Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm
Speaker 1: James Kirby, the editor at The Australian. Welcome aboard everybody.
Speaker 1: I've had a lot of financial advisors on the show,
Speaker 1: and I've had advisors who, although they wouldn't say this
Speaker 1: on the show, but in reality, they're not actually going
Speaker 1: to let anybody in the door without ten million or
Speaker 1: more to invest. That's how they work. Several of them
Speaker 1: you hear regularly. I've had other advisors who are in
Speaker 1: the broader business, at the early stages, probably of their
Speaker 1: own businesses, where they're collecting new clients, and they're happy
Speaker 1: to get people in at very modest levels, knowing that
Speaker 1: those same people will hopefully stay with them forever, that
Speaker 1: their kids will stay with them forever, and they developed.
Speaker 1: I've had all sorts of advisors, but I've never had
Speaker 1: an advisor like I have on today, and she has
Speaker 1: a singular story and I think it will lead us
Speaker 1: to a very interesting episode of the show, and it
Speaker 1: will be It actually will be a conversation, I think,
Speaker 1: in substantially about how money. We talk about making money,
Speaker 1: what we want to do, what it would allow us
Speaker 1: to do, we rarely talk about what we need to do,
Speaker 1: how it can actually defend you as an insurance if
Speaker 1: you like, for peace of mind and something that really
Speaker 1: really matters if there's an emergency. And she has a
Speaker 1: story to tell, like and tell you. Her name is
Speaker 1: Nikola Besik and she works as an advisor with FMD Advisors.
Speaker 1: She did always work as an advisor. She started out
Speaker 1: as a lawyer, and she also runs the pro bono
Speaker 1: financial Advice Network, which I will also tell you about,
Speaker 1: but first we'll say hello, how are you Nikola?
Speaker 2: Hello, I'm well, thank you, thank you so much for
Speaker 2: that introduction. I'm sitting here a little bit in tears
Speaker 2: thinking about my story and how I've evolved to get
Speaker 2: to this point in my career.
Speaker 1: Yes, yes, look, I have no scientific evidence on this
Speaker 1: whatsoever except to say long experience and in the six
Speaker 1: years that we've been doing the Top Financial Advisors List,
Speaker 1: for instance, which we do every year in conjunction with
Speaker 1: Barons of New York, I often have found that when
Speaker 1: you go to meet the advisors that are among the best,
Speaker 1: they often did something quite different before they became an advisor,
Speaker 1: that they have that wider worldview, and they did a
Speaker 1: different discipline and so with you, you were a lawyer
Speaker 1: first of all, So tell us how long were you
Speaker 1: a lawyer, like, were you just a year or two
Speaker 1: or were you well into it and what sort of
Speaker 1: law did you do before you transferred.
Speaker 2: I was well into it. I was close to ten years.
Speaker 2: I specialized in intellectual property law, particularly patent law, so
Speaker 2: I was technically a patent attorney and worked in I'm
Speaker 2: also also a key where you worked in New Zealand
Speaker 2: for about five years before moving over to Melbourne here
Speaker 2: working for a reasonably large law firm.
Speaker 1: So that was like a career progression, was it to
Speaker 1: come to Melbourne and step up in the law and
Speaker 1: into a larger law firm.
Speaker 2: It was. It was particularly in New Zealand because intellectual
Speaker 2: property law firms there are a very small number. It's
Speaker 2: quite a specialized area. I've got a science background, so
Speaker 2: all well, most paindent attorneys have a technical background, so
Speaker 2: I specialized in genetics and went from sitting in a
Speaker 2: lab going I've got to do something more with this
Speaker 2: degree that can actually apply more world right experience, and
Speaker 2: so I had the option of going into the intellectual
Speaker 2: property law space and learning that specific area of law
Speaker 2: or heading into genetic counseling. So I decided to go
Speaker 2: down the IP law route and rarely focus on that area.
Speaker 2: It was actually quite an interesting space with what you'd
Speaker 2: come across.
Speaker 3: I expect.
Speaker 1: So I at once staj I was a technology editor,
Speaker 1: and I was very interested in that area. But of
Speaker 1: course I was only interested in the stuff that journalists
Speaker 1: are interested in, you know that when it was really
Speaker 1: really interesting on patent's technology, patents, et cetera, software patents
Speaker 1: and the crazy things that are patented, like the Harley
Speaker 1: Davidson sound I believe is patented for instance, which which
Speaker 1: is which is an interesting one to some people who
Speaker 1: don't like that sound, but let me tell you it
Speaker 1: was patent. We are wandering here and the listener is saying, hey, James,
Speaker 1: where are you going here? So so the reason I
Speaker 1: want to talk to Nicola, folks is a very particular story. So, Nicola,
Speaker 1: there you were, and you were in mid career, shall
Speaker 1: we say, as a corporate lawyer, very very particular speciality
Speaker 1: in patent law, which I imagine is a super hot area
Speaker 1: and very global area in in in law and then
Speaker 1: in your and you had no intention of being a
Speaker 1: financial advisor. I'm sure you you were well paid, et cetera.
Speaker 1: But then you had a first hand example of why
Speaker 1: we need to be across our financial affairs. Just tell
Speaker 1: us briefly what occurred, and you were your family were
Speaker 1: back in New Zealand I'm guessing and you were in Melbourne.
Speaker 2: That's correct. What had happened was my dad was diagnosed
Speaker 2: with multiple sclerosis. He was fifty five at that time,
Speaker 2: so heading towards his later career stage and very much
Speaker 2: gearing up for what we would say retirement. We fifty
Speaker 2: five to sixty five, A lot of people are thinking
Speaker 2: about retirement. And his diagnosis and result of essentially losing
Speaker 2: the use of his right side so he couldn't write,
Speaker 2: walking was problematic. That really changed him and what he
Speaker 2: could do work wise. So he ended up leaving his job.
Speaker 2: But the thing with him was he could leave his
Speaker 2: job because he had an income protection policy and place
Speaker 2: and that pays his salary for the next ten or
Speaker 2: so years.
Speaker 3: Can I ask you what?
Speaker 1: What? Can I ask you what? What was his job
Speaker 1: or what was he self employed or was he employed?
Speaker 2: He was a very senior executive working for Telecom, so
Speaker 2: the equivalent of Toustra here in so I.
Speaker 1: Would strike it would strike me if you were in Telstra,
Speaker 1: the last thing you'd need to be in come protection insurance,
Speaker 1: I associate. I had income protection insurance for maybe a
Speaker 1: decade when I was in charge of a startup company,
Speaker 1: and I did feel not so much precarious, but I
Speaker 1: was acutely aware that it could all come tumbling down
Speaker 1: or something that could go very wrong. But now I
Speaker 1: in a in you know, like a global media group,
Speaker 1: I don't have it, and I didn't have it before that.
Speaker 1: So it strikes me that he may have been cautious.
Speaker 1: Were your family and were you cautious anyway? Financially?
Speaker 2: This is an interesting question because as a family, we
Speaker 2: didn't really talk about money that much, and that's a
Speaker 2: very common statement that people make. For me, seeing what
Speaker 2: Dad went through, that made me start thinking about my
Speaker 2: own situation financially. Like you said, I was in law,
Speaker 2: earning good money, and it really changed the way I
Speaker 2: thought about things. It changed having Dad go through what
Speaker 2: he went through. I went, I've got to make sure
Speaker 2: my partner and I set up I've got to make
Speaker 2: sure that if something happens to me or term mark
Speaker 2: that where we're covered, and.
Speaker 3: So you had an elevated you had an elevated.
Speaker 1: Awareness correct of the of the trauma, the financial trauma
Speaker 1: that could occur, and you're you're just tell us a
Speaker 1: little bit more with your dad. Income protection is notoriously
Speaker 1: expensive and extremely narrow, it seemed to me in the
Speaker 1: terms of of the payouts. So just would you mind
Speaker 1: just explain to the listeners, like what what it is
Speaker 1: and whether it was worth it in your case, and
Speaker 1: what were the risks what might have happened to not
Speaker 1: make it worth it.
Speaker 2: Ah, So there is a slight difference with what dad had.
Speaker 2: Dad had an insurance policy based in New Zealand, uh
Speaker 2: and so it was part of his package, so to speak.
Speaker 2: So a lot of companies have that policy in place
Speaker 2: and they pay for those premiums and so forth. So
Speaker 2: I think he was quite lucky because.
Speaker 1: The company had was paying for the income protection policy. Okay,
Speaker 1: Well that is I imagine relatively unusual.
Speaker 3: Yes, okay, yes.
Speaker 2: Where you think about where Australians are at the moment,
Speaker 2: a lot of people have insurance, particularly income protection or
Speaker 2: total and permanent disability insurance, life insurance, all attached to
Speaker 2: their superannuation policies, and a lot of that is based
Speaker 2: on just set normal amounts that the superfund will say
Speaker 2: based on the income that they're getting in from the
Speaker 2: employment and the salary contributions. So not a lot of
Speaker 2: people realize that they actually have these insurance policies.
Speaker 3: In place, nor do they if they're in a big fund. Correct,
Speaker 3: if they're in a big fund, correct, not in certain mode?
Speaker 3: Super Obviously you're on your own.
Speaker 2: That's right, that's right. And so a lot of people
Speaker 2: don't necessarily stop and look at superannuation to start with,
Speaker 2: but they don't necessarily then go, Okay, what else do
Speaker 2: I have to look at from a superannuation cover perspective?
Speaker 2: So not not just the balance, but insurance is how
Speaker 2: much is that insurance for? And what am I going
Speaker 2: to get if something happens to me? And generally people
Speaker 2: going off a little bit of a tangent here, but
Speaker 2: a lot of people don't look at those things until
Speaker 2: it's too late, until something happens and they go and
Speaker 2: see someone to work out this mess. That's so the crew.
Speaker 1: Part of this is if you're diagnosed, right, it's too late, correct,
Speaker 1: isn't that? It? Basically if I'm diagnosed with something now
Speaker 1: and I go back into income protection, they're going to say,
Speaker 1: they're going to say forget it. So it's very much
Speaker 1: you precluding something. It's very much a personal insurance and
Speaker 1: I'm not here to sell in con protection. I'm still
Speaker 1: skeptical about it, Nikola, because it's so expensive, it's so
Speaker 1: so exciting.
Speaker 2: And that's the biggest thing, isn't it is there's always
Speaker 2: this balance between making sure that would you say, having
Speaker 2: an insurance policy, for example, that it's there for the
Speaker 2: right reasons and it's there for what you want it
Speaker 2: to be for. So say, for example, someone who has
Speaker 2: coming to the end of their career, they've built up
Speaker 2: a really nice nestig they're only going to be working
Speaker 2: for another year or something, then you kind of question it.
Speaker 2: As opposed to someone who may be just starting out
Speaker 2: and building their wealth and wanting to maximize their income.
Speaker 2: At that stage, their biggest asset is the time that
Speaker 2: they have to accumulate wealth, but also their ability to
Speaker 2: earn an income. And so it is that I think
Speaker 2: this is where the benefit of having an advisor comes
Speaker 2: into it. Have been able to have those conversations and say,
Speaker 2: is this actually still right for you right now based
Speaker 2: on your situation and where you're going, and the cost
Speaker 2: of it is ever increasing, and we've seen premiums increase
Speaker 2: time and time again, and a lot of PEO people
Speaker 2: do sit there and go, what is what is the
Speaker 2: benefit that I'm going to get out of this? And
Speaker 2: it's a reasonable question, particularly if you start thinking about
Speaker 2: where we're at today with cost living pressures and this
Speaker 2: knowledge that when we get to retirement that the age
Speaker 2: pension system, for example, was probably going to be extremely
Speaker 2: different to what it is right now. So we do
Speaker 2: have to be more cautious about what we're what is
Speaker 2: being paid out of our super funds in terms of
Speaker 2: fees and charges and things like that. So it is
Speaker 2: it is a tough.
Speaker 1: And in terms of you becoming an advisor then from
Speaker 1: that period in your dad's case and he had a mess,
Speaker 1: which is is progressive obviously and you can't it can't
Speaker 1: be cure now. But you just said, was there a
Speaker 1: distinct link between that happening and you're becoming an advisor?
Speaker 2: It's it was what happened was Dad was diagnosed and
Speaker 2: I remember, I remember that conversation I had with him
Speaker 2: around his illness as diagnosis and being able to get
Speaker 2: this insurance pay out. And I sat there and I went,
Speaker 2: I'm going to have to start learning about money. I
Speaker 2: have to learn about this unknown language that effectively it
Speaker 2: is and how it all works.
Speaker 1: So and even that you were a very advanced professional,
Speaker 1: but you were, and I meet this so often doctors, dentists,
Speaker 1: lawyers are terrific at what they do, but they don't
Speaker 1: know anything about and they're terrible investors often as well. Yes, yes,
Speaker 1: we come across the.
Speaker 2: Yes, definitely, definitely highly intelligent, smart people, well known in
Speaker 2: the field, and you know, I have a really really
Speaker 2: high level of income, but they don't understand it. And
Speaker 2: this is the biggest thing with money is it is
Speaker 2: It is a language. It is Once you understand it,
Speaker 2: it becomes more and more. It's like anything when you're
Speaker 2: learning something.
Speaker 1: It's very interesting you said that there was a woman
Speaker 1: at Na Carew who was on the Financial Review a
Speaker 1: long long time ago, and she had a series of
Speaker 1: books called The Language of Money. It was on the
Speaker 1: early sort of person of finance books in Australia. So
Speaker 1: just so, there was obviously a co protection insurance which
Speaker 1: in a very fortunate fashion in your household saved the
Speaker 1: day and even more fortunate, was actually paid for by
Speaker 1: the employer, which.
Speaker 3: Is rare to tell me.
Speaker 1: In terms of more broadly, when you meet people now
Speaker 1: as an advisor, a lot of advisors have these rules
Speaker 1: about having cash for a rend and how much you
Speaker 1: should have. Do you talk to people about that and
Speaker 1: what do you say?
Speaker 2: Yes, I do talk to people about that, and everyone's
Speaker 2: specific situation is different in terms of the amount and
Speaker 2: what they're doing and what they should do. So for example,
Speaker 2: retirees who are living on their superannuation wealth that's been accumulated,
Speaker 2: making sure that there is a set bucket of money
Speaker 2: of cash that can be accessed if they need it.
Speaker 2: Compared to someone who is starting out in their career
Speaker 2: and working a lot where I was going to say,
Speaker 2: working really hard to try and establish themselves from a koreer.
Speaker 2: You look at purchasing a house because that's the Australian
Speaker 2: and New Zealand dream, but then also look at raising
Speaker 2: a family. You know, making sure that people are allocating
Speaker 2: at least X amount towards that buffer or that emergency
Speaker 2: account because you don't actually know when it's going to
Speaker 2: be needed and So it's taking those two extremes and
Speaker 2: seeing where people are at and making sure that we're
Speaker 2: still getting that allocation to an emergency buffer because you
Speaker 2: just don't know when something's going to happen.
Speaker 1: Do you have a rule for the buffers for the
Speaker 1: pre retiree and for the retiree? Some people say a
Speaker 1: year's worth of money? Some people say three months?
Speaker 2: Have you a ruled? I? Again, it depends. But for
Speaker 2: the retire pre retirees, that year at least is easily achievable.
Speaker 2: For someone that's starting out, I think it's about not
Speaker 2: scaring them too much and working towards a relatively easy
Speaker 2: and potentially achievable goal. So three months, for example, sitting
Speaker 2: in cash.
Speaker 1: Three months household expenses. So what you're thinking three months? Yeah? Yeah,
Speaker 1: I And once you have that, if you can keep
Speaker 1: that and what would you keep it in a cash
Speaker 1: account or what would you keep.
Speaker 2: It cash account? High inter're saving this account, term deposits
Speaker 2: something well, term desposits again question mark around liquidity there,
Speaker 2: but particularly now with the interest rates being where they're at,
Speaker 2: you can make that money work for you. But yeah,
Speaker 2: that that gives you access, It gives you the ability
Speaker 2: to go that money is there.
Speaker 1: Just in case, Yes, exactly, a rhetorical question, why would
Speaker 1: a retireing need. Is the retireing going to get their
Speaker 1: pension or their retirement or whatever, Why would the retireing need.
Speaker 2: So it's say, for example, someone comes in they've got
Speaker 2: money super invested in superannuation. It's the similar kind of
Speaker 2: concept with having a bucket of money that could be
Speaker 2: easily accessible if an emergency happens within their superannuation hunt
Speaker 2: and particularly because we know at that stage of life
Speaker 2: people are drawing on their account balances, the core capital. Yeah,
Speaker 2: and the last thing we want people to do is
Speaker 2: have to sell an investment before sellers of an investment
Speaker 2: at a particular point in time if there was a.
Speaker 1: Crash, that's what you're thinking. And there's always going to
Speaker 1: be a crash. We don't know when the next one is, unfortunately,
Speaker 1: but around yeah, yeah, And so what you're saying is
Speaker 1: that the disaster is they're selling their come bank shares
Speaker 1: and the price has halved. And it's the stupidest thing
Speaker 1: in the world because that bank is going to come back,
Speaker 1: roaring back to hiring it used to be in any event,
Speaker 1: entirely hypothetical here, folks, but I hope I'm making the
Speaker 1: point clear, right, Okay, So in terms of that, in
Speaker 1: terms of the so I expect you are unusual in
Speaker 1: an advisor in that many advisors their whole thing.
Speaker 3: Is to grow wealth.
Speaker 1: I'm sure you have that too, but also your your advice,
Speaker 1: I expect is informed by this particular trauma with your dad,
Speaker 1: which was where that he couldn't make the money he
Speaker 1: was going to make and be it was going to
Speaker 1: cost an awful his life was going to cost an
Speaker 1: awful lot more than you thought it was going to
Speaker 1: as the years went by. I think what we might
Speaker 1: do actually here because you've designed something over and you
Speaker 1: have a side hustle, except it's a positive side hustle
Speaker 1: on like a lot of side hustles, and Nikola has
Speaker 1: an organization I want to tell you all about. We'll
Speaker 1: take a short break and we'll be back. Hello, Welcome
Speaker 1: back to The Australian's Money Puzzle podcast. I'm James Kirby,
Speaker 1: the editor at The Australian, and I'm talking to Nicola Beswick,
Speaker 1: who is a advisor at FMD Financial Advisors, and you've
Speaker 1: been hearing her story a particular story about how she
Speaker 1: became an advisor. I made the point that a lot
Speaker 1: of the advisors are very good advisors that I know,
Speaker 1: I did something entirely different before they became advisers, and
Speaker 1: I think it does widen their world. Now. In Nicola's case,
Speaker 1: she has from that time and the experience with her
Speaker 1: dad and the shock of all that, and basically the
Speaker 1: shock which pushed her into thinking about money and ultimately
Speaker 1: becoming a financial advisor when she was when she was
Speaker 1: a patent lawyer. She has created an organization which is
Speaker 1: called the Pro Bono Financial Advice Network. Now, Nicola, there
Speaker 1: is out there the very very admirable Financial Counseling Association Counselors,
Speaker 1: a big organization. I've had financial counselor on the show,
Speaker 1: and they are They're very They're great, and what they
Speaker 1: do is terrific. And I'm delighted to see they got
Speaker 1: some more money in the budget federal budget recently so.
Speaker 1: But their work, if I may say, is very much
Speaker 1: focused on people who are in terrible straits financially. In
Speaker 1: conventional fashions, they'd let the bills run up, everything went on.
Speaker 1: Gambling is a particular problem that comes up again and
Speaker 1: again in that area. So you've got something different, Just
Speaker 1: tell me what you've got and what its ambitions are.
Speaker 2: So the pro Bono Financial Advice Network is an organization
Speaker 2: that essentially connects people with a health crisis and we
Speaker 2: work with specific charities with advisors that are willing to
Speaker 2: give pro bono financial advice. Now currently we work with
Speaker 2: the Multiple Grossest Community, the MNDS mode and neuron Disease
Speaker 2: community here in Victoria and pank here, so they specialize
Speaker 2: in pancreatic cancer and IGI cancers and particularly climb clients
Speaker 2: of the years that can't ordinarily afford financial advice.
Speaker 1: Yes, right, which is four which which we know is
Speaker 1: four thousand a year. I mean basically that's that's that's
Speaker 1: the going rate if we'd seen per animal, that's.
Speaker 2: Right, that's right. And what we've done is built and
Speaker 2: continuing to build a network of advisors. And these are
Speaker 2: accredited advisors who are employees or run their own business,
Speaker 2: who have put their hand up to help someone once
Speaker 2: a year who fit that criteria that we've got. Now
Speaker 2: we know that there's a lot of more people in
Speaker 2: Australia outside of those specific charities that need advice and
Speaker 2: are going through a hardship, particularly because of illness and injury.
Speaker 2: That would fit that criteria. So our plans are to
Speaker 2: ever grow the number of people we can help. That
Speaker 2: is also acutely linked to the number of financial advisors
Speaker 2: that exist in Australia as well.
Speaker 1: I mean, so there's fifteen thousand of them, shrink, shrinking,
Speaker 1: fifteen thousands and dropping, yes, ironically not for a whole
Speaker 1: bunch of reasons, which we would do with another time.
Speaker 1: So the idea, the concept is that the advisor, the
Speaker 1: qualified doesn't advisor, gives how much of their time per
Speaker 1: year for you.
Speaker 2: It all depends on the client case.
Speaker 3: Yeah, I see, yes, yes, So.
Speaker 2: It could be some clients they need a conversation for
Speaker 2: an hour just to sit down and get a little
Speaker 2: bit of direction. Some clients who come to us need
Speaker 2: a lot more help than that, So an advisor of
Speaker 2: course would set through with them and go through the
Speaker 2: process of providing financial advice. So the outcome would be
Speaker 2: assisting effectively that client with say insurance applications or dealing
Speaker 2: with Center Link with things like that, depending on on
Speaker 2: their needs.
Speaker 1: So do you guys have to go through the whole
Speaker 1: rigmarole of stepments of advice and all the all the formality.
Speaker 2: Unfortunately, yes, if personal advice and again comes to that
Speaker 2: specific requirement around legislative side of things, right, and and
Speaker 2: we're really fortunate where a lot of advisors do provide
Speaker 2: that service free of charge to a client that comes
Speaker 2: through us from their nets, through the network. Uh, that's
Speaker 2: that's life changing for people and they get that that guidance.
Speaker 2: We've had people that didn't know that they had insurances
Speaker 2: within their superannuation and advisors help the client get that
Speaker 2: insurance paid out, but then also make sure that things
Speaker 2: are structured right as well.
Speaker 1: So okay, okay, yeah, that's well, that's a good side.
Speaker 1: That's the upside, isn't it of the giant super funds
Speaker 1: being so dominant now and the fact that it's compulsory
Speaker 1: super there is a sort of de fact or compulsory
Speaker 1: insurance built in there, invariably not comprehensive of course, but
Speaker 1: but but but life and TPD normally to totally permanent.
Speaker 3: Disability as they call that.
Speaker 1: So if I said to you, I know you've got
Speaker 1: going on this, I know you have a panel of advisors.
Speaker 1: I know you don't have core funding. Correct, and you
Speaker 1: don't have government funding. If I said to you, what's
Speaker 1: the best thing that could possibly happened to the foundation,
Speaker 1: what would it be to.
Speaker 2: Get money to be able to funds a panel of
Speaker 2: advisors full time, to be able to look after these clients.
Speaker 3: Oh, I see, to actually have your own advisors on
Speaker 3: the books. Is that your ultimate ambition? Aha? Yes, I see,
Speaker 3: very very good. Okay.
Speaker 1: And also just on the broader issue that has become
Speaker 1: the theme of the show because of the nature of
Speaker 1: your particular story for someone who is thinking, most people
Speaker 1: have got things rolling, they've got investments, they might have mortgages,
Speaker 1: they do their best on building that. They might also
Speaker 1: give some money to charity once a year around. Now, folks,
Speaker 1: you've got a few weeks left. It's tax deductible. You
Speaker 1: should do it. But in terms of protecting themselves, we'll
Speaker 1: put into we'll put in comprotection insurance on the table,
Speaker 1: and we'll say, so many people will will do that,
Speaker 1: and so many won't, And a lot of people will
Speaker 1: look at and go, oh boy, that's just what I'm
Speaker 1: not going to pay, and they have to make their
Speaker 1: own minds. But apart from income protection insurance, what are
Speaker 1: the other core conclusions you would like to give to
Speaker 1: our listeners about that idea of having the emergency fond
Speaker 1: that everyone should have them.
Speaker 2: I know it's really really boring, but saving that cash
Speaker 2: for a particular point in time can be life changing.
Speaker 2: We we're talking about illness here, and if you think
Speaker 2: about the expenses that go with even trying to get
Speaker 2: to the bottom of being diagnosed, that can be quite
Speaker 2: quickly accrude.
Speaker 1: So Mriyes, yeah, that's that's that's that's terrible istic because
Speaker 1: once you are ironically, once you are diagnosed and you
Speaker 1: know what you have, and then you can work on
Speaker 1: it and presume financially you can work on this. But
Speaker 1: it's a terrible period where you don't know what you've
Speaker 1: got and you're getting very expensive, what are theoretically optional
Speaker 1: examinations from a different specialists. That's when I imagine you're really.
Speaker 2: Correct, and I think those are the things that we
Speaker 2: forget about. But then it's the everyday things like if
Speaker 2: you're a homeowner and your hot water cylinder bursts. You know,
Speaker 2: just being able to access money for that is you know,
Speaker 2: it means you don't have to question it and getting it,
Speaker 2: getting someone in but then also building on that next
Speaker 2: level of if we're going to protect ourselves being across
Speaker 2: where our money is, what what it is doing, and
Speaker 2: do you have the right checks and balances in place.
Speaker 2: That's the biggest the next part of the whole conversation
Speaker 2: around people protecting themselves.
Speaker 3: Okay, terrific.
Speaker 1: And also I think even from the most pragmatic investor
Speaker 1: point of view, you don't ever want to be selling.
Speaker 1: You don't want to be a forced seller, as Nikola
Speaker 1: pointed out.
Speaker 3: And it might just be shares either.
Speaker 1: I mean, you might have put everything into an investment
Speaker 1: property and you might have built that over the years
Speaker 1: and years, and then things go wrong and for no
Speaker 1: other reason that you couldn't pay the mortgage for three months.
Speaker 1: You've got to say that and someone basically basically someone's
Speaker 1: going to win and you're going to lose on that. Okay,
Speaker 1: we'll take short break, we'll be back with some questions.
Speaker 1: Hello and welcome to the Australians Money Puzzle podcast. James
Speaker 1: Kirby here, and I'm talking to Nicola Beswick from f
Speaker 1: m D Financial Advisors. Nicola, apart from apart from being
Speaker 1: a patent lawyer, apart from being a financial advisor apart
Speaker 1: from running the pro bono financial advice network, is of
Speaker 1: course qualified advisor, so she can answer the questions that
Speaker 1: come in and I have just collated?
Speaker 3: Is that the word?
Speaker 1: A few choice questions for her? Okay, Scott, sorry, not Scott. Sorry, folks,
Speaker 1: we read Scott out last week. Brad, thank you for
Speaker 1: concise market commentary.
Speaker 3: You're welcome. Brad.
Speaker 1: I plan to hold some shares and sell after the
Speaker 1: thirtieth of June in order to realize capital gains in
Speaker 1: twenty twenty four twenty five at a lower tax rate
Speaker 1: because of the Stage three tax cuts. Do you believe
Speaker 1: others will do the same and will there be any
Speaker 1: significant impact on markets in the next year as a
Speaker 1: result of Stage three tax cuts?
Speaker 3: Big question?
Speaker 1: Why don't we just put the macropart on one side
Speaker 1: on what Stage three tax cuts will do. Maybe they'll
Speaker 1: be inflationary, maybe they won't. Of course they'll be inflationary,
Speaker 1: but they'll be offset by other things perhaps. But what
Speaker 1: have you been telling clients about Stage three and what
Speaker 1: to do that everyone's getting a tax cut basically at
Speaker 1: every level.
Speaker 2: That's right, but it all depends on what the motivation
Speaker 2: is behind the reason why you're selling something is and
Speaker 2: your specific situation. I think that is the most important
Speaker 2: piece of the puzzle, particularly if you're selling something to
Speaker 2: realize again, it's taking your specific reasons and going yes,
Speaker 2: this is a good time to do it. Yes, basically
Speaker 2: the tax implications will be better next financial year. But
Speaker 2: what we've also got to do is look at why
Speaker 2: are you selling, what's the motivation behind that, and are
Speaker 2: there any other things that you can do to minimize
Speaker 2: the capital gains tax that you'll incur. Those things are
Speaker 2: really really important when making a decision to to sell
Speaker 2: something in there in someone's personal name. One of the
Speaker 2: things that is really quite useful at the moment that
Speaker 2: the government brought in quite a number of years ago
Speaker 2: now was the catch up concessional contributions. That has been
Speaker 2: really really beneficial for a lot of people wanting to
Speaker 2: liquidate an asset like an investment property for example, minimize
Speaker 2: the gains the money I.
Speaker 1: Get the money into super on a tax concessional basis,
Speaker 1: because they can do five years under most circumstances, you
Speaker 1: can you can add five years together and put it
Speaker 1: all in in one hit. Yeah, Okay, that's a good point.
Speaker 1: We'll keep that in mind.
Speaker 3: Folks.
Speaker 1: Remember this is not advice. This is always information on
Speaker 1: the show. It is not advice. One other thing I
Speaker 1: suppose on the tax cuts is what people I'm really
Speaker 1: saying is my tax, my tax right off will definit
Speaker 1: by definition, be bigger this year than next year because
Speaker 1: next year I'll be paying that's tax. Isn't that really
Speaker 1: how it works? But I would think nicola really for
Speaker 1: a lot of people on salaries, especially at the operand
Speaker 1: especially the tax cut is pretty teeny. It's important in
Speaker 1: middle income, but over one hundred and is it over
Speaker 1: one hundred and ninety? I think they'reabouts you're talking. You
Speaker 1: get a couple of grand more a year post tax,
Speaker 1: and that's great, look at you three or four grand,
Speaker 1: but it's not exactly worth to be constituting your investment.
Speaker 3: Is that the posture makes exactly it?
Speaker 2: I think that's that's the very specific that's the exact
Speaker 2: point is have a have a broader look at why
Speaker 2: you're doing this first, and.
Speaker 1: Then yeah, correct, bigger, bigger picture. Don't get don't get
Speaker 1: two micro folks, all right, David. David says, this is
Speaker 1: one of these We get a lot of these questions.
Speaker 1: They are They are what I call creative questions. Why
Speaker 1: not limit the home exemption counted towards eligibility for age
Speaker 1: persons to the average value of the Australian home. It
Speaker 1: seems grossly unfair that other taxpayers are currently funding the
Speaker 1: retirement of some very asset rich people.
Speaker 3: David. I have no problem with your.
Speaker 1: Statement that it's grossly unfair that you can have a
Speaker 1: ten million dollar house on Sydney Harbor and get the pictures,
Speaker 1: because you can. But how you would do it more precisely,
Speaker 1: I don't know. But certainly it's as good an idea
Speaker 1: as any other. The average value of the Australian home.
Speaker 1: People would say, oh, hang on a second, that gives
Speaker 1: a huge advantage to the people. You know, obviously some
Speaker 1: houses are way low.
Speaker 3: Average and some are way above average.
Speaker 1: But it's an idea we're taking on board, and thank
Speaker 1: you very much for sending it in. But you was
Speaker 1: there something you were going to say there, Nikola.
Speaker 2: I think the one thing that a lot of people
Speaker 2: miss when we talk about people her on the age
Speaker 2: pension is the level of income and assets that people
Speaker 2: have to have to be able to get the full
Speaker 2: age pension. That is something that there is this cohort
Speaker 2: out there that are precisely fit into that camp in
Speaker 2: terms of having a home in Sydney Harbor and not
Speaker 2: having anything else. But the majority of people that are
Speaker 2: on the full age pension don't really have a lot,
Speaker 2: and sometimes the only thing that they do have is
Speaker 2: their home. So to be able to count that as
Speaker 2: could detrimentally impact those people. So bringing it in could
Speaker 2: be quite a challenge for any government.
Speaker 1: Yeah, okay, but I suppose at the heart of this
Speaker 1: is the issue that the home, the family home, is
Speaker 1: a de facto exempt from pension access estimations, and that
Speaker 1: creates all sorts of problems, all sorts of problems. One
Speaker 1: of the big problems is about the whole thing about
Speaker 1: using your super for buying a family home. Well, well,
Speaker 1: unfortunately the person with the home wins. The person who
Speaker 1: wants her home wins for all ages in our tax system. Okay, Hey,
Speaker 1: final question, which isn't really a question that you're not
Speaker 1: going to be able to answer, Nikola, but from Jesse
Speaker 1: j E. Sse she says, I'm looking for a trusted
Speaker 1: financial advisor. I'm a regular wristler. Are you able to
Speaker 1: share a list of advisors you've had on the show. No,
Speaker 1: I'm not Jesse. However, however I will say this. Look
Speaker 1: two things. We have a list published in The Australian's
Speaker 1: Top hundred Financial Advisors list that's there every year. And separately,
Speaker 1: anyone who is an advisor who's been on this show,
Speaker 1: well obviously by definition I endorse them. And all you
Speaker 1: have to do is go back through your app and
Speaker 1: have a look at all the names that were advisors
Speaker 1: on the show, and there are dozens and dozens of them.
Speaker 1: Hopefully that's useful to you. Okay, very good, Hey, thank
Speaker 1: you very much, Nicole. Really interesting, interesting story, and best
Speaker 1: of luck with your practice and particularly best of Look.
Speaker 1: I love the idea the pro bono financial advice network.
Speaker 1: I think it's really good and I hope someone's listening
Speaker 1: out there that you'll get some volunteers hopefully, but also
Speaker 1: someone with the deep pockets perhaps might come and knock
Speaker 1: on your door. Okay, thank you. Okay, folks, keep the
Speaker 1: questions rolling, and the statements and the observations and the complaints.
Speaker 1: They're all equally welcome. The Money Puzzle at the Australian
Speaker 1: dot com dot Au talk to you soon.