610 | Livevesting: Could Buying a Better Home Be Smarter Than Another Investment Property? - Chat with Stuart Wemyss

Introduction Now the rules of the game has changed. Speaker 2 Particularly with the way that the Melbourne market is, should we be taking advantage of the current slump and maybe purchasing that higher quality asset? Speaker 3 I think it's probably one of the common mistakes people commit with with live investing investing. Speaker 4 You're tuning in to The Property Couch, Australia's number one property finance and money podcast featuring the Titans of the industry since 2015. We're trusted by 10s of thousands of investors on their journey to financial peace. This show is powered by more. Speaker 1 Thanks, Opti. And yes, we have a magical show again today for you. We have a very, very special guest who I'll introduce you to in a minute. Obviously, I'll also have Luke Oxenham, who's one of our couch crew. Welcome back, mate. And I'm going to hold on introducing our special guests for a moment. I want to get through a little bit of housekeeping first. Number one, our case studies from our latest book. We have updated those seven case studies and added a bonus case study. So if you want to join the white list to get access to those updated case studies, post the changes to negative gearing, the capital gains tax, all you need to do is go to thepropertycouch.com dot AU forward slash case study and you can join that waste list that will be out really soon. We also have a couple of other important announcements. The PIPA, so the property investment professionals of Australia do an annual survey. It's up I think to the 12th year and it's the annual investor sentiment survey. There is a link in the show notes. We've talked about it every year because when I was the, the, the chair of that association, I instigated this survey and it's the annual survey. We we where we attempt to get over 1000 property investors insights into what's happening in the market and there is obviously been an enormous amount of change. So there's a special section in there in terms of the reactions and and the intended behaviors that we want to see in terms of helping us prosecute a case in terms of whether this is a good attack on asset wealth or aspiration in this country. So that's an important one. So please, I know it's going to take about 20 minutes to fill it in, but it's vital data. So please take a moment to do that because with that data, we can prosecute a case to potentially get it repeated. And we're going to talk about that with our special guest in a minute. And then finally next week is our mid year property market outlook. Stuart Weems Returns 3 Well, the market you know, talk about coming into winter, it is a very challenging market out there at the moment. So I've got a very special guest joining me next week, someone who might be familiar to you who might be also joining. So you may have worked that out. But anyway that's on next week's show. Anyway, today's show is all about unpacking a couple of important things that have been happening around the market post the tax changes and I have brought back Stuart Williams. Welcome back mate. Speaker 3 Thank you. Thanks for having me. I'm glad I've got the shirt and jumper uniform going. Speaker 1 It's going very good thing you got the text Now, just a little background. If you don't know who Stuart Williams are, well, I don't know where you've been living. You may be living under a rock. He is the founder of Pro Solutions Private Office. He's also the author of Rules of the Lending Game, Investopoly, and his latest book, which we're going to be talking about today is Wealth by Design. So we'll be talking about that later in the show. And obviously he's become one of Australia's leading commentators when it comes to all things around investing and wealth building. We had him on episode 81, we had him on episode 172 where we talked about the five rules of mastering, building out wealth. And then episode 2000, I'm sorry 2, 212200 and 12 in 29 and where we talked post royal Commission and we actually talked about labour and negative gear. Ohh. Speaker 3 Right. OK, there you go. Speaker 1 We we're getting back to that area. So Stu, obviously the first question to you mate is what's, what's, what are, what are being some of the questions you've been getting from your clients and also from obviously people who follow you on your very successful podcast investopoly. What Investors Are Asking Right Now 4 What, what have you been sort of fielding those questions around? Speaker 3 Well, I mean, people just just want to know what, how does it change their strategy? How does it change their approach? And should it change their approach and to what extent, you know, what timing do they need to to change? So, I mean, there's a lot of questions out there. Of course, you know, the tax settings have been around for a long time and anyone that starts educating themselves in property understands the benefits of negative gearing and compounding capital growth and holding on to a growth asset longer term. So, you know, we've been hammered with these themes for many decades and now they're the, the landscape's changed. So of course people are now thinking does it change and and how should I accommodate it? Speaker 1 And so off the back of that, are they thinking around some of those behavioral things? Are they asking more questions about upgrading the family home as opposed to classical investing? Because obviously, you know, we got to meet over 10 years ago, maybe 15 years ago, where you were riding for one of the property magazines and we were obviously, you know, debating around the different types of asset selection that you and I locked, which was the fundamental ones, the investment grade stuff. And of course, you've evolved in terms of not only doing property, but also more broader wealth. And you've also evolved in to helping, you know, sort of high net worth individuals or, or business owners. So to build out the, you know, their mastery of wealth creation and frameworks around that. So, you know, what are some of the the questions you've been fielding from, you know from them around, you know, what should they do? Speaker 3 Yeah, and I guess I'm in the the starting point to some extent. And it sounds kind of crazy to say on this podcast, but you know, property's not the only game in town. Yes. So you know, we should sort of start from that context to understand that, you know, that the attraction to property, there's a fundamental attraction to property which we will talk about. And that could be from an asset class perspective, it could be from a personal comfort perspective, but also property decisions and decisions, you know, on how I buy my home, intrinsically interlinked with wealth creation, which I don't think accountants and traditional financial planners really understand well enough. You know, it's, it's a goals based approach really. I mean, OK, yes, we want to have a comfortable enjoyment, enjoyable retirement, but also we need to enjoy life along the way, which means living in an area that serves us, you know, a location where it's close to amenities and family and schools and these sorts of things, right. So I think that I think that's always been there in terms of really making sure that we take a holistic view and understanding that a property strategy, a property investment strategy can one of its big components can be helping lifestyle goals like buying a home, you know, whether it's upgrading a home or getting into the home market, whatever it might. Why Live Vesting Matters More Than Ever Be and that's one of those things that's I'm currently going through at the moment. So you know that live vesting that you talk about is really something that kind of hit home when I started doing my research for this episode, so. Speaker 1 And and so let's let's jump to that and we'll come back to property investing. Sure. So the principal place of residence now is a tax haven in in some respects. And so there is a there's debate certainly in terms of work that Luke and and our team are doing. The stuff that's surfacing itself is obviously the grandfathering and negative gearing has then people might be in their forever home, but their dream home now might be a possibility. And so we're we're, you know, we're seeing conversations around interest only lending to preserve some of that higher debt levels if we want to turn our current home into an investment property. And then of course, if we are going to upgrade, the value of those offset accounts is also quite critical as part of that story. Speaker 3 Yeah. And I think it goes to building a long term strategy, Yeah, you know, and having a long term aim. So what is it? OK, we own this home now. We know our forever home is in this location, this value, and we also know that we want to, you know, flexibility to reduce working hours at in our mid 50s or retiring 4 by 60, whatever it might be. But you want those broad goals and it, it starts there and it's always sort of started there. And we've got to have a firm understanding of then how do we use property to help us achieve those goals? How do we use super, How do we use the share market? But certainly the two things that have come out of the changes, the 2, the two opportunities that look most attractive from a taxation perspective is the family home. And yeah, and super super's been relatively untouched as well. Speaker 2 I'm seeing a a pretty big sort of shift over to that particular that upgrade sort of space, which is timely for me because I'm trying to do the same thing so. Speaker 1 Yeah, I think it's going to happen. But, but I think it's also let's let's dig a little deeper into some of the, the modelling you've done. Is Property Investing Still Worth It? 6 So just obviously on this podcast, yes, we've always been proactive in terms of a couple of properties in concert with super. And now that the Super guarantee is 12%, if you've got 2030 or so years, that in itself is going to build up a significant nest egg. So one or two supplementary properties is part of that story. And that's what we wanted to dig in a little around today, because the reality is, is that investment grade property with gearing is still a viable option in terms of residential. But you've, you've also, you know, with these changes, right? It does challenge some of that thinking. So take us through some of the work you've done around the internal rates of return and and what you've observed in regards to those tax changes, the genuine headwinds that might be in play. Speaker 3 Yes, I mean there's obviously two sides to to the coin here. Are you it with, and we've sort of break it down to fundamentals is I go and buy a property, a borrower to buy a property. I don't put any of my own capital into it because I'm borrowing 100% typically. And so the only capital I need to contribute is towards it's holding costs. Yeah. So that's what I'm contributing. Now. What am I receiving? I'm receiving capital growth in the in the long run, we hope the property might double every 10 to 12 years. I hold it for, you know, 30 years. The Negative Gearing Reality Check 7 I sell it for six times what I pay for it. That's done all the heavy lifting and you know, I'm off to the races. The problem with negative or the quarantining of negative gearing is that now I've got to previously I, I obtained a tax deduction, yes. And if I was entitled to that tax deduction, I was on the second highest marginal rate, 39% of that outflow was being paid essentially by the federal government. If that's quarantined and I don't get to use that say 10 years down the track, then that's equivalent of $0.21. Or if it's 15 years down the track, which is probably more likely, it's about $0.15, right? So it really dramatically reduces the the benefit of negative gearing. But the problem is I don't get more capital growth in return just because my property, I don't get a tax section for the property. Of course, I don't get that capital growth in return. So that's what pulls the mathematically the return equation, you know, out of my favour. And I worked out about an after tax internal rate of return reduced to about 11% to about 8 1/2%. So it's a significant reduction, 8 1/2% after tax still isn't bad. It's not a terrible outcome, yeah, but of course it's not as good as 11%. The the two elements that we can then play with are are rental yield and capital growth. Obviously rental yield and particularly our starting our purchasing rental yield is so important because it dictates the cash flow of the property over the holding period pretty much as long as rentals don't go backwards. Of course. Now of course the big variable, one of the big variables of interest rates over time. So that's going to go up and down, we know that. But if we look at a sort of a long term average, so I think structurally in some parts of Australia rental yields are historically very attractive. And if we think that you know, what is the implications of the removal of negative gearing, does it push rents higher on a on a both a percentage and and actual dollar? Speaker 1 Value dollar value, yeah. Speaker 3 I think most of us agree, yes, there's going to be to what extent, no one really knows, but there's going to be upward pressure. Speaker 1 Yeah, agreed. Speaker 3 And then the, the next element then is capital growth. So how do I and I'll sort of I spoke about this in Wealth by Design as well in terms of really understanding property cycles and something that I didn't really cover in investopoly the previous book. So if you can then buy into a market that might benefit from some main reversion at a time when rental yields are quite elevated, then it sort of certainly helps that internal rate of return calculation because yes, I'm not getting negative gearing, but I'm getting a much higher rental yield. So that's going to mean the holding costs are a little bit lower. Hopefully interest rates are on the way down over the next couple of years. Yeah, look, that's temporary. Interest rates are going to change, but but my holding costs will maybe get better like in terms of more affordable. And then if I'm buying into a market that's sort of prime for some growth, then at least in the 1st 10 years, I'm going to get above average capital growth in. And that's important because my property is probably going to cost me the most in the 1st 10 years. Of course, as we know, yeah, rents rise and inflation eats away at at the loan repayments really in, in real terms. Is Melbourne Australia's Biggest Opportunity? 8 So you know that first ten years is, is really difficult. So I've done some work on particularly Melbourne, yes, and looked at the sort of log linear relationship over sort of 45 years of data. And that's a lot of words. But essentially what I've tried to do is say if we believe that property grows on average 6 to 7% per annum. Speaker 1 Over a very long period of time, historically, that's. Speaker 3 Been the that's been in time and my view would be, yes, in the early 80s maybe 7% was a reasonable average. I think it's coming down. And so in my analysis, I've said starting point is 7 is, is normal growth today at 6:00. And then what we try and do is work out what should the meeting house price, what should the meeting apartment price be in Melbourne given those growth rates? Yes. And those numbers tell us that the meeting house price should be 20% higher than what it is today. The meeting apartment price should be 30% higher. That's not saying that houses are undervalued by 20% or apartments by 30%. It's just saying if growth was normal, that's where they would be. And The thing is that if we have a look over history, you know, going back 1013 years ago, the Melbourne market just finished a 20 year growth cycle. So a lot of people are saying what's happened to Melbourne? There's been no growth. It's a basket case, you know, relative to the other capital cities, yes. And look, we we talk about the Victorian government there. It's a bit of a basket. I'm not defending that. But a big contribution to the underperformance more recently is a 20 year growth cycle, which is it hasn't happened in any other market. Speaker 2 Yeah. And I had a few questions around, well, particularly again, because I'm looking for that in that Melbourne market. But also, I just wanted to touch back a little bit around the, the live the live vesting piece around there because I think that ties in a little bit for what I'm seeing when I'm out there every weekend trying to look for property. Should You Upgrade Your Home Instead? 9 So just to give you a quick little bit of back story. So my wife and I, we have an apartment at the moment we're looking to upgrade. We were previously trying to work out if we want to try and keep some of our borrowing capacity to kind of then sort of move into investing because obviously I work with Ben every day. So, but we're now thinking potentially particularly the way that the Melbourne market is, should we be taking advantage of the current slump and maybe purchasing that higher quality asset, maybe not stretching ourselves, but maybe just kind of pushing a little bit to try and get in there. So my thought was, OK, well, are we better looking for something that's potentially going to be good enough for us for the next say five years? Or should we be thinking maybe longer term for purchasing something for that longer hold? Speaker 3 Yeah, I think, and I'll talk about it in the book as well, Quality first, then price, then diversification is third in terms of building out a strategy and asset allocation. And that applies whether we're building up a property portfolio or both a share and property portfolio, whatever you're looking at, whatever asset classes, obviously quality is fundamental. You talk about it a lot on this show, but price the it's not quality at any price, it's quality at a good price, at an interactive price because capital growth is going to be driven potentially by two contributions. Firstly, the underlying asset of the value is improving, which is fundamentally what's quality is driving. And then it's asset repricing. So if I'm buying a really good quality asset for a cheap price, if I can go and buy some CBA shares for 50 bucks, yeah, yeah. You know, it's it's it's it's a no brainer, right? My returns over the next 10 years are going to be great because my entry price is good, but also it's a quality stock. So I bought well, same, same with property. And then diversification is third. So I would rather put all my money in a high quality asset and buy that asset for an attractive price and be all in and have all my eggs in one basket. Then just notionally diversify. And we see it all the time in property. People go and I've got a $2 million budget and they go and buy 4 properties. You know I. Speaker 2 Mean that was actually my next question as well because my concern was thinking about like concentration risk, right? The Most Common Live Vesting Mistake 10 So using all of my capacity for the one asset as opposed to trying to keep options on the table. Yep. Speaker 3 It's, you know, I think it's probably one of the common mistakes people commit with, with live investing, livesting. People tend to think like I'm buying a home and yes, we don't buy a home predominantly to build wealth, although it can accidentally become many Australians 50. Speaker 1 5% of all household wealth in this country. So yeah, it it's a, it's a meaningful thing. Speaker 3 Yeah. So I think we can take an investment lens towards that decision. Yep. And so it's, I think it's erroneous quite often to approach it and say, well, I, I need to minimise how much I'm spending on my home because it's a personal use asset. Yeah, to do live vesting properly or well or, or to, you know, to to the greatest effect, you've got to be all in. And so really it's about, you know, if I've got an existing asset that's going to have quarantine negative gearing like you Luke, the the temptation is to hang on to it. And that's, and if you can, that's fantastic. Course you should. Yep. But quite often we have these conversations where we've got these existing assets, they're good assets, but the whole point of buying that asset was to help you to get to the next step, right. So sometimes you've just got to go, well, I've got to sell everything. I'm going to put all my borrowing capacity towards buying this one asset. So quite often we counsel clients about, you know, they come to us and say, OK, I want to do live vesting. I've set a budget of 1 1/2. OK, that's great. But could you go to 1/8? And I'm not saying just more is always better. Yeah, it's not always appropriate, right? But if it gets us into a better price point, a better asset, an asset that's going to last longer than five years, an asset that has more land that we can then improve the dwelling later on, that's going to serve them much better. Then trying to, you know, play at the the fringes and minimize the budget a little bit, but then sort of only get 80% of the strategy impact. Speaker 2 And that's, that's exactly what I'm going through at the moment between do we buy something that's kind of, you know, well within budget that would be comfortable or whether it's a case of, OK, well, we should be buying that asset. That's, you know, both in the the right area. But you know, this one has potential for us to say when we do build a family and expand and renovate and everything from there. But it's just that next bracket. Speaker 1 Yes, success leaves clues, right? I mean, if you think about some of the most sage advice from Warren Buffett as a value investor was, you know, I look for value, but when I'm looking for value, I'm looking for quality. And I want to, I want to own these businesses for decades, not necessarily just for the short term. So he's very patient, which comes back to your point. I mean, obviously prior to the negative gear and capital gains tax changes, we were very steadfast in regards to buy whenever you can afford to buy and hold for the long term And and the cyclical nature, we were like, we can look through that. Yep. Because ultimately now again, strong convictions for that, for, for the rules of the game, then now the rules of the game has changed and now we've got a, a different set of rules, which brings you to your point to you, which is around this whole idea that the cycle timing now becomes even more important, right. Why Timing Matters Again 11 You know, we've always said if you own a property in Sydney or if you own a property in Melbourne, you've, you've got an insurance policy. Like in terms of being in an agglomeration economy and ultimately places where people want to live, higher income happens from there, greater scarcity, greater wealth transfer. All of those things bode well for future long term scarcity and land value as part of that. But now to the point you you've you've made an enhancement in your book around this whole concept of looking at timing of the market as opposed to time in the market. Speaker 3 Yeah. And it's, it's, it's really value aware asset allocation as I've described in in the book. So you know, I, I don't want to get to I mean the entry and exit cost with property is substantial. You don't have that same situation in the share market. So it's still very much is a long term play and also the the mathematics around compounding capital growth and holding an asset for 30 years versus 10 years haven't changed either. But it's really a question if, if I'm putting more capital into a market at the time I need to find the best place for that capital, where are the best returns. So if I buy Melbourne today because I think in intrinsically undervalued on a on a absolute basis and relative basis, which I do, that's great. But that doesn't necessarily mean I sell Melbourne in 10 years time if there's a growth cycle, right, the compounding capital growth still works. What helps me is that I get higher than average capital growth in the initial period of ownership when my cash flow is the worst. And that's going to help the asset allocation, that's going to help the internal rate of return. That's actually going to help me build wealth in actual dollars. And it's, it's good to look at the internal rate of return, but you've got to also look at the dollars because that's how we're funding wealth, of course. Should You Cash Out Or Hold? 12 That's how we're funding retirement. Give me a 5 or a 5 1/2 percent on $2,000,000, yes, as opposed to a, you know, A7 or an 8% on $2500. You know, it's just not going to, it's just not going to be the same. What's also interesting, Stuart, that we've also to observe a little bit of is a lot of our clients who have bought in Perth or in Queensland in the last six or seven years have done incredibly well, right. Obviously the ones who we bought in Melbourne for are patiently waiting. And you know, we've, we've, we've said, you know, like at the end of the day, we didn't think the economic activity in the government would be that that prone to stuffing the economy down here. And we think that that will improve over time. But they're now debating, they're having household debates, gets around cashing in and then I'm going to be debt free on the principal place of residence. And it's, you know, so it's this debate that's going on right now between the bird in the hand now and sort of taking that money and sort of feeling safe about that and maybe fast forwarding some of our goals and activities like, you know, travel with the kids or whatever it might be. But they're still forgetting about the, you know, what did we start this journey in the 1st place? I mean, ultimately this is only one cycle, people, you know, there's two or three other cycles, so. Speaker 2 I was just going to say it can be like very powerful. I think that thought process of having your own arc with no debt against it. Oh. Speaker 1 It's incredibly, I mean it, it feels very and that's why some people do it, right. It's they move away from the delayed gratification because it's like I'm going to bank my gains. I'm going to put it in here, Stu, when you when you are talking to clients like that, I mean it's always case by case, but what's your general view when people start to lower the lens and just think about the here and now versus what's what's going to happen over the decades? Think Decades, Not Days 13 I don't want to beat you to death with it, but rule #1 in the book is think decades not days. So it's always, I mean, the best thing we can always do is ask ourselves in 20 or 30 years time, what will I look back and say what was the best decision I made in 2026, right. And how many times have we all heard clients say, I used to own a property in that street, I sold it 20 years ago or 10 years ago, whatever it is, that property would be worth X today. You hear it all the time. Now that's not that doesn't necessarily mean as I said, never sell anything. Sometimes you need to as a stepping stone. But the way I would look at it is if I'm selling, what am I doing with that equity and is, is that compelling? So if to loot situation, if he's got an apartment and he's selling that and taking that equity and putting in a better quality asset a house somewhere that's and he's buying that attractively that that can have merit, yes. But if it's really just I've made some good gains, you know, let's take them out, let's run. Speaker 1 It's the simplest decision, I mean. Speaker 2 Trying to hold it for the sake of negative gearing for the. Speaker 1 Well, I mean there's negative. Speaker 2 Gearing helps right? But if it's the difference between getting the home for my family or having an investment property but then having a similar kind of step sideways, then I think. Speaker 1 Yeah. Well, but, but again, it's that, it's that simple notion of it's an easy decision to make because it's a known quantity. The, the future is an unknown quantity for me. And so, and I and I, I don't play in this space like you guys do. And so we're sitting down, a husband and wife sitting there going, there's just, you know, 3 or $400,000. Maybe we've got to pay 100,000 in tax or whatever. But like that's, that's real money and that's going to make a difference in in how we live our lives today without looking in the decades in the future. So we would we would remind people if you are having that debate is go back to your professional advisor who can just be that guide and that level head in that conversation. Because we all agree that if it is about OK, well, what are we going to do with that money? Are we going to, we're going to land that into something that is upgrading the asset into a better, you know, and we're going to create better memories. But if we're going to crystallize that gain and then spend that on discretionary and, and experiences just now, just be mindful of, of what that trade off can look like because it makes it, it kills the momentum into the story of what you're trying to build out. So, so we, we, we just sort of say please, we understand it. It feels good. And it feels like, you know, you, you're locked away some. But I don't think necessarily that's going to be, you know, to, to Stuart's point before it's like if I look back in the decades, it's not necessarily going to play itself out. Speaker 3 And tax changes, right? We, we could probably talk about it a little bit later, like, OK, we've got these tax settings today. Yeah. And nothing tells us they're going to be set in stone. We had GST introduced in 2000. A lot of people, I shouldn't even mention these things that just may point out how old I am. But you know that we that was issues in 2000 like these these things to happen, lots of taxation changes, different governments, different policies, different risks, wars, different interest rate cycles. Probably seen it all before. Like, yes, we've had a growth cycle in Adelaide and Brisbane and Perth and maybe they'll have a flatter cycle, who knows. Coming up probability that is the case. But we also know that you've got a hold for multiple cycles to really get that companion capital growth. That's the, that's the evidence. That's the evidence. You can't argue with the evidence. Speaker 1 Now Speaking of evidence, so obviously you know, we've got strongly held convictions until the rules change and and the rules have changed new versus established. New vs Established Property 14 You've had time now to digest what that looks like. What sort of views are you forming around the new versus established side of the market? Does new move you into a different thought process and execution or are you still sitting back saying now not take me back to the fundamentals? Speaker 3 It's quality first, quality first, then price, then diversification as I mentioned, so it falls over on the quality front. I'm buying a property probably where land is abundant rather than scarce. I'm buying asset that doesn't have proven performance, doesn't have runs on the board. It's selling for the first time, so I don't really know what it's really worth until it transacts in the secondary market. The tax benefits are unique to the first owner, which is not ideal because to what extent will they be capitalized in the price? And then when I go and sell that asset course, the next buyer is not going to get negative gearing. So I don't really want to prepay for that. So I, I definitely steer clear of a new build. I mean, if you can't get yourself or if your strategy doesn't suit investing in established property, then look broader beyond the, the asset classes. Don't Chase Tax Benefits 15 You know, there's always other things to invest in and to do with your money. The, the worst thing you can do is, you know, just try and chase tax benefits. And that's true. I mean, I remember doing talking about that at seminars 20 years ago, yeah. Speaker 1 Yeah, yeah, yeah. Speaker 3 You know, because a lot of people used to bang on about negative gears and all. Speaker 1 These interest capitalization and. Speaker 3 All these sorts of things and you know, never buy or never enter into an investment strategy or buy an investment primarily because of tax benefits. You've got to buy it because it's going to build you wealth. You know it's. Speaker 2 Particularly of construction as well, like you know, it's just mortgage broker brain. We're thinking about like you've got foreign capacity getting harder, you've got the cost of construction getting more expensive. And it's very, very common for clients to suddenly need more money as the bank's telling them every six weeks that that's decreasing. So it's just not something that I would personally be like I want to get in there and look to do construction not even not even thinking about the the tax implications on the side. Speaker 1 We've we've formed a view that that if you can find a new build in an established area, so whether that's the inner, you know, sort of very, very nice high scarcity or the middle ring, then it's worth considering. But the the price to play Yep, we're you know, we're studying that deeply in respect of how much premium if they put on the new build. So all of a sudden you're actually you've just paid your, or you paid a price that's actually just going to give you your cash flow refund. And so all of a sudden, it's like, well, all you've done is really, you know, you paid a too much of A premium and ultimately you don't have that land value that's going to deliver you that ultimate return. Speaker 3 And new builds in established areas tend to be not always, but tend to be in impaired locations. Busy main road. Yes, just because the land, the land cost is more economical for the developer rather than in a quiet, you know, quite nice street. So but but theoretically it could work in a established. Speaker 1 We're keeping an eye on it and certainly from a buyers agency point of view, if we can find where we're getting fair price on the new build. So we can analyse that because obviously it's very easy to analyse the cost per square meter of dirt. So we're just obviously looking at that overlay and and we're looking at sort of getting, you know, independent assessment in terms of how much of A premium is being charged by the developer. Because obviously it's usually going to be 1 into two or one in three. Like we don't we don't want to play if it's seventeen of the same townhouse. Yeah, there's no there's no local scarcity in in respect of that. So that's going to be an. Speaker 3 Interesting. And a big, a big issue will be for investors to extrapolate previous growth, you know, because we've got to understand that certainly during that from the start of COVID to today, building costs have increased substantially, substantially. We normally they increase 4 to 5% over the long run. So that and that'll be imputed into prices. So it's going to be easy for people or for agents to sell new build to say look this townhouse would have sold for 500,006 years ago and today it's selling for 900. Look at the growth now that yes for that. So whoever bought that in five years ago, great. But a lot of that is being cost. Speaker 1 That's right. I mean, I mean, there's two ways in which you can technically value, you know, the property. It's obviously the land plus the replacement cost, which is the classic way we do it in Rezi. Or it's, it's a premium that's being paid for the privilege to access that land and that location and the amenity around their own. That's what that's what we call investment grade, you know, land and investment grade locations. As part of that particular story. I do want to double click, you know, we've got a, a unique situation is due, you're obviously a tax advisor. So you're qualified in tax, you're qualified as financial planner and also mortgage broking and the like. And so you sit in this area where you're looking at structures. So obviously we can buy in our individual names, we can buy in companies, unit trusts, self managed, Superfund. So we're seeing a lot of change in that area. Structuring Under The New Rules 16 What are some of the areas that you're thinking about when it comes to outside of the the the individual or let's now let's start with the individual, Let's start with the the individual and couples. How are you thinking about how they may be able to structure their their borrowings to accommodate for what you're referring to before, which is the carried forward loss and all the quarantine of those which is the cash flow he. Speaker 3 Isn't. Yes, Yeah, it is. Look, the first thing we thought about was are there any ownership structures that we could utilize to sort of navigate some of these tax changes? And the conclusion we reach is no, we, we felt that would be too aggressive. And, and if people started to do it, they'd shut it down anyway. They'd just changed the the laws. So I think, you know, sometimes you get these very creative propositions or sales be often. Yeah, I'd just be yeah, really cautious about that and get a second opinion. If someone came to you and said I'll buy in a company because you're gonna get the negative gearing, I'd just. Speaker 1 Be very cautious. I think that is gonna surface. I think there's gonna be on social media. We're already seeing it now. Speaker 2 We saw that with borrowing capacity for yes, yes, trust lending over the last few years. Exactly right, yeah. Speaker 1 So we're going to see, we're going to see an increase amount of spruikers, let's call them that. Yep. Who we're going to talk about in the accountants letter, we ought to give you access to that through a company structure. They're going to be claiming that I will be able to claim the the negative gearing against the borrowings that I give to the company. Yep, and the companies receiving the dividend money coming through to the individuals, the owners, the shareholders of the company. And so that's one strategy that we'll see play out. And I reckon over the next sort of three to six months, we'll see whether it's got legs. But to the point, what's the dominant purpose test? Does it, you know, does it meet the part 4A, you know, tax avoidance laws in there? So that's just something that we'll just put out there as a, as a warning for everyone. We, you know, we're running the ruler over. We've got our, you know, chief tax advisor and Julie Hartman looking, looking at that at the moment and we think maybe for certain cases, but not mainstream, you know, this is what happened in the heart case where interest capitalization, it was promoted as a tax scheme. And so if anyone's promoting it as a tax scheme, then ultimately to your point, it's going to be scrutinized and potentially changed. So let's go back to the individuals then, Stu, like unit trust, No, any type of and obviously self managed superfunds. We're now starting to see that also play itself. We're seeing some creative thinking around self management funds in terms of setting up a unit trust and lending money to the unit trust from the Super. And but please, again, be careful. It's you know, some of that is highly sophisticated and again, it shouldn't be done for tax purposes only. So we'll see a couple of those things. So let's circle back to the mum and dad investor and let's you know the aspiring Australian and see how we might be able to contemplate the possibility of of structuring for them. Speaker 3 So let's use some sort of broad numbers that won't be perfectly correct, but just like. Speaker 1 Very broad illustration purpose. This is not advice. Speaker 3 So let's say you got an investment property. It produces $20,000 a year after expenses, net rental income, after property management, insurance, these sorts of things. The loan costs you $50,000 a year in interest. So there's a $30,000 sort of cost or negative gearing. Yeah, previously you might have been able to review on the second highest or, you know, not in the highest marginal tax rate. You might have got a $10,000 negative gearing benefits. So really then the property cost you $20,000. But we know now that that negative gearing benefit is quarantine carried forward, you'll get a benefit but sometime in the future. A Smarter Cash Flow Strategy So one way that we can look for a cash flow strategy is say, OK, well we'll pay the $20,000 from our cash flow because that's what we're always going to do. But we'll borrow the $10,000. And the rationale behind that is I just want to match my cash flow with my tax deduction. You know, I'm not getting a tax deduction today. I'll get it in 10 or 15 years time when the property starts turning positive or I sell it and then that's when I'll repay the loan. And you might not use that strategy, you know, forever, like for the whole ownership period, but it might get you through that. I mean, the, the, the most difficult time to hold a property typically is the first few years, right? You've got some maintenance requests because you've got some new tenants in there. You know, the, the market might not perf move perfectly straight lines. So the first couple of years you might not see much growth. So you're paying a lot of cash flow and getting nothing in return. It's really challenging, but one way we can get our way through that is maybe by capitalizing or borrowing some of those holding costs. I'm not saying that's a way to make it more affordable, you know, because. Speaker 1 You're going to be paying. Yep. Speaker 3 Yep, don't be more interested. I think you'd want to be in a situation. If I absolutely had to, I could still pay the $30,000 but you might use it as a way of keeping more optionality. So this is only going to cost me $20,000 my cash flow, so I can still make additional super contributions, extra home loan repayments, you know that I don't have. I'm minimizing the opportunity cost associated with not getting the immediate negative gearing. Speaker 2 Better that first year or so, like that's the biggest that line's ever going to be run. So, and I think, you know, thinking back at my own personal case as well, where having that buffer upfront I think is really, really critical because it's much better to have it, have it sit there and then help your cash flow than it is to then have to go back to the bank and ask, hey, can we have some more, which sometimes might not be a case if you know, using a guarantor or you know, we've already used the LMI that's on there as well. Well. Speaker 1 We used to model these, you know, years ago, we always used to put a buffer in, you know, for those types of situations especially, you know, if you've, you're a young couple, you bought your first time, it's appreciated by $80,000 or whatever. Now these days, if it's appreciated by 150 or so, $1000. We would get that buffer out because we know that, you know, we might be going down to 1 income whilst we start our family. So we just wanted to carry that. Now again, we would spend a lot of time in that modeling and coaching the clients to understand that this is not your money. You can't use this for, you know, for personal use. It's just there as a buffer, an emergency. But in this particular case, what you're saying, Stewart is yes, we'll we'll basically buffering. So we can do let's say we do the first five years, right. So we're sort of saying here's the shortfall. So that shortfall over that first five years might equate to say $55,000. Yep. And then we're so we're borrowing that and we're just going to park that there and it's going to going to be available And ultimately any interest associated with that because rent is still coming into that. So it's still covering that sort of, it's not interest capitalizing in the heart case since which was and for those people who don't know, we're talking about a case where these accountants and properties brokers was were riding schemes around interest capitalized from that equity on your investment property and don't pay any repayments on that. Take all of the income that you got from the property and put that on your principal home and pay down your personal debt. And the, and the Ato did not like that and they won on the grounds not of interest capitalizing, that was fine, but they won on the grounds it was a scheme which obviously, you know, was in breach of Part 4A of the Tax Act, which is tax avoidance. And so, so there's a few nuances in there, but it does come to the point where this is going to be available for some players. Because the reality is, and, and I'm sure you'll see this as well, it's what what these new laws have done is they've really impacted first timers, first time investors trying to get into the game for, for people like myself and for people who've got one or two properties and they've been using offset accounts really well. Those offset funds can now be moved around. And so if I want to buy one more property, I can potentially dump all of that money into that offset. And So what was going to be a negatively geared property is now going to be neutral or positively geared. And now I've got because remember it's quarantined to rental income. So ultimately my aggregate rental income, I've now got a negatively property and now I've got a neutral or slightly put. So I'm getting that benefit today. So therefore, existing property investors, this is where you absolutely need to talk to a qualified property investment advisor or you know, an investment savvy broker to explain to you what's going to be happening here. What Existing Investors Can Do Now Because once you see those models, once you understand that the movement and the strategy and structure around that, lending is going to be really powerful, isn't it? Sure. Speaker 3 Loan structures, you know, always being important and every, every time we come across something every few years, it just reinforces that. So you know, whether you're live vesting and giving yourself the flexibility to do that down the track, you know, whether it's sort of managing cash flow, getting into the property market, utilizing offset accounts. I've always said the best time to borrow is when you don't need it. Like I'd much rather take my clients to the bank and go, let's lock in this equity. What are they going to use it for? Well, we have no idea. There's no plans. I've always done that myself personally. I'm sure you're the same. Speaker 1 Oh, yeah, It's the top of the cycle, too. You know, we've been calling that out. Yeah, we've been calling this out for the last three months. And if it hasn't landed, we're at the top of the cycle in some of those Queensland markets, in the Perth market, in the Adelaide market, in a lot of regional towns. If you're not selling, get your equity out. Oh yeah, it's absolutely critical right now to get that equity out and just park it there for the next opportunity that comes that way. Speaker 2 Off the back of that, in terms of negative gearing, do we think changes are potentially going to be reversed in the near future? Do we sort of see sentiment supporting that or what are your thoughts around what's going to be happening for negative? Speaker 3 Caring Look, I think it's really interesting because as the second time, I'll say, you know, I think decades, not not days, which is, and I think that's going to be something to really think carefully about for investors, for everyone really thinking 10 years from now, if I look back to 2026, was there an opportunity that I didn't say? I don't want to say that there is. Could Negative Gearing Be Reversed? 19 I don't know. No one knows, no one can crystal ball gates. But I just think that these settings will become more and more unpopular. I mean, they're unpopular now, right? But they get more and the reason they'll get more unpopular is we will see the negative consequences of it. But like in the UK and New Zealand, different markets, different settings, all those sorts of things, but they didn't have any impact on home ownership rates. So, and if I'm so then I think about in kind of two cohorts, you got people that are say mid 30s and older that are probably put a lot of the wealth income attention into the property market on the assumption that, you know, settings are pretty accommodative for them to to do that. And now that's changed. Well, they're 75% of voters. And then if you think people that are younger than 35, maybe some of them aren't in the property market. So they might be attracted to lower prices, But if prices drop 10%, does it really make it, It's OK, yes, more affordable. But if there's another interest rate hike, well, that knocks the 10% out, it's just as unaffordable, right? So there's a lot of things that go to affordability prices one, but you've got to move price substantially for it to really move the doll for those people. And I don't think it's popular to get in front of TV today and say I want house prices to rise, right? That's, but I think most people, and particularly people that have put a lot of their wealth into property absolutely do want their property prices to rise. We'll put it this way. They don't want them to fall. Speaker 1 No, what will there's, there's all of the consequences. So let's let's say hypothetically we, we through these policy changes, we wipe $1 trillion of overall wealth in residential property off. That's $1 trillion of personal wealth that's no longer in the hands of all of those Australians. So the 70% who own their property or, or buying their property that has a material economic activity and flywheel impact. Because the reality is if I, if my property goes up over time and if I downsize, that creates, you know, that money to flow in the economy. Would Cheaper Homes Really Help? Obviously debt makes the economy flow. So there's going to be there'll be less transactions, there's going to be less tax revenue. But I think the two things that to your points to that will move the dollar politically because anything above 10% that's material. And I think, you know, people are like, well, yeah, I didn't mind it. But now, now you're crashing the property market and you know, well, let's call, let's call the 10% a, a correction, a proper correction, a crash is usually 20% or or above. So, so if we see that type of change. But here's the other, the, the the, the ones that are going to sort of hit mainstream. And that is how much rents are going to go up and how much supply is going to be delivered from this because if supply doesn't come, then ultimately rents will go higher and they'll go significantly higher. And I think even even that, that, that is the, that's the consequence, the unintended consequence. So I think if we see a material lifting rents and we've been telling all property investors who own property at the moment, the cost of running your private rental accommodation business has increased substantially, insurance costs, compliance costs. So the governments are getting you on all areas. So if you're not raising rents by 5% per annum as a minimum, just to, to your point, stay in the game because otherwise you've then got to look at the risk adjusted return that you're getting on your. Why Rents Could Rise Further And if it's not, if it's not delivering, then you've got to move on and you've got to potentially redeploy that money into another in, you know, another market to to be able to get that return. Yeah. Speaker 3 Yeah. And so I think they'll just become more and more unpopular for no actual policy benefit. And my gut feeling is that I'm one person. I have no idea of course, but the I reckon both parties will will bring that a policy reversal into the next election in 20. Speaker 2 20 I think there was a lot of talk and a lot of sort of focus to think that negative gearing was going to be the be all, the end all in terms of that would fix the housing shortage, which I don't think that that's necessarily. And we probably realistically going to say that that that's, you know, negative gearing isn't going to have that material shift that I think a lot of people were. Speaker 1 The general, The general public can only consume things in bite sizes and they're looking to blame someone and the and the politicians are looking to blame someone. So they turn the blame on the property investor, driving up the property prices. Now, in reality, in some markets, I don't dispute that. Like you give investors access to credit, easy credit, they'll they'll push property prices up in all markets, right? So, so, so we weren't, you know, like I'll put my picker hat on as the chair of picker and I'll say we did need to make some changes. The animal spirits in the property markets and certainly regional everyone was driving up property prices to unsustainable levels or or pass their fair market value. And so we needed to change some settings and the settings we need to change was access to credit in these vehicles, You know these tax accounts letters and the trusts and all of these stuff. If you did that and then you would have taken a bit of that time away because what you did is is people getting access to easy credit and then you gave a 5% deposit guarantee for the first time buyers. So they went at each other into those regional markets and drove the value high. Now the tides going out will going to see who's swimming naked in terms of what happens to that. So you can do some settings. And then to your point, Luke, you can also then start to think about regulation and start to think about construction. And not everyone needs to have, you know, 6th grade energy efficiency. Some people would be happy to live in a house that that's going to stand for 30 years, not stand for 80 years. So I think there are some other things you can do there. Speaker 3 Yeah. So the reason I mention is in terms of is not to encourage people to believe that they're going to change and and make all their decisions based on that premise, but then just invite people think, OK, maybe they won't be permanent. What can I do over the next couple of years? If we're saying that they change in 2028, the next federal election, what can I do or what do I need to look for over the next couple of years to make investing in good quality, established property attractive again? And so the things that I would think about, you're starting rental yield. So there's some sectors of the market now, particularly Melbourne, you can buy for four, 4 1/2% gross rental yield. My numbers, if they go to five, 5 1/2, which means that rents rise, values come down, both of those things are probably going to happen. If they go to five 5 1/2 percent, you're getting the same internal rate of return there. Investing In A Post-Negative-Gearing World 22 Bang. Yeah. And then you think about main reversion. So that was really my commentary around where property prices. So don't buy into an overinflated macro market. Just had a growth cycle. Buy one that can and then maybe use some financing strategy, cash flow strategies that also extends or improves your internal rate of return because you're putting less capital into the property borrowing structure. It does mean you you generate less wealth. We can't move away from that. If you're borrowing more money to fund some of the cash flow, of course you've got more and more debt now it doesn't move even if you do it for 30 years, it doesn't change the LVR by more than 10%, right. So you still end up building a lot of equity in that property. But we, we have to admit, yes, you will actually build less well, but it can be used something as temporarily. So you might go well rental, you start to look attractive. I think that there's certain sectors or geographical markets that attract me and I'm going to use this cash flow strategy for the next couple of years. And if negative gearing comes back, I'll just turn it off. Speaker 1 Some absolute gold there from Stewart in terms of that. And I would say to you, make the invisible visible by getting that modelled. So if you go and see a business like Stewart's or you go and see a business like ours, we can show you what those numbers look like because we're talking about interest capitaling, capitalizing in some respects. So we're saying that the cost to run your investments are going to be a little bit higher in the short term. But again, you're playing the long term capital gain and compounding game as part of that, which is also one of the key rules in wealth by design. So we're going to pivot to talk about your book now, mate. Now obviously, you know, when I think we last saw, you said kill me if I ever write another book. That was I think 2 books ago. But this one here is obviously the updated version of Investopoly. Yep. Now wealth by Design, the 8 Rules for Smarter investing and Financial Freedom. Now tell us about what the upgrades are. So there's what several, let's call there's four major upgrades that you have upgraded your thinking on in the book. Let's talk through that. The first one was, you know, from diversification at any price to quality at an attractive price and we did, we did touch on it. We did. Speaker 3 Touch on the let's talk about that certainly touched on the 1st 2 and like complete idiot I, I threw out investopoly. Wealth By Design 23 I just started completely from scratch. So it's a complete, complete rewrite and I guess fundamental and some of the rules have changed substantially and some are sort of just changed the margins. But I think, you know, hopefully, hopefully we get better as we go along. And if, if I do write it again in another 8 to 10 years, you know, it'll be better again. But yeah, we we spoke about a value aware asset allocation. So this is true whether you're investing in super, the share market or, or properties. So quality, price and then diversification in that order. And again, you can apply that whether you're buying ATF or whether you're buying property. The second major change in Investopolo really talked about the investment grade property and really the fundamentals of property. What I didn't appreciate as much back then is cycles. Speaker 1 The cycle timing. Speaker 3 And you know the the impact of main reversion and it's not about trying to time the market perfectly or find the next growth area. It's still about buying something very high quality, fundamentally sound, long track record, but buying it when the price is attractive. And, you know, I don't think there's any argument amongst anyone in property that, you know, Melbourne's prices looked attractive. Speaker 1 Well, yeah, I mean, yeah, let's talk too quickly of the Melbourne story because as we came out of COVID, everything else was the settings were right in other States and territories and we were seeing growth in the Melbourne property market as well. So something happened in our Melbourne market that didn't allow for that growth to occur. And that was the level of debt that we took on as a state. And ultimately that then says, right, higher land taxes and the sentiment shifted around, you know, coming into the Melbourne market and looking all Victoria market more generally. So we hope that through some settings and, and we know that the Labour Party has said we'll look at it in terms of land tax, which I think they need to do. And, and, and they know they've cooked the property market, Yep. And so they are robbing Australia, Victorians of hundreds of thousands of dollars in unrealised value. Yep. So hopefully we'll see that come through so. Speaker 3 And I'd kind of argue that that they've been, I would say it's a 20 year growth cycle. So you bought property 10 years ago in Melbourne, you bought it after a 20 year growth cycle. That's the thing that you you've been fighting against. Certainly sentiment is negative and that doesn't help. Yep. But the growth cycle you can't fight against, you know, and I think that's a a big contribute. I think that's in a way that's kind of good news to investors today because it gives us a reason We don't necessarily I'm great for Victorian politics to improve, but don't necessarily need that. I think the other observation in Victoria is we're certainly not crowd enough new jobs that's but we've got the population growth yes and we've. Speaker 1 Got the population growth the. Speaker 3 Highest participation rate, yeah, relative to NSW, which is the other comparable economy. Yeah, good point. So that's, that's the really difficult thing for a government to turn around is get get attract people to location and get them interested in work. We've already got that. So it's going to be, AI would say an easy switch for a new government to then promote, you know? Speaker 1 If we get the economy moving and lift that level of productivity, because you're right, we've got the, we've got the the highest number of small business job failures. We've got the highest unemployment rate of every other state. We get the economy moving. And I think we move into that that cycle. Yeah, let's move on to major change #3 which is around income focus to liquidity focus. Yes. Speaker 3 Let's talk throughout. Yeah, it's a great one for property investors because traditionally financial advisors would talk about having growth assets and as you get closer to retirement and introducing more defensive style assets, income style assets, bonds, term deposits, those sorts of things. What how I like to think about it is just look at absolute return. So because what I'm if I'm going to retire at 60, how long am I going to live for? Well, a lot longer than it was 20 years ago. Plus also I want to have an enjoyable retirement and I want to utilize the those healthy years as much as I possibly can. Liquidity Beats Income 24 I don't want to be personally, I don't want to be 85 sitting home with lots of money. Yeah, ridiculous money in the bank thinking, oh, I should have done more when I was 60. So the way to combat that is then to say as long as I've got a lot of liquidity in My Portfolio, So I've got two or three years worth of living expenses I can draw upon, so that could be money in offset accounts, for example, then I'm going to invest for absolute return, total, total, highest return. So remain investing growth assets, property and shares. Just make sure you introduce more liquidity into the portfolio so you don't need to sell assets. If you do need to sell assets, you can sell it when the time suits you, when it suits the market, not not necessarily under compulsion. Speaker 2 And then we've got the 4th 1, which is from willpower to automation. Speaker 3 Yeah. So that's really around cash flow management. I know it's something close to your heart, Ben, but. Speaker 1 Or nothing, no wealth. Get started if you can't trap surplus. Speaker 3 Yeah. So I'll talk about the wealth equation in the book, which is your surplus, your surplus, investable cash flow multiplied by investment efficiency, which is really how much of that? The Wealth Equation Explained 25 What is that return? How much are you keeping? So compounding capital growth is good for that because there's no tax drag multiplied by time. And so that first part of the equation is the amount of money I'm putting into the investment strategy. If that's zero, doesn't matter how good my investment efficiency is or how long I, I, I hang on to that strategy for, it's still going to be 0. So very much more into automating cash flow management, which I know is exactly what you guys sort of teach and talk about. But you know, pay yourself first, you know, get that direct deposit straight into a particular offset account or into additional super contributions, whatever you might be doing. Speaker 1 I mean, I think I, you know, like, I love chatting with you. We, we, we, we're really cut from the same cloth in a lot of the ways. And we think, and I think the way in which you educate people on your podcast and also people that come to sit down with you and your team, there's, there's a lot of frameworks and fundamentals as part of that particular story. And, and you build it out into a nice sort of overall arching framework. And we'll put that in the show notes. So people, with your permission, yeah, of course we'll put that very similar in terms of our lifestyle by design. Yeah, in terms of trapping that story and, and taking it through. So everyone, if you haven't already checked it out, it's available now in all the good bookstores and online through Amazon and so forth. So check it out. Wealth by design, 8 rules for smarter investing and financial freedom. And it's might it's great to have you on for the 4th time. Yeah, thank you. This, you know, I can't believe it was 2019 that we'll get you on. So we're going to COVID, we're going to, we're going to have to get you on on a little bit more regular basis for, for obviously all the gold. Speaker 2 The story base was still the same though, wasn't it? For, you know, yeah. Labor borrowing capacity being harder, you know. Speaker 1 Yeah, well, all of the stories that we talked about 5 fundamental, 5 rules of mastery in terms of building wealth and then the royal Commission negative gearing in 2019. So we've we've had a lot of great conversations and, and obviously we get to catch up for the odd lunch or two to chat about, you know, all things investing and property and, and wealth building. Stuart's Final Investing Lessons And so a credit to you and thank you for sharing this amazing knowledge to to our community. Speaker 3 Thanks guys. Thanks for helping me. Speaker 1 So thanks against you for coming onto the show. Check it out. Wealth by design, excellent framework, some really proven theories backed by data and investigation by Stuart and his team of expert advisors in terms of the team that they work for. So thanks again for coming on and remember, everyone, knowledge is empowering, but only if you have something. Bye for now. Speaker 4 Hey folks, Opti here, your smart money sidekick inside more. Just one quick thing before we sign off. If you're new to the Property Couch community, welcome. One quick tip to help you get the most value from the show. Our 1st 20 episodes cover the foundations we build on every week. And yes, listening on 1 1/2 speed is totally acceptable. If you're short on time, download our free binge guide. It distills those episodes into one easy read with heaps of visual diagrams alongside free tools inside. More your all in One Financial home to help you organize your money and plan your next best move. Check out all the links in our show description. And just a quick reminder before you go. Anything we cover on this podcast is general in nature. It's not considered to be financial advice, and we certainly recommend that you seek out professional advice before making any financial decisions. Once again, everything mentioned is LinkedIn the show description ready when you are. Catch you next week.