Speaker 1: Now on afternoons All Things Finance with Blake went from
Speaker 1: Pretzel Wealth. Organize your free consultation at Pretzelwealth dot com
Speaker 1: dot au.
Speaker 2: Well, there may be a curfew in downtown LA, but
Speaker 2: there's no curfew here. If you've got a question about
Speaker 2: your personal finances. The best in the business Blake went
Speaker 2: is here with us from Pretzel Wealth. Of course, Areo
Speaker 2: Blake Michael. Now, all sorts of things in the world
Speaker 2: of finance. But I mean the stock market's nudging record
Speaker 2: highs here a Wall Street seems to be back to
Speaker 2: basically where it was. But as you were saying during
Speaker 2: the break there, the big Beautiful Bill Love a bit
Speaker 2: of a literation that, depending how that goes, will have
Speaker 2: an impact on where the stock market's land.
Speaker 3: Right, Yeah, certainly, big beautiful Bill. That's our next hurdle.
Speaker 3: So you know, it's Trump's baby, offering tax cuts, incentives,
Speaker 3: increasing the debt, sealing, all this sort of stuff is
Speaker 3: coming through if that bill passes. Now, if it passes,
Speaker 3: the question is, okay, when does America get their act
Speaker 3: together and start raining in the spending and reducing I
Speaker 3: suppose their debt, because if you're extending the debt ceiling
Speaker 3: over there. Well, it's assumed that you're going to go
Speaker 3: up to that debt ceiling and take on more and
Speaker 3: have higher levels of borrowing. And you know, we're still
Speaker 3: at a still in an era where interest rates are
Speaker 3: quite high over in America, so that could be quite
Speaker 3: inflationary for them. Interest rates from the perspective of bond
Speaker 3: markets and debt markets, those interest rates may increase, which
Speaker 3: causes concerns because if you're taking on more debts at
Speaker 3: a higher cost via the interest rates, then.
Speaker 4: The world starts a.
Speaker 3: Look at American think, well, hang on a minute, you're
Speaker 3: becoming the quality of your debt is less credible, and
Speaker 3: so it will cause some concern for markets. Markets if
Speaker 3: interest rates are moving high, there's tighter you know, there's
Speaker 3: concerns for businesses if they're borrowing to try to feel
Speaker 3: their expansion. And so it's not a great outcome if
Speaker 3: it passes unless they can produce income or increase income,
Speaker 3: which is Trump sort of saying, well, we want to
Speaker 3: do that through tariffs.
Speaker 4: We want to get some income that way. If it doesn't.
Speaker 3: Pass, well, taxes are elevated, and so that's not great
Speaker 3: for consumers because consumers have less money to spend, and
Speaker 3: so businesses suffer.
Speaker 2: So he's sort of saying they're damned if they do,
Speaker 2: and they damned if they don't.
Speaker 3: To some degree, yes, exactly, so they want it to
Speaker 3: pass because it gives them more flexibility to spend money
Speaker 3: and get money passing through the economy. But at the
Speaker 3: same time, if it doesn't pass, well.
Speaker 4: Okay, what do we do with the debt problem? It's
Speaker 4: damned if that.
Speaker 2: This is it. I mean, as people know listening to me,
Speaker 2: I've been speaking about the American debt problem for a
Speaker 2: long time, but it's only getting worse. And it got
Speaker 2: a lot worse under Biden. Under Trump, it's going to
Speaker 2: get worse. I don't think the tariff's is going to
Speaker 2: bring in anywhere near as much as they claim, and
Speaker 2: because the tariffs are essentially paid for by the American consumer,
Speaker 2: I mean at the end of the day, So again
Speaker 2: that siphons money out of the economy gives it to
Speaker 2: the government. So they are at a bind in America.
Speaker 3: They are.
Speaker 4: It's tough.
Speaker 3: It's tough, and so you know, because they're such a
Speaker 3: large economy. If they're getting weaker or there's flowering effects
Speaker 3: around the world, and so we've just got our eyes
Speaker 3: on this big beautiful bill seeing how it goes, and
Speaker 3: it could go either way.
Speaker 2: Okay, yeah, I mean politically. I was watching bit of
Speaker 2: Bill O Riley last night and he made a very
Speaker 2: valid point that. Okay, let's say the Senate does not
Speaker 2: approve because the House any approved by one vote. Two
Speaker 2: Republicans win against it, so it only just got through
Speaker 2: the Senate. Let's say some of the conservative Republicans are
Speaker 2: too much spending, we bot this down. As you say,
Speaker 2: the deductibility, I think fifty percent of deductibility automatically is
Speaker 2: wiped away two and a half percent across the board.
Speaker 2: Increase on income tax or that's the average or something.
Speaker 2: Recession likely to hit midterm elections next year, the Republicans
Speaker 2: will lose. Trump will be a lame duck. So you
Speaker 2: end up with about two years of just nothing productive
Speaker 2: happening in Washington, which is again bad for the economy.
Speaker 2: So everywhere you try to turn to pivot out of this,
Speaker 2: there are roadblocks.
Speaker 3: It's tough, tough times over there, and that does have
Speaker 3: impacts on market. So whilst the market is doing quite
Speaker 3: well at the moment, it's recovering from the sell off
Speaker 3: that occurred off the back of Liberation Day and Trump's
Speaker 3: tariff's being introduced to the world. Markets have calmed down
Speaker 3: from there. They've recovered, which is great to see. But
Speaker 3: again it's about saying, okay, well what's ahead of us. Well,
Speaker 3: we've got this decision that needs to be made and
Speaker 3: the outcome may not be so great for markets. Now,
Speaker 3: you don't go off and sew your portfolio down. You
Speaker 3: just analyze what comes through, make a rational decision, and
Speaker 3: then go from them.
Speaker 2: Like that analogy. I You've just gone over the mountain
Speaker 2: and you realize there's a lot more of the alps
Speaker 2: yet to climb, and they're higher again than it's That's right, okay,
Speaker 2: one three, one eight seven three. Let's get to some questions.
Speaker 2: Gary's phone in, can I Gary? What's your question for Blake?
Speaker 5: Yes, good, phon. I'm just wondering if a couple leave,
Speaker 5: as part of a will a home to their child,
Speaker 5: but then also a man to each grandchild. So let's say,
Speaker 5: for instance, the pull home and then one hundred thousand
Speaker 5: dollars or whatever to each grandchild. If the sun decides
Speaker 5: to move into the family home and pay that a
Speaker 5: man to the grandchildren. Does that come off his allowance
Speaker 5: that he's allowed to have before his pension? So is
Speaker 5: that classes like income that he should really have.
Speaker 3: So the situation you're transferring as part of the estate,
Speaker 3: transferring your home to a child and they're going to
Speaker 3: pay rent, that is that what's happening.
Speaker 5: No, No, what it is is that the home was
Speaker 5: to go like this child and also a number of
Speaker 5: grandchildren get a man of money each. If the son
Speaker 5: wants to live in the family home and pay the
Speaker 5: money to each of their children who are my grandchildren,
Speaker 5: would that be considered like an asset that he has
Speaker 5: that he's not Yes, so he hasn't used for pension.
Speaker 3: Yeah, for sendling purposes. So if the funds were to
Speaker 3: go to the child and then they do something with
Speaker 3: those moneies after then so distribute it to their children
Speaker 3: or nieces nephews, then that's considered a gift on their side,
Speaker 3: and so it can impact or it does get included.
Speaker 3: I suppose there's an asset potentially for age pension purposes
Speaker 3: or sendling purposes.
Speaker 4: One way to get around that might.
Speaker 3: Be to distribute money is to the grandchildren directly and
Speaker 3: so perhaps you need to think about if the grandchildren
Speaker 3: under the age of eighteen, who's going to look after
Speaker 3: the money? Is it in trust for them? How does
Speaker 3: that all work? So speak to a solicitor about this.
Speaker 3: But maybe it's best to send the money or direct
Speaker 3: the money to the grandchildren. Doesn't go to the child
Speaker 3: receiving the property as well, and so if they move
Speaker 3: into If the child moves into the home, it's classed
Speaker 3: as their main residence, so it's not picked up for
Speaker 3: Sentillink purposes, but worthwhile having a chat with the solicitor
Speaker 3: just to see what the family dynamics look like. Raise
Speaker 3: any concerns if you're worried about the estate being contested,
Speaker 3: speak to them about some of those concerns. But for
Speaker 3: Sennelling purposes. If the child receives everything and then they
Speaker 3: decide to distribute money themselves cash to the grandchildren, then
Speaker 3: perhaps there would be some issues with the asset.
Speaker 4: Test and gifting rules.
Speaker 3: So just get some advice around this, understand the whole
Speaker 3: family structure, and then make a decision from them.
Speaker 2: Yeah, so financiers and loyals and equal measure, I think
Speaker 2: they will, I think so. Yeah, all right, Gary thank you.
Speaker 2: Good question, no doubt, one that is being mulled by
Speaker 2: a number of people as we speak. Blake went hear
Speaker 2: from Prenzl Wealth, of course, and you can book a
Speaker 2: complimentary consultation with Blake today. Do it Pretzelwealth dot com
Speaker 2: dot au Blake. The total super balance cap that's changing.
Speaker 2: What's happening?
Speaker 3: Yeah, so that's going to increase to two million dollars
Speaker 3: that This is sort of old news, I suppose, but
Speaker 3: it's something relevant for endo financial year planning because if
Speaker 3: you're getting close to that one point nine million dollar
Speaker 3: total superbalance cap which is currently in place, it's going
Speaker 3: to two million. Maybe you're thinking, well, I'm at an
Speaker 3: age where I can access my super and potentially do
Speaker 3: some recontributions. Recontributions are effective for cleaning up death taxes
Speaker 3: in super. So if you leave money or superannuation to kids,
Speaker 3: non financial dependents, they may pay a fifteen percent tax
Speaker 3: on your superannuation.
Speaker 4: So we want to try to clean that up.
Speaker 3: Now, if you're around that one point nine mark, and
Speaker 3: we've seen a couple of clients last week sort of
Speaker 3: ad that threshold, one thing to think about is okay,
Speaker 3: well guess we could recontribute hundred and twenty thousand dollars
Speaker 3: this year, So pull the money's out, put them back in.
Speaker 3: Great off we go, possibly do it next financial year.
Speaker 3: But if we're if we're too far, very close to
Speaker 3: that total superbalance cap coming into the new year, we
Speaker 3: might not be able to contribute as much as what
Speaker 3: we could. If we sort of put some planning in
Speaker 3: place and say, well, how do we reduce this total
Speaker 3: super balance amount? So inside of super you may want
Speaker 3: to withdraw sufficient funds this side of the financial year.
Speaker 3: Possibly pull out your four hundred and eighty thousand dollars,
Speaker 3: recontribute one twenty this year, keep your superbalance below or
Speaker 3: low enough to be able to put in another three
Speaker 3: hundred and sixty next financial year. And by doing that,
Speaker 3: possibly you're getting or you're recontributing another two hundred and
Speaker 3: forty thousand. Why does that matam, Well, if you're paying
Speaker 3: fifteen percent tax on that children and forty thousand dollars,
Speaker 3: Well there's three thirty six thousand dollars that you're going
Speaker 3: to save for the kids. Now you get no benefit whatsoever,
Speaker 3: but the kids may benefit from it. So just encouraging
Speaker 3: you know, we're heading into the end of financial year.
Speaker 3: If you're thinking about recontributing, you're up at the total
Speaker 3: superbalance cap. Maybe it makes sense to get some advice
Speaker 3: around this, pull out larger amounts, wait till July when
Speaker 3: that rolls around, and then get larger amounts back in.
Speaker 3: But total superbalances are a thing. You're effectively unable to
Speaker 3: put money into super if you exceed two million dollars.
Speaker 4: The total super balance also.
Speaker 3: Impacts your ability to look back over previous financial years
Speaker 3: make tax deductible contributions, and potentially, if your superbalance is
Speaker 3: less than three hundred thousand, you may get a work
Speaker 3: test exemption, which can be quite valuable for those who
Speaker 3: have taxable income. But they've finished up work this financial
Speaker 3: year and next year they want to get a tax deduction.
Speaker 3: So think about there. Get some advice before you do anything.
Speaker 3: Of course, make sure you're doing the right implementing the
Speaker 3: right strategies, and you're not doing yourself any harm.
Speaker 2: Okay, just tell me this because I'm a simple person
Speaker 2: with financial matters. As you know, the total super balance
Speaker 2: cap will be two million, yes, and yet we're talking
Speaker 2: here about people with three million dollars and more in
Speaker 2: their Super that could be targeted by this other government idea.
Speaker 2: How do people get to that point?
Speaker 4: How do they get to that point?
Speaker 3: Well, they've already put the money into Super and they've
Speaker 3: they've possibly already have that money sitting inside of Super.
Speaker 3: So the two million dollars or started off I think
Speaker 3: back in twenty seventeen where the limit was one point
Speaker 3: six million.
Speaker 2: Before that, there was no limit before.
Speaker 3: That, no limit, no, so you could get large amounts
Speaker 3: into Super and off you go. But those with balances
Speaker 3: of three million dollars or more, they've either experienced some
Speaker 3: pretty strong investment returns. A few clients of ours have
Speaker 3: dabbled in bitcoin themselves, not through our advice but on
Speaker 3: their own, so and they've taken that risk and they've
Speaker 3: seen pretty good return through Super through Super, that's right.
Speaker 3: So they've had to have a self managed super funds,
Speaker 3: they've invested in bitcoin and done well. Now we wouldn't
Speaker 3: advise that because of the risks involved, very volatile.
Speaker 2: So theoretically, sorry to cut short, sooretically they might have
Speaker 2: had one point three million in their Super account. They've
Speaker 2: give me a couple hundred thousand a bitcoin. They still
Speaker 2: will under the two million but that's just gone like topsy,
Speaker 2: So now they're whale over three yes, and they're just
Speaker 2: a victim.
Speaker 3: Of their success exactly right, which is not something to
Speaker 3: be upset about. I mean, yes, you're above and so
Speaker 3: yes there may be this tax if it comes into
Speaker 3: playing or when it comes into playing, and so that
Speaker 3: that's going to be effected. So yeah, people have already
Speaker 3: got the money into super it's grown. That's why you're
Speaker 3: above three million. It's not by putting extra contributions in
Speaker 3: in the last couple of years because you have been limited.
Speaker 2: Good to speak as always, Thank you, Blake, and we'll
Speaker 2: catch the same time next week.
Speaker 4: So you there.
Speaker 2: Blake went from Pretzel, remember that complementary consultation pretzelwealth dot
Speaker 2: com dot are you