,800 --> 00:18:33,640 Speaker 2: be needed and So it's taking those two extremes and 266 00:18:33,680 --> 00:18:39,200 Speaker 2: seeing where people are at and making sure that we're 267 00:18:39,240 --> 00:18:44,720 Speaker 2: still getting that allocation to an emergency buffer because you 268 00:18:44,880 --> 00:18:47,159 Speaker 2: just don't know when something's going to happen. 269 00:18:48,040 --> 00:18:51,600 Speaker 1: Do you have a rule for the buffers for the 270 00:18:51,640 --> 00:18:54,080 Speaker 1: pre retiree and for the retiree? Some people say a 271 00:18:54,240 --> 00:18:56,600 Speaker 1: year's worth of money? Some people say three months? 272 00:18:56,720 --> 00:19:02,960 Speaker 2: Have you a ruled? I? Again, it depends. But for 273 00:19:03,000 --> 00:19:09,200 Speaker 2: the retire pre retirees, that year at least is easily achievable. 274 00:19:09,760 --> 00:19:13,119 Speaker 2: For someone that's starting out, I think it's about not 275 00:19:13,680 --> 00:19:19,240 Speaker 2: scaring them too much and working towards a relatively easy 276 00:19:19,320 --> 00:19:24,879 Speaker 2: and potentially achievable goal. So three months, for example, sitting 277 00:19:24,920 --> 00:19:25,720 Speaker 2: in cash. 278 00:19:25,560 --> 00:19:29,280 Speaker 1: Three months household expenses. So what you're thinking three months? Yeah? Yeah, 279 00:19:29,800 --> 00:19:32,160 Speaker 1: I And once you have that, if you can keep 280 00:19:32,200 --> 00:19:34,240 Speaker 1: that and what would you keep it in a cash 281 00:19:34,280 --> 00:19:35,439 Speaker 1: account or what would you keep. 282 00:19:35,280 --> 00:19:38,760 Speaker 2: It cash account? High inter're saving this account, term deposits 283 00:19:38,800 --> 00:19:43,439 Speaker 2: something well, term desposits again question mark around liquidity there, 284 00:19:43,560 --> 00:19:47,680 Speaker 2: but particularly now with the interest rates being where they're at, 285 00:19:47,880 --> 00:19:52,640 Speaker 2: you can make that money work for you. But yeah, 286 00:19:53,200 --> 00:19:56,879 Speaker 2: that that gives you access, It gives you the ability 287 00:19:57,000 --> 00:19:59,480 Speaker 2: to go that money is there. 288 00:19:59,680 --> 00:20:04,280 Speaker 1: Just in case, Yes, exactly, a rhetorical question, why would 289 00:20:04,320 --> 00:20:07,399 Speaker 1: a retireing need. Is the retireing going to get their 290 00:20:07,480 --> 00:20:11,879 Speaker 1: pension or their retirement or whatever, Why would the retireing need. 291 00:20:12,680 --> 00:20:20,400 Speaker 2: So it's say, for example, someone comes in they've got 292 00:20:20,800 --> 00:20:25,399 Speaker 2: money super invested in superannuation. It's the similar kind of 293 00:20:25,560 --> 00:20:29,400 Speaker 2: concept with having a bucket of money that could be 294 00:20:29,440 --> 00:20:34,320 Speaker 2: easily accessible if an emergency happens within their superannuation hunt 295 00:20:35,119 --> 00:20:37,960 Speaker 2: and particularly because we know at that stage of life 296 00:20:37,960 --> 00:20:47,760 Speaker 2: people are drawing on their account balances, the core capital. Yeah, 297 00:20:47,800 --> 00:20:52,600 Speaker 2: and the last thing we want people to do is 298 00:20:52,800 --> 00:20:58,000 Speaker 2: have to sell an investment before sellers of an investment 299 00:20:58,119 --> 00:21:01,680 Speaker 2: at a particular point in time if there was a. 300 00:21:01,640 --> 00:21:05,199 Speaker 1: Crash, that's what you're thinking. And there's always going to 301 00:21:05,200 --> 00:21:08,120 Speaker 1: be a crash. We don't know when the next one is, unfortunately, 302 00:21:08,160 --> 00:21:12,159 Speaker 1: but around yeah, yeah, And so what you're saying is 303 00:21:12,200 --> 00:21:17,880 Speaker 1: that the disaster is they're selling their come bank shares 304 00:21:17,960 --> 00:21:20,640 Speaker 1: and the price has halved. And it's the stupidest thing 305 00:21:20,640 --> 00:21:22,520 Speaker 1: in the world because that bank is going to come back, 306 00:21:22,800 --> 00:21:27,040 Speaker 1: roaring back to hiring it used to be in any event, 307 00:21:27,200 --> 00:21:30,320 Speaker 1: entirely hypothetical here, folks, but I hope I'm making the 308 00:21:30,359 --> 00:21:33,879 Speaker 1: point clear, right, Okay, So in terms of that, in 309 00:21:33,960 --> 00:21:37,280 Speaker 1: terms of the so I expect you are unusual in 310 00:21:37,359 --> 00:21:42,600 Speaker 1: an advisor in that many advisors their whole thing. 311 00:21:42,640 --> 00:21:44,320 Speaker 3: Is to grow wealth. 312 00:21:45,040 --> 00:21:48,720 Speaker 1: I'm sure you have that too, but also your your advice, 313 00:21:48,800 --> 00:21:53,399 Speaker 1: I expect is informed by this particular trauma with your dad, 314 00:21:53,880 --> 00:21:59,600 Speaker 1: which was where that he couldn't make the money he 315 00:21:59,680 --> 00:22:01,240 Speaker 1: was going to make and be it was going to 316 00:22:01,280 --> 00:22:03,639 Speaker 1: cost an awful his life was going to cost an 317 00:22:03,640 --> 00:22:06,479 Speaker 1: awful lot more than you thought it was going to 318 00:22:07,680 --> 00:22:11,320 Speaker 1: as the years went by. I think what we might 319 00:22:11,359 --> 00:22:17,080 Speaker 1: do actually here because you've designed something over and you 320 00:22:17,119 --> 00:22:21,080 Speaker 1: have a side hustle, except it's a positive side hustle 321 00:22:21,760 --> 00:22:25,720 Speaker 1: on like a lot of side hustles, and Nikola has 322 00:22:26,200 --> 00:22:28,680 Speaker 1: an organization I want to tell you all about. We'll 323 00:22:28,720 --> 00:22:32,280 Speaker 1: take a short break and we'll be back. Hello, Welcome 324 00:22:32,320 --> 00:22:35,600 Speaker 1: back to The Australian's Money Puzzle podcast. I'm James Kirby, 325 00:22:35,600 --> 00:22:39,359 Speaker 1: the editor at The Australian, and I'm talking to Nicola Beswick, 326 00:22:39,760 --> 00:22:44,320 Speaker 1: who is a advisor at FMD Financial Advisors, and you've 327 00:22:44,320 --> 00:22:47,479 Speaker 1: been hearing her story a particular story about how she 328 00:22:47,520 --> 00:22:49,720 Speaker 1: became an advisor. I made the point that a lot 329 00:22:49,760 --> 00:22:52,040 Speaker 1: of the advisors are very good advisors that I know, 330 00:22:53,200 --> 00:22:58,359 Speaker 1: I did something entirely different before they became advisers, and 331 00:22:58,400 --> 00:23:01,840 Speaker 1: I think it does widen their world. Now. In Nicola's case, 332 00:23:02,600 --> 00:23:06,760 Speaker 1: she has from that time and the experience with her 333 00:23:06,840 --> 00:23:09,879 Speaker 1: dad and the shock of all that, and basically the 334 00:23:10,760 --> 00:23:14,040 Speaker 1: shock which pushed her into thinking about money and ultimately 335 00:23:15,080 --> 00:23:17,840 Speaker 1: becoming a financial advisor when she was when she was 336 00:23:18,680 --> 00:23:22,840 Speaker 1: a patent lawyer. She has created an organization which is 337 00:23:22,880 --> 00:23:28,240 Speaker 1: called the Pro Bono Financial Advice Network. Now, Nicola, there 338 00:23:28,320 --> 00:23:35,000 Speaker 1: is out there the very very admirable Financial Counseling Association Counselors, 339 00:23:35,000 --> 00:23:38,679 Speaker 1: a big organization. I've had financial counselor on the show, 340 00:23:39,359 --> 00:23:43,440 Speaker 1: and they are They're very They're great, and what they 341 00:23:43,480 --> 00:23:45,600 Speaker 1: do is terrific. And I'm delighted to see they got 342 00:23:45,600 --> 00:23:50,160 Speaker 1: some more money in the budget federal budget recently so. 343 00:23:50,359 --> 00:23:54,000 Speaker 1: But their work, if I may say, is very much 344 00:23:54,040 --> 00:24:01,359 Speaker 1: focused on people who are in terrible straits financially. In 345 00:24:01,840 --> 00:24:06,639 Speaker 1: conventional fashions, they'd let the bills run up, everything went on. 346 00:24:07,119 --> 00:24:10,480 Speaker 1: Gambling is a particular problem that comes up again and 347 00:24:10,520 --> 00:24:13,760 Speaker 1: again in that area. So you've got something different, Just 348 00:24:13,800 --> 00:24:17,960 Speaker 1: tell me what you've got and what its ambitions are. 349 00:24:19,680 --> 00:24:24,119 Speaker 2: So the pro Bono Financial Advice Network is an organization 350 00:24:24,720 --> 00:24:30,639 Speaker 2: that essentially connects people with a health crisis and we 351 00:24:30,720 --> 00:24:35,240 Speaker 2: work with specific charities with advisors that are willing to 352 00:24:35,280 --> 00:24:41,000 Speaker 2: give pro bono financial advice. Now currently we work with 353 00:24:41,119 --> 00:24:47,160 Speaker 2: the Multiple Grossest Community, the MNDS mode and neuron Disease 354 00:24:47,560 --> 00:24:51,680 Speaker 2: community here in Victoria and pank here, so they specialize 355 00:24:51,800 --> 00:25:00,359 Speaker 2: in pancreatic cancer and IGI cancers and particularly climb clients 356 00:25:01,440 --> 00:25:05,000 Speaker 2: of the years that can't ordinarily afford financial advice. 357 00:25:05,680 --> 00:25:08,440 Speaker 1: Yes, right, which is four which which we know is 358 00:25:08,480 --> 00:25:11,760 Speaker 1: four thousand a year. I mean basically that's that's that's 359 00:25:11,800 --> 00:25:14,320 Speaker 1: the going rate if we'd seen per animal, that's. 360 00:25:14,200 --> 00:25:21,160 Speaker 2: Right, that's right. And what we've done is built and 361 00:25:21,200 --> 00:25:27,640 Speaker 2: continuing to build a network of advisors. And these are 362 00:25:28,440 --> 00:25:34,200 Speaker 2: accredited advisors who are employees or run their own business, 363 00:25:34,400 --> 00:25:37,720 Speaker 2: who have put their hand up to help someone once 364 00:25:37,720 --> 00:25:41,879 Speaker 2: a year who fit that criteria that we've got. Now 365 00:25:43,200 --> 00:25:45,760 Speaker 2: we know that there's a lot of more people in 366 00:25:45,800 --> 00:25:51,200 Speaker 2: Australia outside of those specific charities that need advice and 367 00:25:52,119 --> 00:25:57,160 Speaker 2: are going through a hardship, particularly because of illness and injury. 368 00:25:57,400 --> 00:26:01,960 Speaker 2: That would fit that criteria. So our plans are to 369 00:26:02,960 --> 00:26:07,639 Speaker 2: ever grow the number of people we can help. That 370 00:26:07,840 --> 00:26:11,919 Speaker 2: is also acutely linked to the number of financial advisors 371 00:26:11,960 --> 00:26:14,159 Speaker 2: that exist in Australia as well. 372 00:26:15,600 --> 00:26:19,520 Speaker 1: I mean, so there's fifteen thousand of them, shrink, shrinking, 373 00:26:20,480 --> 00:26:25,080 Speaker 1: fifteen thousands and dropping, yes, ironically not for a whole 374 00:26:25,119 --> 00:26:27,040 Speaker 1: bunch of reasons, which we would do with another time. 375 00:26:28,880 --> 00:26:34,080 Speaker 1: So the idea, the concept is that the advisor, the 376 00:26:34,160 --> 00:26:38,000 Speaker 1: qualified doesn't advisor, gives how much of their time per 377 00:26:38,080 --> 00:26:38,640 Speaker 1: year for you. 378 00:26:40,119 --> 00:26:41,920 Speaker 2: It all depends on the client case. 379 00:26:42,320 --> 00:26:44,000 Speaker 3: Yeah, I see, yes, yes, So. 380 00:26:43,920 --> 00:26:48,479 Speaker 2: It could be some clients they need a conversation for 381 00:26:48,520 --> 00:26:51,480 Speaker 2: an hour just to sit down and get a little 382 00:26:51,480 --> 00:26:58,280 Speaker 2: bit of direction. Some clients who come to us need 383 00:26:58,320 --> 00:27:01,119 Speaker 2: a lot more help than that, So an advisor of 384 00:27:01,160 --> 00:27:06,880 Speaker 2: course would set through with them and go through the 385 00:27:06,920 --> 00:27:12,040 Speaker 2: process of providing financial advice. So the outcome would be 386 00:27:12,960 --> 00:27:19,719 Speaker 2: assisting effectively that client with say insurance applications or dealing 387 00:27:19,760 --> 00:27:23,080 Speaker 2: with Center Link with things like that, depending on on 388 00:27:23,119 --> 00:27:23,600 Speaker 2: their needs. 389 00:27:24,119 --> 00:27:28,440 Speaker 1: So do you guys have to go through the whole 390 00:27:29,040 --> 00:27:32,680 Speaker 1: rigmarole of stepments of advice and all the all the formality. 391 00:27:33,880 --> 00:27:40,119 Speaker 2: Unfortunately, yes, if personal advice and again comes to that 392 00:27:40,480 --> 00:27:47,520 Speaker 2: specific requirement around legislative side of things, right, and and 393 00:27:47,560 --> 00:27:52,160 Speaker 2: we're really fortunate where a lot of advisors do provide 394 00:27:52,160 --> 00:27:55,040 Speaker 2: that service free of charge to a client that comes 395 00:27:55,040 --> 00:27:58,520 Speaker 2: through us from their nets, through the network. Uh, that's 396 00:27:58,920 --> 00:28:02,920 Speaker 2: that's life changing for people and they get that that guidance. 397 00:28:03,000 --> 00:28:09,560 Speaker 2: We've had people that didn't know that they had insurances 398 00:28:09,640 --> 00:28:17,320 Speaker 2: within their superannuation and advisors help the client get that 399 00:28:17,440 --> 00:28:23,040 Speaker 2: insurance paid out, but then also make sure that things 400 00:28:23,560 --> 00:28:25,520 Speaker 2: are structured right as well. 401 00:28:25,720 --> 00:28:29,920 Speaker 1: So okay, okay, yeah, that's well, that's a good side. 402 00:28:29,960 --> 00:28:32,760 Speaker 1: That's the upside, isn't it of the giant super funds 403 00:28:32,760 --> 00:28:35,359 Speaker 1: being so dominant now and the fact that it's compulsory 404 00:28:35,400 --> 00:28:38,280 Speaker 1: super there is a sort of de fact or compulsory 405 00:28:39,040 --> 00:28:42,480 Speaker 1: insurance built in there, invariably not comprehensive of course, but 406 00:28:42,480 --> 00:28:47,280 Speaker 1: but but but life and TPD normally to totally permanent. 407 00:28:47,080 --> 00:28:48,360 Speaker 3: Disability as they call that. 408 00:28:48,720 --> 00:28:50,640 Speaker 1: So if I said to you, I know you've got 409 00:28:50,720 --> 00:28:53,720 Speaker 1: going on this, I know you have a panel of advisors. 410 00:28:53,920 --> 00:28:56,840 Speaker 1: I know you don't have core funding. Correct, and you 411 00:28:56,920 --> 00:28:58,960 Speaker 1: don't have government funding. If I said to you, what's 412 00:28:58,960 --> 00:29:01,600 Speaker 1: the best thing that could possibly happened to the foundation, 413 00:29:01,800 --> 00:29:03,760 Speaker 1: what would it be to. 414 00:29:03,720 --> 00:29:10,680 Speaker 2: Get money to be able to funds a panel of 415 00:29:10,760 --> 00:29:14,480 Speaker 2: advisors full time, to be able to look after these clients. 416 00:29:16,680 --> 00:29:19,120 Speaker 3: Oh, I see, to actually have your own advisors on 417 00:29:19,160 --> 00:29:23,200 Speaker 3: the books. Is that your ultimate ambition? Aha? Yes, I see, 418 00:29:23,360 --> 00:29:24,440 Speaker 3: very very good. Okay. 419 00:29:24,960 --> 00:29:28,840 Speaker 1: And also just on the broader issue that has become 420 00:29:28,920 --> 00:29:31,000 Speaker 1: the theme of the show because of the nature of 421 00:29:31,040 --> 00:29:35,480 Speaker 1: your particular story for someone who is thinking, most people 422 00:29:35,520 --> 00:29:40,280 Speaker 1: have got things rolling, they've got investments, they might have mortgages, 423 00:29:40,920 --> 00:29:45,160 Speaker 1: they do their best on building that. They might also 424 00:29:45,240 --> 00:29:47,920 Speaker 1: give some money to charity once a year around. Now, folks, 425 00:29:47,920 --> 00:29:50,320 Speaker 1: you've got a few weeks left. It's tax deductible. You 426 00:29:50,360 --> 00:29:56,600 Speaker 1: should do it. But in terms of protecting themselves, we'll 427 00:29:56,640 --> 00:29:59,280 Speaker 1: put into we'll put in comprotection insurance on the table, 428 00:29:59,320 --> 00:30:02,200 Speaker 1: and we'll say, so many people will will do that, 429 00:30:02,320 --> 00:30:05,120 Speaker 1: and so many won't, And a lot of people will 430 00:30:05,160 --> 00:30:07,640 Speaker 1: look at and go, oh boy, that's just what I'm 431 00:30:07,640 --> 00:30:10,440 Speaker 1: not going to pay, and they have to make their 432 00:30:10,480 --> 00:30:13,840 Speaker 1: own minds. But apart from income protection insurance, what are 433 00:30:13,840 --> 00:30:17,400 Speaker 1: the other core conclusions you would like to give to 434 00:30:17,480 --> 00:30:21,840 Speaker 1: our listeners about that idea of having the emergency fond 435 00:30:21,920 --> 00:30:22,959 Speaker 1: that everyone should have them. 436 00:30:24,080 --> 00:30:28,280 Speaker 2: I know it's really really boring, but saving that cash 437 00:30:28,360 --> 00:30:32,760 Speaker 2: for a particular point in time can be life changing. 438 00:30:33,800 --> 00:30:38,680 Speaker 2: We we're talking about illness here, and if you think 439 00:30:38,720 --> 00:30:42,760 Speaker 2: about the expenses that go with even trying to get 440 00:30:42,800 --> 00:30:46,280 Speaker 2: to the bottom of being diagnosed, that can be quite 441 00:30:46,400 --> 00:30:48,200 Speaker 2: quickly accrude. 442 00:30:49,440 --> 00:30:54,320 Speaker 1: So Mriyes, yeah, that's that's that's that's terrible istic because 443 00:30:54,360 --> 00:30:57,320 Speaker 1: once you are ironically, once you are diagnosed and you 444 00:30:57,360 --> 00:30:59,480 Speaker 1: know what you have, and then you can work on 445 00:30:59,560 --> 00:31:01,960 Speaker 1: it and presume financially you can work on this. But 446 00:31:02,040 --> 00:31:04,200 Speaker 1: it's a terrible period where you don't know what you've 447 00:31:04,200 --> 00:31:10,520 Speaker 1: got and you're getting very expensive, what are theoretically optional 448 00:31:12,560 --> 00:31:16,120 Speaker 1: examinations from a different specialists. That's when I imagine you're really. 449 00:31:16,160 --> 00:31:20,280 Speaker 2: Correct, and I think those are the things that we 450 00:31:20,400 --> 00:31:24,880 Speaker 2: forget about. But then it's the everyday things like if 451 00:31:24,920 --> 00:31:28,080 Speaker 2: you're a homeowner and your hot water cylinder bursts. You know, 452 00:31:28,240 --> 00:31:32,160 Speaker 2: just being able to access money for that is you know, 453 00:31:32,320 --> 00:31:36,040 Speaker 2: it means you don't have to question it and getting it, 454 00:31:36,200 --> 00:31:40,960 Speaker 2: getting someone in but then also building on that next 455 00:31:41,040 --> 00:31:46,040 Speaker 2: level of if we're going to protect ourselves being across 456 00:31:47,280 --> 00:31:51,560 Speaker 2: where our money is, what what it is doing, and 457 00:31:51,920 --> 00:31:54,640 Speaker 2: do you have the right checks and balances in place. 458 00:31:55,400 --> 00:31:58,760 Speaker 2: That's the biggest the next part of the whole conversation 459 00:31:59,280 --> 00:32:01,560 Speaker 2: around people protecting themselves. 460 00:32:01,840 --> 00:32:02,640 Speaker 3: Okay, terrific. 461 00:32:02,720 --> 00:32:05,320 Speaker 1: And also I think even from the most pragmatic investor 462 00:32:05,320 --> 00:32:07,880 Speaker 1: point of view, you don't ever want to be selling. 463 00:32:08,040 --> 00:32:11,480 Speaker 1: You don't want to be a forced seller, as Nikola 464 00:32:11,560 --> 00:32:12,040 Speaker 1: pointed out. 465 00:32:12,120 --> 00:32:13,440 Speaker 3: And it might just be shares either. 466 00:32:13,480 --> 00:32:15,680 Speaker 1: I mean, you might have put everything into an investment 467 00:32:15,680 --> 00:32:17,560 Speaker 1: property and you might have built that over the years 468 00:32:17,560 --> 00:32:20,160 Speaker 1: and years, and then things go wrong and for no 469 00:32:20,280 --> 00:32:23,240 Speaker 1: other reason that you couldn't pay the mortgage for three months. 470 00:32:23,680 --> 00:32:26,520 Speaker 1: You've got to say that and someone basically basically someone's 471 00:32:26,560 --> 00:32:29,680 Speaker 1: going to win and you're going to lose on that. Okay, 472 00:32:29,720 --> 00:32:31,760 Speaker 1: we'll take short break, we'll be back with some questions. 473 00:32:34,080 --> 00:32:38,800 Speaker 1: Hello and welcome to the Australians Money Puzzle podcast. James 474 00:32:38,880 --> 00:32:41,680 Speaker 1: Kirby here, and I'm talking to Nicola Beswick from f 475 00:32:42,080 --> 00:32:46,160 Speaker 1: m D Financial Advisors. Nicola, apart from apart from being 476 00:32:46,200 --> 00:32:49,560 Speaker 1: a patent lawyer, apart from being a financial advisor apart 477 00:32:49,600 --> 00:32:53,320 Speaker 1: from running the pro bono financial advice network, is of 478 00:32:53,360 --> 00:32:56,880 Speaker 1: course qualified advisor, so she can answer the questions that 479 00:32:56,920 --> 00:32:59,080 Speaker 1: come in and I have just collated? 480 00:32:59,280 --> 00:32:59,880 Speaker 3: Is that the word? 481 00:33:00,440 --> 00:33:07,440 Speaker 1: A few choice questions for her? Okay, Scott, sorry, not Scott. Sorry, folks, 482 00:33:07,880 --> 00:33:11,800 Speaker 1: we read Scott out last week. Brad, thank you for 483 00:33:12,040 --> 00:33:13,640 Speaker 1: concise market commentary. 484 00:33:13,680 --> 00:33:14,480 Speaker 3: You're welcome. Brad. 485 00:33:14,760 --> 00:33:17,560 Speaker 1: I plan to hold some shares and sell after the 486 00:33:17,760 --> 00:33:23,040 Speaker 1: thirtieth of June in order to realize capital gains in 487 00:33:23,120 --> 00:33:25,880 Speaker 1: twenty twenty four twenty five at a lower tax rate 488 00:33:26,000 --> 00:33:28,200 Speaker 1: because of the Stage three tax cuts. Do you believe 489 00:33:28,240 --> 00:33:29,840 Speaker 1: others will do the same and will there be any 490 00:33:29,840 --> 00:33:33,800 Speaker 1: significant impact on markets in the next year as a 491 00:33:33,840 --> 00:33:35,600 Speaker 1: result of Stage three tax cuts? 492 00:33:37,600 --> 00:33:38,160 Speaker 3: Big question? 493 00:33:38,320 --> 00:33:40,480 Speaker 1: Why don't we just put the macropart on one side 494 00:33:40,960 --> 00:33:43,800 Speaker 1: on what Stage three tax cuts will do. Maybe they'll 495 00:33:43,840 --> 00:33:46,920 Speaker 1: be inflationary, maybe they won't. Of course they'll be inflationary, 496 00:33:46,960 --> 00:33:49,960 Speaker 1: but they'll be offset by other things perhaps. But what 497 00:33:50,040 --> 00:33:52,360 Speaker 1: have you been telling clients about Stage three and what 498 00:33:52,400 --> 00:33:55,239 Speaker 1: to do that everyone's getting a tax cut basically at 499 00:33:55,240 --> 00:33:55,760 Speaker 1: every level. 500 00:33:55,840 --> 00:33:59,600 Speaker 2: That's right, but it all depends on what the motivation 501 00:33:59,760 --> 00:34:05,160 Speaker 2: is behind the reason why you're selling something is and 502 00:34:05,320 --> 00:34:10,440 Speaker 2: your specific situation. I think that is the most important 503 00:34:10,480 --> 00:34:14,880 Speaker 2: piece of the puzzle, particularly if you're selling something to 504 00:34:15,040 --> 00:34:27,799 Speaker 2: realize again, it's taking your specific reasons and going yes, 505 00:34:28,239 --> 00:34:31,440 Speaker 2: this is a good time to do it. Yes, basically 506 00:34:31,840 --> 00:34:37,400 Speaker 2: the tax implications will be better next financial year. But 507 00:34:38,040 --> 00:34:40,879 Speaker 2: what we've also got to do is look at why 508 00:34:40,880 --> 00:34:45,520 Speaker 2: are you selling, what's the motivation behind that, and are 509 00:34:45,560 --> 00:34:49,720 Speaker 2: there any other things that you can do to minimize 510 00:34:50,360 --> 00:34:56,440 Speaker 2: the capital gains tax that you'll incur. Those things are 511 00:34:56,480 --> 00:35:00,920 Speaker 2: really really important when making a decision to to sell 512 00:35:00,960 --> 00:35:05,200 Speaker 2: something in there in someone's personal name. One of the 513 00:35:06,000 --> 00:35:09,200 Speaker 2: things that is really quite useful at the moment that 514 00:35:09,239 --> 00:35:13,600 Speaker 2: the government brought in quite a number of years ago 515 00:35:13,760 --> 00:35:19,600 Speaker 2: now was the catch up concessional contributions. That has been 516 00:35:19,960 --> 00:35:23,440 Speaker 2: really really beneficial for a lot of people wanting to 517 00:35:24,200 --> 00:35:28,560 Speaker 2: liquidate an asset like an investment property for example, minimize 518 00:35:28,560 --> 00:35:31,360 Speaker 2: the gains the money I. 519 00:35:31,400 --> 00:35:34,720 Speaker 1: Get the money into super on a tax concessional basis, 520 00:35:34,719 --> 00:35:39,000 Speaker 1: because they can do five years under most circumstances, you 521 00:35:39,520 --> 00:35:42,520 Speaker 1: can you can add five years together and put it 522 00:35:42,520 --> 00:35:45,239 Speaker 1: all in in one hit. Yeah, Okay, that's a good point. 523 00:35:45,360 --> 00:35:46,239 Speaker 1: We'll keep that in mind. 524 00:35:46,280 --> 00:35:46,680 Speaker 3: Folks. 525 00:35:46,840 --> 00:35:50,239 Speaker 1: Remember this is not advice. This is always information on 526 00:35:50,280 --> 00:35:52,840 Speaker 1: the show. It is not advice. One other thing I 527 00:35:52,840 --> 00:35:55,120 Speaker 1: suppose on the tax cuts is what people I'm really 528 00:35:55,120 --> 00:35:59,080 Speaker 1: saying is my tax, my tax right off will definit 529 00:35:59,160 --> 00:36:02,400 Speaker 1: by definition, be bigger this year than next year because 530 00:36:02,680 --> 00:36:04,680 Speaker 1: next year I'll be paying that's tax. Isn't that really 531 00:36:04,680 --> 00:36:06,799 Speaker 1: how it works? But I would think nicola really for 532 00:36:06,840 --> 00:36:09,360 Speaker 1: a lot of people on salaries, especially at the operand 533 00:36:09,480 --> 00:36:16,000 Speaker 1: especially the tax cut is pretty teeny. It's important in 534 00:36:16,080 --> 00:36:18,759 Speaker 1: middle income, but over one hundred and is it over 535 00:36:18,760 --> 00:36:22,279 Speaker 1: one hundred and ninety? I think they'reabouts you're talking. You 536 00:36:22,920 --> 00:36:25,560 Speaker 1: get a couple of grand more a year post tax, 537 00:36:25,640 --> 00:36:28,000 Speaker 1: and that's great, look at you three or four grand, 538 00:36:28,040 --> 00:36:31,960 Speaker 1: but it's not exactly worth to be constituting your investment. 539 00:36:33,360 --> 00:36:35,239 Speaker 3: Is that the posture makes exactly it? 540 00:36:35,520 --> 00:36:39,440 Speaker 2: I think that's that's the very specific that's the exact 541 00:36:39,520 --> 00:36:43,040 Speaker 2: point is have a have a broader look at why 542 00:36:43,080 --> 00:36:45,640 Speaker 2: you're doing this first, and. 543 00:36:45,560 --> 00:36:49,719 Speaker 1: Then yeah, correct, bigger, bigger picture. Don't get don't get 544 00:36:49,719 --> 00:36:53,360 Speaker 1: two micro folks, all right, David. David says, this is 545 00:36:53,360 --> 00:36:55,080 Speaker 1: one of these We get a lot of these questions. 546 00:36:55,080 --> 00:36:58,239 Speaker 1: They are They are what I call creative questions. Why 547 00:36:58,280 --> 00:37:03,200 Speaker 1: not limit the home exemption counted towards eligibility for age 548 00:37:03,239 --> 00:37:07,799 Speaker 1: persons to the average value of the Australian home. It 549 00:37:07,880 --> 00:37:11,200 Speaker 1: seems grossly unfair that other taxpayers are currently funding the 550 00:37:11,239 --> 00:37:13,480 Speaker 1: retirement of some very asset rich people. 551 00:37:13,600 --> 00:37:15,759 Speaker 3: David. I have no problem with your. 552 00:37:17,280 --> 00:37:20,160 Speaker 1: Statement that it's grossly unfair that you can have a 553 00:37:20,200 --> 00:37:23,120 Speaker 1: ten million dollar house on Sydney Harbor and get the pictures, 554 00:37:23,440 --> 00:37:29,040 Speaker 1: because you can. But how you would do it more precisely, 555 00:37:30,960 --> 00:37:33,960 Speaker 1: I don't know. But certainly it's as good an idea 556 00:37:34,400 --> 00:37:37,959 Speaker 1: as any other. The average value of the Australian home. 557 00:37:39,680 --> 00:37:41,879 Speaker 1: People would say, oh, hang on a second, that gives 558 00:37:41,880 --> 00:37:46,400 Speaker 1: a huge advantage to the people. You know, obviously some 559 00:37:46,440 --> 00:37:47,520 Speaker 1: houses are way low. 560 00:37:47,400 --> 00:37:48,920 Speaker 3: Average and some are way above average. 561 00:37:48,960 --> 00:37:51,920 Speaker 1: But it's an idea we're taking on board, and thank 562 00:37:51,920 --> 00:37:54,160 Speaker 1: you very much for sending it in. But you was 563 00:37:54,160 --> 00:37:56,280 Speaker 1: there something you were going to say there, Nikola. 564 00:37:56,520 --> 00:37:58,960 Speaker 2: I think the one thing that a lot of people 565 00:37:59,040 --> 00:38:01,520 Speaker 2: miss when we talk about people her on the age 566 00:38:01,560 --> 00:38:06,320 Speaker 2: pension is the level of income and assets that people 567 00:38:06,360 --> 00:38:08,120 Speaker 2: have to have to be able to get the full 568 00:38:08,160 --> 00:38:17,400 Speaker 2: age pension. That is something that there is this cohort 569 00:38:17,560 --> 00:38:21,960 Speaker 2: out there that are precisely fit into that camp in 570 00:38:22,080 --> 00:38:26,480 Speaker 2: terms of having a home in Sydney Harbor and not 571 00:38:26,520 --> 00:38:30,960 Speaker 2: having anything else. But the majority of people that are 572 00:38:31,000 --> 00:38:34,359 Speaker 2: on the full age pension don't really have a lot, 573 00:38:36,000 --> 00:38:39,640 Speaker 2: and sometimes the only thing that they do have is 574 00:38:39,680 --> 00:38:42,960 Speaker 2: their home. So to be able to count that as 575 00:38:43,080 --> 00:38:49,880 Speaker 2: could detrimentally impact those people. So bringing it in could 576 00:38:49,880 --> 00:38:53,400 Speaker 2: be quite a challenge for any government. 577 00:38:55,120 --> 00:38:58,080 Speaker 1: Yeah, okay, but I suppose at the heart of this 578 00:38:58,320 --> 00:39:01,279 Speaker 1: is the issue that the home, the family home, is 579 00:39:01,400 --> 00:39:09,480 Speaker 1: a de facto exempt from pension access estimations, and that 580 00:39:09,520 --> 00:39:12,960 Speaker 1: creates all sorts of problems, all sorts of problems. One 581 00:39:12,960 --> 00:39:16,040 Speaker 1: of the big problems is about the whole thing about 582 00:39:16,080 --> 00:39:19,920 Speaker 1: using your super for buying a family home. Well, well, 583 00:39:20,440 --> 00:39:25,080 Speaker 1: unfortunately the person with the home wins. The person who 584 00:39:25,080 --> 00:39:29,040 Speaker 1: wants her home wins for all ages in our tax system. Okay, Hey, 585 00:39:29,120 --> 00:39:31,719 Speaker 1: final question, which isn't really a question that you're not 586 00:39:31,840 --> 00:39:34,320 Speaker 1: going to be able to answer, Nikola, but from Jesse 587 00:39:34,719 --> 00:39:37,480 Speaker 1: j E. Sse she says, I'm looking for a trusted 588 00:39:37,520 --> 00:39:41,040 Speaker 1: financial advisor. I'm a regular wristler. Are you able to 589 00:39:41,080 --> 00:39:44,520 Speaker 1: share a list of advisors you've had on the show. No, 590 00:39:44,800 --> 00:39:48,799 Speaker 1: I'm not Jesse. However, however I will say this. Look 591 00:39:49,280 --> 00:39:52,000 Speaker 1: two things. We have a list published in The Australian's 592 00:39:52,000 --> 00:39:56,960 Speaker 1: Top hundred Financial Advisors list that's there every year. And separately, 593 00:39:57,360 --> 00:40:00,640 Speaker 1: anyone who is an advisor who's been on this show, 594 00:40:00,880 --> 00:40:06,360 Speaker 1: well obviously by definition I endorse them. And all you 595 00:40:06,400 --> 00:40:08,480 Speaker 1: have to do is go back through your app and 596 00:40:08,520 --> 00:40:10,320 Speaker 1: have a look at all the names that were advisors 597 00:40:10,360 --> 00:40:13,600 Speaker 1: on the show, and there are dozens and dozens of them. 598 00:40:14,080 --> 00:40:17,080 Speaker 1: Hopefully that's useful to you. Okay, very good, Hey, thank 599 00:40:17,080 --> 00:40:22,120 Speaker 1: you very much, Nicole. Really interesting, interesting story, and best 600 00:40:22,120 --> 00:40:24,759 Speaker 1: of luck with your practice and particularly best of Look. 601 00:40:24,840 --> 00:40:27,720 Speaker 1: I love the idea the pro bono financial advice network. 602 00:40:27,760 --> 00:40:30,680 Speaker 1: I think it's really good and I hope someone's listening 603 00:40:30,680 --> 00:40:33,920 Speaker 1: out there that you'll get some volunteers hopefully, but also 604 00:40:34,080 --> 00:40:39,160 Speaker 1: someone with the deep pockets perhaps might come and knock 605 00:40:39,200 --> 00:40:44,279 Speaker 1: on your door. Okay, thank you. Okay, folks, keep the 606 00:40:44,600 --> 00:40:47,920 Speaker 1: questions rolling, and the statements and the observations and the complaints. 607 00:40:48,640 --> 00:40:53,880 Speaker 1: They're all equally welcome. The Money Puzzle at the Australian 608 00:40:53,960 --> 00:40:56,200 Speaker 1: dot com dot Au talk to you soon.