Smart Money Weekly; Balancing work and family, inflation back on the rise and how many properties do you need?

Ben Nash


Happy Monday.

Australian shares surged to a five-week high this week as CommSec stated that the ASX200 is now only about 4 percent off its record high back in August 2021. Are we starting to see the bounce back from last year already in full swing?

Home loan refinancing is also at a record high. A record number of borrowers switched lenders in November according to the Australian Bureau of Statistics. The value of owner-occupier refinancing increased 9.1 percent to a new high of $13.4 billion. However, the number of new home loans has fallen 3.7 per cent according to the ABS. Interestingly, first-home buyer loans are now around half of what they were at their peak in January 2021.

Smart Money upside #100
Here we unpack the numbers from a recent client we helped, what they were doing with their money when they came to see us, what they chose to do as a result of going through the financial planning process, and the economic impact and upside we helped them achieve. To chat about how to get these sorts of results, you can book an intro chat with us here.

Couple, mid 30’s; household income ~ $230k; total assets ~ $1.5m; saving ~ $5k annually.

Information overload, decision paralysis, no clear goals in mind, the fear of making mistakes and no strategy around shares and employer share plans.

What they wanted from us / the advice process
Clear strategy to buy another property, reduce taxes and a solid long-term investment plan.

What success looks like for them
Having another investment property, feeling more confident and secure that their wealth is building and the ability to do the things they love.

What money strategy they were following before we went through the planning process
Surplus towards savings and a little towards investments with a budget tracking system.

What money strategy they chose to pursue from our planning work
Buy another investment property, building a diversified share portfolio and additional super contributions.

Key benefits of going through the process
Clear advice and plan around how to arrange for the property deposit using existing cash, an easy-to-follow banking structure that makes it easy to track and save, access to a diversified investment portfolio that will generate passive income in the future and the switch to low-cost superfund with access to a range of quality passive investment options

Value of advice after all advice fees year one: $2k
Year 20 upside after advice fees: $3.3m

If this story resonates you can book an intro call with us here.

Video of the week
New inflation data has been released stating that inflation has risen back up to a 32-year high. In this video, I unpack what this news will mean for Aussie mortgage holders and investors. Check out the video here.

Client story of the week
Getting a higher-paying job always seems like the smartest play, but when it comes to extra stress, pressure, and commitments that can stop you from living the lifestyle you want, you have to question whether it’s really worth it. This week’s client story delves into the impact a big promotion can have on family planning and how we can set up decision-making for success. Check out the full video here.

Podcast drop
Learn the tips, hacks, and strategies to help you level up your money game. Pods released last week:

Upcoming events:
Free online money education to help you invest smarter and create a life not limited by money:

Blog of the week: You don’t need ten properties to get rich
Aussies love property.

We love buying it. We love owning it. And we love talking about it.

And with the property market softening around the country off the back of interest rate rises, many would-be property buyers are wondering if now is the time to pick up a bargain.

There’s a lot of fear in the property market today, and with good reason. The recent record rate of interest rate rises caught many people by surprise, and some people are now realising they’re overextended.

But at the same time, history tells us investing through property is the most effective way to build your assets and wealth. And with prices down up to 10% around the country, with a soft property market forecast through the end of 2022 and into the new year, the market is stacked in the favour of smart property buyers.

You don’t need ten properties
But you don’t need a heap of properties to get ahead. I’ve included a table below showing how property would grow over time using the 150 year property growth rate of 6.3%.

You can see from this that starting with $1m of investment property value, over 10 years you’d make a total of $842,182 after taking away your starting property value. Over 20, 30, and 40 years you’d be looking at the growth of $2,393,636, $5,251,697, or $10,516,767.

If you have more property, the numbers get even bigger – and quickly.

While the numbers look good, this also tells me you don’t need ten properties. You probably don’t even need five. But the more you have, the faster your wealth will grow.

On paper, the strategy that can get you from where you are today to building the most wealth will be to borrow as much money as the banks will lend and buy as much property as possible, all as quickly as possible. But this is often not the best strategy, because you need to manage your risk (and you need to be able to sleep at night).

How to get the best results when you buy property
You can see from the figures above that investing through the property is powerful – but not everyone achieves this sort of success when they support through the property. If you want to give yourself the best chance of getting the results you want you have to be smart about how you tackle your property investing.

There are a lot of different opinions on this, but my take is that there are just two things you need to get right to achieve success in investing in property.

First, you have to choose a good property.

And second, you have to make sure you’re never forced to sell your property at the wrong time.

Choosing a good property
There is a heap of different ideas and approaches, and the volume of content you can find online is staggering. Most property gurus are adamant about why their way is ‘the only way’ and why everyone else is wrong in their approach.

But the thing is, there are many different ways to be right when it comes to property.

You can chase the property hotspots, you could buy-renovate-flip, buy off the plan and sell before completion for a profit, build a positively geared property portfolio, target distressed properties, or just follow a simple buy-and-hold strategy.

All these strategies can work, and they all have worked in the past.

The approach I take personally, and the approach we follow when helping clients invest in property is a simple one – buy quality properties in premium suburbs.

Every city is different, but if you look at the fundamentals you’ll find the areas where supply and demand best support property growth are up and down the East coast of Australia within 10 kilometres of the Sydney, Melbourne and Brisbane CBDs.

These are the areas where supply is most limited and demand is forecast to be strongest through population growth. These areas aren’t going to be the cheapest, but they’re premium for a reason.

Never be forced to sell
Particularly with what’s going on with interest rates today, property affordability is a challenge. If you’re going to buy property, you should see it as a long-term strategy and a long-term commitment, so you need to be able to comfortably fund your property investment over the long term.

Comfortable means that you can afford the ongoing property payments and ongoing property costs like rates and maintenance, and fund the lifestyle you want, and still have enough money leftover to get ahead with your money.

The key here is clarity on what things will look like post your purchase. You need to map out your money to see how the numbers stack up today and into the future.

When looking ahead, it’s important you consider any major changes to your income or expenses, things like time out of the workforce for family, childcare and schooling costs, or other major expenses that are important to you.

When you get this right, you’ll build the confidence to buy your property, knowing it will actually work for you.

The wrap
Property is a powerful way to grow your wealth. But property investing is a serious commitment, so you need to plan well to get the results you’re looking for.

There’s a lot of opinions out there about property that can mean things get pretty complicated pretty quickly, but it doesn’t need to be. Like with many things, simple is effective.

Understand the power of property investing and how it can help you build your assets, but know you don’t need a heap of properties to create serious wealth. Then choose a good property and make sure you’re not forced to sell it, and you’ll be well on the way to the results you want.

To your success,


PS: Pivot Wealth exists to help people invest smarter to create a life not limited by money. If you want help to make your next steps easier, you can book a 10-minute, no BS chat with us here.


Ben Nash
Founder and Adviser
Pivot Wealth

The information in this note is not personal advice, a guaranteed pathway to that elusive beach bod, or the lost script of Edna St. Vincent Millay’s Pulitzer Prize-winning Conversation at Midnight. This is just a bulk communication pushed out into the internet, and it doesn’t even have your name on it. Your personal situation, needs & objectives, and financial situation have not been considered in putting this together – nor have we considered your dietary preferences, the way you like your hair cut, or your favourite travel destination – but we have spent a lot of time thinking about the future of urban society, whether there is other intelligent life in the solar system, and the pervasion of soy and linseed bread in Australian metropolitan hubs. You should consider the appropriateness of any general advice in relation to your own objectives, financial situation and needs and seek advice before taking any action. You should also consider using a variety of eau de toilette fragrances to keep your partner interested and colleagues on side, not using plastic straws, and minimising your screen time. Where information relates to a financial product, you should read and understand the relevant product disclosure statement. Where information relates to your own potential for awesomeness, you should consider backing yourself totally and completely. Past performance is definitely not an indicator of future performance when it comes to investments and financial products, as well as the likelihood of your children sitting still and quiet for an hour being satisfied playing with a used piece of wrapping paper. Financial services guide.