Money Australia - August 2022

92 Pages·2022·50.3 MB·English

TIPS FOR SELLING TROUBLE IN THE OFFICE: MORE FOR YOUR CASH
AS HOUSING COOLS HOW TO MAKE IT FAIRER HIGHER SAVINGS RATES
CREATING FINANCIAL FREEDOM
BOOK EXTRACT:
JESSICA IRVINE
AUGUST 2022 AUS $8.95 NZ $9.95 ISSUE 258 DEBUNKS THREE
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COMMON MONEY
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Guide to saving
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CONTENTS
32 20 52
COVER STORY INTERVIEW LIFETIME OF CARE
Build up your defences George Peppou, pioneer How to set up a plan for
for an uncertain future in laboratory-grown food a disabled child
ON THE COVER UPFRONT MY MONEY
32 Strengthen your finances 6 Editor’s letter 42 Careers: Phil Slade overhauls
today’s office
24 Saving for school fees 8 Our experts
44 Banking: Michelle Baltazar
42 A fair go in the office 10 My money, my life
finds the best savings rates
44 Higher savings rates 12 News & views
46 Budgeting: Jessica Irvine
46 Money myths busted 16 In brief
48 Student loans: Tom Watson
62 Help for first time buyers 20 Interview: Alan Deans counts the cost
64 Tips for selling in a cooler market 24 Ask Paul 50 Mind games: Phil Slade
82 Shares feel the fear 28 Smart spending 51 Small business: Anthony O’Brien
31 Paul’s verdict 52 Family money: Susan Hely
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4 MONEY AUGUST 2022
AUGUST 2022, ISSUE 258
62 76 80
FIRST-TIME CRISIS HEAVY METAL PROFIT MOTIVE
Rent-to-buy and shared Gold-plate your portfolio Capitalise on the
equity schemes can help to fight inflation market turmoil
PROPERTY INVESTING SHARES
54 Renovations: Tracie Ellis 66 Super: Vita Palestrant laments 79 Best in breed: Scott Phillips
the cost of financial advice sees value in Netwealth
58 Investing tips: Rasti Vaibhav
70 What if...: Annette Sampson 80 Volatility: Steve Johnson
62 Real estate: Pam Walkley
envisages a 15% SG
82 This month: Marcus Padley
64 Selling in a cool market:
72 Retirement: Vita Palestrant recognises the power of fear
Tom Watson outlines the tactics
welcomes the focus on retirees
84 Intelligent Investor:
IN EVERY MONTH 76 Managed funds: Max Riaz Graham Witcomb likes pizza
8 Privacy notice 89 Outlook: It’s scary, but don’t
lose heart, urges Alex Dunnin
78 Need help?
86 Databank
90 The hot seat: Molly Taylor
TAISP SH OFOURS ISNEGL LCIONOGLS THROOWU BTLOE M INA TKHE EIT O FFAFIIRCEER: MHIOGRHEE RFO SRA VYIONUGRS CRAASTHE S SAVINGS & GIVEAWAYS
CREATING FINANCIAL FREEDOM
BOOK EXTRACT: GET
JESSICA IRVINE
AwUwGwU.mSTo n2e0y2m2a gA.cUoSm $.a8u.9 5 NZ $ 9 . 9 @5 MISoSnUeEy M25ag8A US CDOEMBUMMNOYKNTS H MTSHORNEEEY 6 A 12-month subscription 31 A six-month subscription 13 ISSUES
BUILD UP to Money for our Letter to Money for featuring OF MONEY
YOUR DEFENCES of the Month. in Paul’s verdict. FOR $74.99
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14 W in one of five copies 46 Win one of five copies
Guide to saving
and investing for of How to persuade: The of Money with Jess:
an uncertain future 37%
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PAGE 2
IISPSSNNPRHUCEOASPONPERMIDREEDIRE:SN :TW:E G EYR:H X:E WATWDRTUHA ATCET OERCIN EHTCT H THEAOEREN CERCDKSIU SWT TK AIT PMWPOAOIDGTNHCETA 1HSS4H:T SA OTRAFE RSTT HIEN G Michelle Bowden. Jessica Irvine.
PSWFBACIURIMHLYSLE ETW MHR HASEEOL LSPMK T LEHE AYT PSDPEAAADRUVUIUVLIGCNA CHAGTLTTE IFIE TOSORHCNR’ESH R OOOEL MFGFEOOAARORR DCS IUC SAIS JSE UNP GSACRTDEE ALEESDY SIGN UP FOR OUR FREE WEEKLY NEWSLETTERS MONEYMAG.COM.AU
MONEY AUGUST 2022 5
FFRROOMM TTHHEE EEDDIITTOORR
Feedback
K
S
E
D
S Letter of the month
’
R
Simple, sensible advice
O
T for acquiring wealth
I
D
Just make an effort! Marcus Padley, you
E
nailed it!
Your column “Make an effort to
acquire wealth” (July) outlined seven
principles for acquiring wealth – none of
it was rocket science but it was refresh-
ing, very simple and relevant for all.
You also highlighted the importance
of constant effort, something that is
sadly underrated in today’s world but
still so essential for all ages.
Thoroughly enjoyed this article – sen-
D is for ‘defence’ sible and logical – but maybe that’s just
the old-fashioned “boomer” in me!
Danielle
If I could swap places with someone for a quick second, it would be with
Tom Cruise.
Low-income earners need
No one else could fly in the face of the pandemic the way he did last month with
to pump up super too
a movie that pulled a record $1 billion in box office tickets. His financial pay-off
from Top Gun: Maverick was obscene – $US67 million ($98 million) and counting. Your July cover story (“Why you only need
While not all of us can be Hollywood stars, there are still ways to make hay $250k in super to retire”), including ways to
even in the most uncertain of times. In our cover story, “Build your defences” pump up your super, is great for high-income
this month (page 32), we go through your pressing concerns (inflation, falling earners, but missed a little bit of information
property prices and low super returns, to name just a few!) and show you how to for low-income earners.
shift gears. For the past few years, being at home with
We’re also giving you two reasons this month to feel more confident about two young children and only working two
your investments. Check out our feature on how to capitalise on market turmoil days a week, I’ve taken advantage of the gov-
(page 80) and why you should welcome the market correction (page 82). ernment’s co-contribution, where I can put
From our shares section to property, we thought we’d give you a triple wham- in $1000 after tax and the government will
my: increase the value of your property through some bright renovation ideas contribute $500.
(page 54), map out a property borrowing strategy (page 58) and learn more This is particularly useful to women who
about rent-to-buy schemes (page 62). have cut back work so much that their super
Forget the naysayers. There is nothing we can do about rising interest rates and will suffer in those years, or anyone who is a
inflation, forecast to go up to a heady 7% by the end of the year, but that doesn’t low-income earner.
mean the well of market opportunities has dried up. Far from it. Bianca
On another note, we would like to thank everyone who participated in our read-
ership survey in June. We received more than 2300 responses and we can’t wait
Work to 75? No thanks,
to incorporate your suggestions and ideas into our pages. Stay tuned.
that’s just crazy
Well, the crazy things that you feed people!
Michelle Baltazar,
Working to 75 just to get more super. I’m
Editor-in-chief sure most Australians would be so excited
about that. I’ve absolutely had enough of
this train of thought in Australia. We are
not robots.
Christine
6 MONEY AUGUST 2022
Roger is an inspiration
I loved your podcast with Roger Kinsky. I’ve NN
bought some of his books and found him to OO
OO
be a great inspiration. He’s down to earth, and
TT
his simple explanations make investing a lot

SS
easier for a novice like me.
’’
GG
He also very graciously replied to an email
EE
I sent him a few months ago, which goes to
RR
show you he really does want to educate and

encourage people who are interested. Won-
derful podcast. 10 out of 10!
Rita
(online comment)
See moneymag.com.au/friends-
with-money-podcast-52-starting-
with-shares

A house is not a home
My parents, who’ve been “self employed” all
my life, bought an amazing block of land many
years ago. It was large, had its own little rain-
forest, was close to the beach/waterfall/quaint
shops and not far from a major city. They sold
their old home, built a big new one on the block
while relying on the pension and benefits.
Fast-forward many years and my parents’
property is now extremely valuable and

EE
desirable – but not their relationship, which
BB
broke down. To this day, they bicker about the CCoonnttaacctt uuss HHooww ttoo ggeett MMoonneeyy
II
property they refuse to sell but can’t maintain, RR
TToo sseenndd aa lleetttteerr ttoo tthhee eeddiittoorr,, wwrriittee ttoo:: SSuubbssccrriibbee ttoo tthhee pprriinntt oorr ddiiggiittaall eeddiittiioonn,, aass wweellll
CC
while holding dearly to their pensions, having
MMoonneeyy,, LLeevveell 77,, 5555 CCllaarreennccee SSttrreeeett,, aass oouurr ffrreeee wweeeekkllyy eemmaaiill nneewwsslleetttteerr vviiaa tthhee SS
let go of their family. BB
SSyyddnneeyy NNSSWW 22000000 oorr eemmaaiill
I wonder whether, if they had had more MMoonneeyy wweebbssiittee oorr:: UU
mmoonneeyy@@mmoonneeyymmaagg..ccoomm..aauu
education about selling their property and SS

the pension, they would be happier and most FFoorr aallll iinnqquuiirriieess aanndd lleetttteerrss,, pplleeaassee iinncclluuddee OOnnlliinnee:: mmaaggsshhoopp..ccoomm..aauu//
likely better off in the long run. A house is not nnaammee,, aaddddrreessss aanndd pphhoonnee ddeettaaiillss.. mmoonneeyy--mmaaggaazziinnee
always a home. LLeetttteerrss mmaayy bbee eeddiitteedd ffoorr ccllaarriittyy oorr ssppaaccee..
Val BBeeccaauussee ooff tthhee hhiigghh nnuummbbeerr ooff lleetttteerrss
CCaallll:: 113366 111166
(online comment) rreecceeiivveedd,, nnoo ppeerrssoonnaall rreepplliieess aarree ppoossssiibbllee..
See moneymag.com.au/ask-paul-would-
selling-an-expensive-piece-of-real-estate- MAMYay JJUunNeE JJUuLlyY
affect-my-pension wMSLwOAUYwNP .EG2mR0-oT 2PnE2eOR y WAMmUEa ISgRN .$:cV o8TEm.HS9C.ET5Ra E MuINDA ZTEE IN$NA9TGL . 9 F 5I N IA S @NSCUMDMIAEoOL An2 NFeR5Ry’5KTEM EE GDaTgOE ACMTUR BSAUSRHNT IN THE NEXT 5TWASPA HNWLEXA UAEAR MSLBYET IP HBSPLLO L LTOTAOHYONSRET EO2C UUGTH 0 YOU2R2 0219 wJTDUwHONwENE . m’A2T0Ro P2nTA2e OyY mAF F UaHUgSAL. c$LGo8 GPm.C9RL.Ra5IINECu NA EG TZ I N$G9 . F9 I5 N A I S@NSCMUIAFCEoLRn A 2FeOS5RyEM6HME Da ICNgOOA MOUINNSS C TOOL LCEACRTSIBLES ABOSSOESTT RYWISOCUAUOTHHRNIRR,EP VDM CDRSII NASVEW YX 2 CSE2 XIX2ON OHXAX0R MHXSTP D X EOO0EAS0R ON E R 2192 JwWSUwPLHEYwYC .2m UG0oL2EnA2NeT yT IAmVRUaAESg CB .$cKUo8 YmI.S9.C 5aAR uN E AZT $IN9 G AF. 9 AT F 5 IMO N IA @SICNLSMRYCUAI oAETnC LR2e KFUy5RSM7SE DTEaDgSOOAWMUSN ON SSTHOOCPK A BRAORUGNADI NFSOR 22002192
See page 14 for our podcast of the month
KYONUORW TispsItsuNas rtSrueotpIcu aD ygcmpeoE e6 a8 uis sksr e a Why you
only need
Prize worth winning CREDIT $250kSSTTTSSWWWHHPPEEEOOOEE EEE TT TT
Each month we’ll award one letter a SCORE PROPERTY’S
BIG SHIFT PLUS
12-month subscription to Money magazine. (cid:3) (cid:55)D(cid:76)o(cid:83)n(cid:86)’(cid:3)(cid:73)t(cid:82) b(cid:85)e(cid:3)(cid:111) s(cid:85)c(cid:86)a(cid:87)(cid:16)r(cid:87)e(cid:76)(cid:80)d (cid:72)o(cid:85)f(cid:86) L MI in super to retire
Write to: F9i nwda oysu tt oh ostwa yy ooun rtaotpe of it Shhoouuseld o yro aun b aupya art m e Wnhatt? ‘rightsizers’ want GET PENSION +SUPER
Letters, Money, Level 7, 55 Clarence Street, Sydney, NSW, Recover from a black mark
2000 or email [email protected] NFYFARUONICOTUDOUMR FLR I HAEFR LO-EFPOMIREOLOEDD O F PGBTEAAORUDORL DDI CB EDLLBEIETTB ,DHT EE, BRTOE SHATGHU AOWSEMW AITNE NATN OKHEE ERBOL EIVY NE R TTPMFOORLAARAMKT DI EFNWIO NIVTARGE TME SSATSOSO NYR S V$WAR4EI STIT5LAWIL0R P EPERAERMETLOFEEEOVSRNRIT TDMREA NT ATSAFOHH LPAREEA NAFSS ROCSDERIIEEORMAN NWNEC SREIT H PPPARLUOULP’SESR V TEYR: DBIECATT: TFHREO MST A$M7KP T DOU $T3Y0 S0TKI:N IGS IT TIME TO CASH IN?
MONEY AUGUST 2022 7
OUR EXPERTS
How have the interest
The
Money
rate rises affected you?
team
EDITORIAL CONTRIBUTING
Founder & editorial ARTISTS
adviser Reg Lynch, Michele
Paul Clitheroe Mossop, John
Tiedemann
Editor-in-chief
Michelle Baltazar
PHOTOGRAPHS
[phone]
Getty Images
michelle.baltazar@
PAM WALKLEY JAMIE ANN LOVEDAY TOM WATSON
moneymag.com.au PRE-PRESS
Senior writer WILLIAMSON Art director Senior journalist
Peter Suchecki
Art director As a self-funded retir- Editor, Financial An interest rate hike Not being a home-
Ann Loveday ADVERTISING ee – who also does Standard is the bell ringing, owner, I haven’t been
Designer Director – head of some paid work – ris- At this point, the rate reminding me it’s hit with a mortgage
David Matthews media sales
ing interest rates are rises haven’t had a time to review my rate rise. I am a keen
Stephanie Antonis
Senior sub-editors generally good news financial impact – we borrowing deals. saver, though, so
[phone]
Bob Christensen,
for me. For example, were fortunate to Time to have a chat it’s disappointing
stephanie.antonis@
Debra Duncan
rainmaker.com.au I have some money lock in a very low with my friends at to report that my
Senior writers
invested with Plenti, fixed rate of 1.89% in St.George bank and savings account has
Susan Hely, Pam Walkley Partnerships manager
an online lender, and early 2021. But the see if they will barely been impacted
Sam Starrat
Senior journalist
when I reinvested increases are causing reward my loyalty by the recent inter-
[phone]
Tom Watson
sam.starrat@rainmaker. some of my funds some anxiety as we with a better deal. est rate increases.
Digital editor
com.au earlier this week, I need to refinance in Perhaps it’s time to So far, my bank has
Sharyn McCowen
got a rate of 4.6% for April 2023 and have switch from variable only upped my rate
MARKETING
CONTRIBUTING five-year lending. As a wedding to pay for to fixed. Still seems by 0.50%, meaning
Marketing manager
WRITERS Julian Clarkstone a mum, though, I before that, so we cheap, though, as it’s now well behind
James Carlisle, Mark
julian.clarkstone@ worry about my kids’ will definitely be the interest rate on the leading accounts
Chapman, Alan Deans,
rainmaker.com.au ability to service their working closely with my first home loan, on the market. Safe
Peter Dockrill, Tracie
mortgages if interest our broker to ensure in the ’80s, crept up to say that it might
Ellis, Peter Forrestal, MANAGEMENT
Steve Johnson, Anthony Managing director rates go anywhere we get the best to a whopping 18%. soon become a for-
O’Brien, Marcus Padley, Christopher Page near the 17% I paid in rate possible. At least lettuce was mer bank as I look
Vita Palestrant, Scott Executive director the late ’80s. an inexpensive com- for more generous
Phillips, Max Riaz, Alex Dunnin modity then. rates elsewhere.
Annette Sampson, Phil
Slade, Rasti Vaibhav, Syndication enquiries:
Graham Witcomb money@ Follow Money Visit Money online
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or omissions from, the information provided in Money maga- disclose your personal information offshore to its owners, viding special prizes or offers that are part of the Reader Offer. Ltd, Level 7, 55 Clarence Street, Sydney NSW 2000.
8 MONEY JULY 2022

MY MONEY, MY LIFE
CEO of my own destiny
By taking charge of her
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Money reader Susan Miles
can sail through the good
times and bad
I
come from a simple working-class back-
ground, but with the benefit of two very
savvy role models in my parents. Dad
was an early adopter into super before it was
compulsory, and I saw what senior years
could be like when money was not a stress,
compared to relatives who got poorer and
more stressed about money as they aged.
I also saw what good decisions and age my share portfolio with a combination nation of income: profit, dividends and
good advice combined can do – my dear of margin lending and investment loans franking credits
mum turned her modest net worth into a against my home. I’ve spent as well as I’ve invested – life is
substantial sum after dad’s passing, which I started small and built my portfolio and to be lived! I’ve had some amazing inter-
would have made him chuffed. As he would lending progressively over the decades. national adventures, hiking and camping
have said, “That’s the way …” It has had its hair-raising moments, but when I was in my 20s and 30s. I still love
So, superannuation has always been a never a margin call. As I’m a Melbourne the hikes, but now a nice hotel at the end of
focus, starting by putting in a little extra in girl, where property is king, I simply say day is a must. If I’m visiting a beautiful city
my 30s and maxing the pre-tax limit once my portfolio is equivalent to three or four – San Francisco, Paris and London are just
my mortgage was paid. apartments and leave it that! a few of my favourites – I like to be right at
I don’t know what my own senior years its heart so I can walk to galleries, muse-
Less cash, more income
will look like, but I know I don’t want to be ums and the theatre.
worrying about money. Money in itself has not been my goal, but After Melbourne’s six lockdowns, I’m
With a medical diagnosis of anxiety and rather security and certainty. As a share looking forward to getting my passport out
depression in my 40s (I have probably had it investor of multiple decades, I’ve experi- and well stamped. But in the interim, I’ve
since childhood), I value my private health enced the tech bubbles, the fintech hype, become an expert at the staycation, relishing
insurance and appreciate the Medicare-sup- the GFC, various “corrections” and interest the enjoyment of spending on my own city’s
ported mental healthcare plan that gives me rate highs and lows. I’ve taken advantage array of theatre, arts and exhibitions, and
access to regular psychology appointments of the good times, made a profit or two then collapsing into a nice five-star hotel.
with only a modest gap payment. (thank you, Afterpay!), but always with the I never saw money or finances as boring,
While my income protection has exclud- appreciation that the good or bad times quite the opposite. I’ve enjoyed learning
ed every possible mental health diagnosis, don’t last forever. and developing my financial savvy. Now,
I’m comfortable with that. As my doctors Perhaps my approach to risk is colour- as the CEO of my own destiny, whether it’s
remind me, my proactive care and treat- ed by my career as a contractor. I have a medical appointment, theatre tickets or
ment mitigates the risk of these illnesses no job certainty, but this makes me more an adventure, I genuinely don’t have to ask
being the thing that stops me working. In conscientious of adapting and growing my myself, “Can I afford this?”
turn, I feel secure knowing I am covered skills to meet the changing market. I see no
should an unexpected illness or injury put certainty in a permanent job – redundancy If you would like your contribution to be
me temporarily out of action. could be tomorrow. considered for My Money, My Life, email
I also realised that superannuation and So, in investing, I see no certainty in [email protected] or write to
a home were not enough, so I opened an holding too much cash. I’d rather be adapt- Money, Level 7, 55 Clarence Street, Sydney
online brokerage account in my late 20s. ing and growing my portfolio of varied NSW 2000. Please submit no more than
Being a slightly impatient person, I lever- shares to ensure I am receiving a combi- 700 words.
10 MONEY AUGUST 2022