Property Hub - Investment Insights & Inspiration - Get Invested: Danielle Ecuyer on 'Shareplicity' - a simple approach to share investing

Episode Date: September 13, 2020

if you’re looking for more clarity and confidence on how to invest in shares and equities in all of its myriad forms, today’s guest Danielle Ecuyer is your perfect compliment. Danielle has been actively involved in the share market for four decades. Beginning her career as an equities analyst and advisor, she held senior roles in large investment firms in both Australia and the UK.  And for the past 12 years she’s been a private investor where her main income source is derived from her own investments – she walks her talk!  Danielle has recently published her best selling book 'Shareplicity' - a simple approach to share investing, which could be described as the share equivalent of my property book, 'The Freedom Formula'. Together you have the complete guide to safe and affordable investing across shares and property.  Danielle has distilled her years of global share market experience into this handy guide to share market investing.  In Shareplicity, she takes the complexity out of share investing, explains concepts simply and in plain english, and provides go-to steps to help you start or improve your investing. In this respect, Shareplicity is a great way to better understand share investing basics as well as the changing dynamics of share investing that we’ll now experience during the upcoming extended period of lower for longer interest rates.  As I hear about a lot of first time investors jumping on the share market band wagon without any clear understanding of what they are doing, Shareplicity is very timely in that it will give you some great insights on how to manage the challenge of the opportunities and risks of investing in times of radical uncertainty moving forward. Using her great book as a guide, our discussion today reveals great answers to many of your share investing questions including: Where do you need to start with share investing and what steps should you take? What are the biggest mistakes that most equities investors make? What makes a winning share? How should you decide which shares to buy? And how can investors build the best portfolio to suit them? There is no doubt that at the time of recording this episode, we’re living in unprecedented and unchartered times for investors as we continue to work through the ongoing challenges that have arisen out of the recent pandemic.  However, the themes we discuss today and those that are outlined and reinforced in both of our books The Freedom Formula and Shareplicity still hold true and have proudly passed the COVID-19 test. If COVID-19 has taught us anything, it’s not to become complacent with our money or our investing and with great change comes great opportunity. So if you want to profit from the mother of all investment opportunities and the rare once in a generation window of opportunity that is going to emerge from these times, then grab yourself a copy of Danielle’s book – I found it an easy and engaging read. Danielle's book recommendation: The Big Short by Michael Lewis Get Invested is the podcast dedicated to time poor professionals who want to work less and live more. Join Bushy Martin, one of Australia’s top 10 property specialists, as he and his influential guests share know-how on the ways investing in property can unlock the life you always dreamed about and secure your financial future. Remember to subscribe on your favourite podcast player, and if you're enjoying the show please leave us a review. Find out more about Get Invested here https://bushymartin.com.au/get-invested-podcast/  Want to connect with Bushy? Get in touch here https://bushymartin.com.au/contact/  This show is produced by Apiro Media - http://apiropodcasts.comSee omnystudio.com/listener for privacy information.

Like most things in life, Bushy, you know, you can't learn to swim unless you get in the water and share investing is the same, but you really at some point need to take the plunge. But I always say, do your research, try and get some knowledge and maybe start in a simple way. Welcome to the Get Invested podcast, where we share great conversations with experts from all walks of life to uncover their secret know-how and where they invest their time, their skills and their money, and the benefits that this has created. You see, the truth is that everyone invests. Every minute of every day, we're investing our time, our skills, our energy, and our

money in something. Some of us are investing consciously, some unconsciously, sometimes for good, sometimes for bad, and sometimes for no impact. Get Invested will help you to start living by design, not by default. I'm going to help you to make it happen, not let it happen. You'll hear the top tips on how you can live with conscious intent so that you can live more, work less, and leave a living legacy by investing now.

Listen to the show to discover the top tips on how to get started, make the most of your investment journey, and ultimately to be living your dream, not someone else's. More episodes can be found on iTunes or at bushymartin.com.au forward slash getinvested. Thanks for listening, and now, let's get invested. Hi, Freight and Fighters. Have you taken the investment plunge?

Or like many, are you still standing on the edge waiting for the perfect time to jump in? Or have you tentatively eased in on that treading water up to your neck, but you're too nervous to dive under the surface? As Robert G. Allen so famously said, How many millionaires do you know who've become wealthy by investing in savings accounts? if you've been listening to get invested for any length of time you're well aware that you need to invest beyond paying off your home loan and just putting money into super you're going to need to do this if you're going to avoid penny pinching poverty

when you try and stop work and be able to sustain your lifestyle long term so you can tick off your bucket list but confronted with the radical uncertainty and the rapidly changing times that we continue to live in, what do you actually do? What do you invest in and when? It's been said that the secret of happiness is freedom, and the secret of freedom is courage. So how do you achieve this? Well, it simply comes down to the choices you make. As Jeff Olson said in his great book The Slight Edge, life is a curved construction, time is its builder and choice its major architect. So how can you choose to become the best version of you? For examples of your choices, I'm going to borrow the story about the ostrich,

the hare and the tortoise from my book, The Freedom Formula. So let's assume that after staring hard at yourself in the mirror and really seeing yourself again for the first time in years, you suddenly have an epiphany and the sudden awakening motivates you to want to do something to change your life before it's too late. For the sake of the story, let's assume that you and your partner have worked hard for years and you're looking forward to not having to work and living comfortably in about 20 years time. Once you don't have to work, and notice I'm not using the word retire because I don't actually believe in it, you dream you'll be able to do all the things on your bucket list and maintain your standard of living until you shuffle off the mortal coil or

join the choir invisible as Monty Python are famous for saying. Now to round out this picture, you currently earn about 160 grand combined income per year and you're both in solid jobs. You own your family home with a mortgage. You only have a couple of hundred thousand left on your home loan and you plan to pay it off by the time you want to stop work. You've got about 20 grand in savings or in an offset account and your super's worth about $200,000. Now, after your epiphany that you need to change your life, you get all excited and you take your partner to a rich dad, poor dad wealth building seminar. If this is sounding a bit familiar, it's because this is exactly what I did. Now, after you leave the event, you're torn

between three choices. Firstly, to do nothing differently because it all sounds too risky. You can just keep paying off your home loan and hoping that your super and or the pension will look after you when you decide to stop work. Or secondly, you can try to buy and sell shares and property to make quick profits because you're in a hurry and you want to stop work as quickly as possible. Or lastly, you can invest slowly and progressively in long-term whole growth assets like property and shares. Let's now imagine that the theories of Einstein and other scientists in the field of quantum physics revolving around the concept of the multiverse or many worlds interpretation hold true that is where all possible outcomes of a

choice or a situation occur simultaneously so instead of one continuous timeline at every decision point each choice creates its own parallel universe a bit like the movie sliding doors with Gwyneth Paltrow where two parallel life courses with different consequences and outcomes spring from a single branch point when she either catches or misses a train based on the speed of the sliding door. This is a world where the universe looks like a series of branches splitting off a tree limb at each and every decision point. Now in this case, imagine you can now follow a trio of parallel lives based on which of the three investment choices you decide to take. Jump forward 20 years and all three versions of you accidentally bump into each other

in the local pub and you all decide to have a drink together. Now like the old Booper meet a healthier version of you advert, all three of you are absolutely shocked at the differences caused by each other's lifestyle choices. Now for the purposes of this story, the three versions of you that I'm about to outline are male, but a female would face very similar versions although very different physical results. Now in keeping with the good old Aussie tradition of giving everyone a nickname. Let's give the do-nothing version of you the nickname Ostrich, the impatient version of you the nickname Hare, and your steady and persistent alter ego the nickname Tortoise. Starting with Ostrich, who decided to stick

his head in the sand and chose to do nothing differently but pay off the home loan and put some money into super. He and his wife have clearly had a really hard life and are now doing it really tough. He looks really tired and exhausted, worn out after years of the stress of just getting by. Ostrich is bald and carrying a couple of spare tyres around the middle of his stomach and he's battling diabetes. Now that he's stopped work, his super and part pension only allow him and his wife a penny-pinching existence, surviving on a meagre $20,000 a year, which, sadly, is about the average case for over 73% of Australian Tyroese currently over the age of 65.

Ostrich's survival income is a fraction of what it was before he stopped work, and he's burning through his superannuation fast. On this very slim budget, he and his wife can only afford local day trips for holidays because they can't afford to go interstate or overseas. very occasional club special meals or the odd cheap takeaway as their eat-out options they can only afford an old car that they've had for the last 15 years while struggling to afford repairs homebrew beer is their only alcohol option very basic clothes bought on sale or at the local second-hand op shop are all they can afford they have to cut their own hair and they can only

enjoy free or very low-cost leisure activities like walking and watching telly. They can only afford minimal heating during the winter, and fixing home problems themselves is their only option because they have no money left for maintenance. And sadly, they can only afford public health because they can't afford private health cover. Ostrich's quality of life has fallen off the cliff. So much for ticking off his long-awaited bucket list. It's now reduced to a thimble list. To try to improve their cash flow, they sold their family home for over a mil and downsized by buying a smaller masonette, giving them an extra 500 grand. However, they then realised that this totally eliminated their pension, so they're actually no better off. Ostrich is already

considering trying to go back to work to boost their lifestyle, but his health issues and fatigue are really holding him back. He's anxious and fearful about his future. As he reflects on the wealth creation seminar he attended two decades ago, he's absolutely filled with regret. If only he had the courage to invest then, he might look more like Tortoise, but more on him later. At the time, the prospect of borrowing money to invest scared the hell out of him and his wife. So they decided to follow the safe road and just pay off the home and rely on super and the pension. Deciding to do nothing and remain safe and comfortable then has left them very uncomfortable in the long run.

Hare then shared his story. He also looked tired and said he was shagged out after a long squawk. Bald, beleaguered and bulging in his old and faded overalls. He leant on the bar and lamented. After that faithful wealth creation seminar 20 years ago, he decided to go gung-ho because he was in a huge hurry to get rich quick and retire early. He gave up his job and started his own small one-man business, thinking this was the quick-ticket fortune.

Five years later, he was still struggling to pay the bills and working harder than ever, burning the midnight oil and sacrificing his weekends. His kids grew up without really knowing him. Hare said he didn't believe in super because he felt it was too slow and boring. So he diverted any monies he could, in fits and starts, into buying shares whenever he could. The trouble was, he didn't trust financial planners or stockbrokers, and because he had very little time, he relied on hot tips from mates. This meant he was always buying at the peak and sadly selling at the bottom,

and losing money hand over fist. On the few occasions that he picked a winner, he then lost most of it in tax. He just couldn't win. As his desperation and impatience grew, he then dabbled in highly leveraged share derivatives called Contracts for Difference, or CFDs, that actually mirror the movement of the share market, and he lost even more money. Finally, he turned to property and followed the misleading reno-to-riches path to financial oblivion.

on paper buying renovating and then selling properties in his spare time were profitable but the properties took twice as long as predicted to renovate and sell he ended up spending much more than anticipated on the rent homes and he actually ended up in the red after purchase costs loan interest holding costs selling costs and capital canes tax were deducted some flashy slippery shoes broker then convinced him to set up a self-managed super fund and then borrow money to buy what turned out to be way overpriced apartments amongst hundreds of others. And he was now in the hole for hundreds of thousands of dollars. You could say he was here, there and everywhere. At the age of 60, he'd paid off his house but he had no real superannuation

and the pension just wasn't anywhere near enough to survive on and maintain the lifestyle that he'd grown accustomed to. He had no choice but to keep working seven days a week with no end in sight and his health starting to fail. He was still trapped on the treadmill with no light at the end of the tunnel. Now, standing quietly and humbly in the corner, Tortoise then shared his good fortune.

Tortoise looked relaxed, fit, healthy and prosperous. Impeccably retired without a single grey hair, he looked at least ten years younger than his identical twins. He'd semi-retired over five years ago, working only two to three days a week on a consulting basis back to his long-term employer, an arrangement that he'd worked out after reaching management status. Now that he was no longer working

and what many would call fully retired, he was still living the dream, and this is what he enjoyed. Annual holidays of six to eight weeks interstate and overseas, regular good-quality restaurant meals out with his partner, owning and driving his dream car, spoiling himself in his wine cellar, enjoying a good wardrobe of quality clothes for himself and his partner. They had regular haircuts and beauty treatments at good salons. They had access to all the latest and greatest electronic equipment,

TVs, computers and music gear. They liked taking part in regular leisure activities like golf, sailing and cycling. They were replacing the kitchen and bathroom and renovating the home. and they had the peace of mind of private health insurance and access to the best doctors and specialists on the odd occasion that they needed to go and see them. Following the Wealth Creation Seminar all those years ago, Tortoise started on a journey of slowly but surely investing in shares

and then building, renting and holding good quality affordable homes in high growth areas. He engaged a group of experienced and expert independent professionals as his team to create his passive income investment roadmap app and then secure and manage his growing portfolio. This portfolio had been cleverly structured so that it didn't impinge on his time, his salary or their savings. His independent investment team allowed him the luxury of focusing on building his career and his work income and devoting his spare time to his friend's family and recreational pursuits.

He was looking forward to the future, secure in the knowledge that his safe affordable long-term investments had provided his family with a six-figure recurring income that would maintain their highest standard of living for the rest of his life. He was also proud of the legacy that they'd created that would provide for his children long into the future. Life continued to be great, all thanks to having the courage to make the change, the intelligence to leverage an expert team to make it happen, and the patience to allow time and the law of compounding returns to work their magic. As Brian Tracy once said,

the ability to discipline yourself to delay gratification in the short term in order to enjoy greater rewards in the long term is the indispensable prerequisite of success. So to better understand the impact of your choices over time, let's contrast the extremes of the numbers for ostrich and tortoise so you can compare the pair. bastardizing that old industry super funds out of compare the pair ostrich and tortoise are the same age with the same income and make the same super contribution however there's a lifetime of

difference in their final retirement lifestyle due to the added benefits of tortoise investing in a safe affordable mix of shares along with a couple of high growth rental properties that's now giving him an ongoing passive income stream of over 120 grand a year while ostrich was just getting by on $20,000 a year. This is the massive difference between relying on your super versus making some conservative investments in growth assets over time. Unfortunately, a lot of Australians are like ostrich and continue to live under this misapprehension

that they just need to pay off their home loan before they retire and then they can maintain their current lifestyle and income by relying on a mix of their super and an age pension if they can get it. As you might expect, I affectionately refer to the enormous flock of these ignorance-is-bliss-hard-working Aussies as head-in-the-sand ostriches. And while their heads are buried in the sand, I'm pretty keen to give their rear ends a good wake-up and a kick-up that you know where.

So how's this all looking to you? Clearly being an ostrich and burying your head in the sand, and that is doing nothing differently and adopting the she'll be right, mate, super route, isn't a sustainable option. By doing nothing differently and going with the flow, you're actually making the decision to go backwards and condemning yourself to a very restricted lifestyle in the long term. This is a non-decision choice that will give you only two options later in life,

either to survive on the smell of an ollie rag on a diet of dog food and two minute noodles or to keep working yourself into the grave. This is the current trajectory for many well-meaning but ill-informed Aussies. If you want to see where you're at with your freedom forecast and where you're likely to end up if you do nothing differently feel free to join us on one of our upcoming Freedom Flight webinar education series So just email me at bushey at khgroup.com.au and we'll shoot you the details. But a safe, affordable and relatively easy way is available to become the best taughtest version of yourself.

On the back of my own personal experience and the success of the hundreds of people our know-how team have helped, I firmly believe and know that all time poor professionals can enjoy more fulfilled lives and live more, work less and regain their time and freedom long term by just investing carefully. You simply need to adopt our passive-aggressive investment approach, that is, to be quietly aggressive about accumulating passive income investments. And if we can do it, we know you can. This strategy isn't sexy, it's not rocket science and we didn't invent it,

but we know that it works. so you can remain a deceptively comfortable ostrich and end up very uncomfortable long term or you can have the courage to be an intelligent patient slightly uncomfortable tortoise now so that you can become and remain very comfortable long term the choice is yours and given the radical uncertainty we continue to face it's time to ask yourself which version of me do I want to be? Now, I hear you saying something along the lines of, I don't believe it. It all sounds too good to be true. It's easy for you, Bushy, because it's all you do, but I don't know anything about investing. I don't have the time, and I don't know who

to trust. And even if I can, what do I invest in, along with when, where, and why? At this point, most people start talking to family and friends with very mixed results, depending on their close networks worldview, of course. Remember that according to Tim Ferriss, author of The 4-Hour Workweek and Tools of Titans, you're the average of the five people you most associate with. So are your family and friends the best people to guide you in this? Before we look at what to invest in when, let's have a look at where most people turn to get advice on what to do. Now, over the years, I've found that everyone in Australia is an expert on investing, particularly in shares and property. It doesn't matter whether

you're at the pub, at a barbie on the weekend, at the hairdressers or at work, someone is always happy to share their opinion. And the people sharing their opinions can usually be broken into two main groups. On the one hand, you have the legend in their own lunchtime type who's just heard some new get-rich-quick scheme or how to make a mint out of shares or property in a flash. They swarm like fries around the meat of the instant expert speakers who go on ad nauseum about schemes like overnight reno to riches or own 10 properties in 10 years. The latest crazes are pillaging your super to buy unseen overpriced low-performing dual occupancy units interstate via an SMSF or a self-managed super fund or investing in the

new and sexy cryptocurrency. These are the same types of people who only tell you about how much they won at the races or the casino, but conveniently ignore the small fortune that they've spent and lost to get the win. After one or two years they get impatient, or they realise that their latest scheme hasn't made them instantly rich, so they cut their losses and jump from the frying pan into the fire, chasing the next best shining new thing. In the investment race between the slow, methodical, persistent tortoises and the hectic, haphazard hares, the people seeking the latest get-rich-quick scheme are the hares that tear around frantically, chopping and changing but never getting to the finishing line, and they just go broke trying to get rich. For the average Aussie, these schemes are scary, risky and sound too good to be true. Because they are. conversely you also bump into a lot of nervous Nellies who always have a reason why now is never

the right time to invest or in fact do anything as you've already heard a lot of these ostriches are convinced that the best plan is just to play it safe and pay off their home and live off their super and the pension in this group you also have the procrastinating Peters and Pamela's who are interested in investing but never actually get started because they tie themselves up in paralysis by analysis. They constantly confuse themselves through reading every book and going to every seminar, but they never actually get started because they can never find the perfect investment or they latch on to some reason, which is just another word for an excuse, as to why is never the right time. In the back of their minds, they think they need to do something,

but are too scared to take the leap. They're not aware that the biggest single contributor to wealth is time. That is, how long you own a growth asset. Years pass and still they have done nothing but read, think and talk about it. I feel really sorry for them. Over the years, my wife and I have seen how patience and persistence in property and shares over the long term, using time, the tenant and the tax officer to do the heavy lifting,

actually wins the lifestyle freedom race. If you have enough time left, a steady income and equity, a shared portfolio and a small number of quality properties will generally get you to where you want to be. As the world's most successful long-term investor Warren Buffett so perfectly puts it, wealth is the transfer of money from the impatient to the patient. The hectic hares would do well to learn from this. The funniest thing about all of this is that those with the strongest opinions

and who talk loudest and strongest about investments generally don't own any or not for long. As a wise person once said, talk is cheap because it's the only thing broke people can afford. Or, as Plato said over 2,000 years ago, wise men talk because they have something to say, fools because they have to say something. As I've mentioned before on Get Invested, this has led me to the creation of the law

of inverse investment, and it goes like this. The louder and the stronger a person's opinion on investment, the less likely it is that they have any. The legitimate litmus test on investment for me has always been about what you've actually done, not how much you talk about it. So the first question you need to ask of anyone who talks about investment is, how much have you invested or how many investment properties do you own? If they say none, run.

Unless your family and friends are active investors, don't ask them. Now, being slightly facetious, even Jesus' early friends didn't believe he was the Messiah. You need to seek out other like-minded successful investors who have done what you're looking to do and then learn from them. In our case, Sonia and I have progressively built a diversified investment portfolio spread across property, shares, cash and super over the last 20 years. So based on my lessons learned as a multiple asset investor, here are my hands-on hints on what to invest in along with why and when.

Now I need to stress the usual ask cover at this point, that nothing I say or anything our Get Invested guests say is intended as financial advice. It's merely our personal opinions on what has worked for us and takes no account of your personal situation or your risk appetite. I encourage you to seek out independent professional advice to ensure any investment options that you're considering are appropriate to you, your circumstances and your goals.

In simple terms, as a time poor professional and depending on your current nest egg net worth, you need to invest in either the highest growth or the highest cash flow vehicles that are the lowest cost, most affordable, safest, simplest and easiest assets to own. In this regard, I've got absolutely no preference for what I invest in. As one of my old business partners used to say, if kebabs produced the safest, easiest, most affordable investment result, I'd invest in them. In this context, the rental properties in our portfolio are nothing more than money boxes in the shape of houses

and I have absolutely no emotional attachment to them. It's all about the numbers. Value growth that is later converted to cash flow is the key investment concept here. As a result, I personally favour a mix of investment tactics that progressively transition across the full spectrum of shares, property, bonds, cash and superannuation over time. This is what I like to call the income for life,

capital growth to cash flow curve investment strategy. This approach satisfies the key criteria where you're time poor and you need low-cost, safe, simple, affordable and easy investment options. What to invest in when can then be simply defined by answering two critical interrelated elements. How much passive recurring income is enough to sustain your ideal lifestyle and what income-producing investment nest egg size would generate that lifestyle income.

based on this if your nest egg net worth today is below the required level to generate your ideal lifestyle income you need to invest in growth assets once your net worth is at or above the level required to generate your passive recurring lifestyle income you need to convert your investment portfolio to cash flow this is the essence of the capital growth the cash flow S-curve that I talk about in more detail in my book, The Freedom Formula, so you can then pinpoint where you are at in this process. As an example, adopting the average comfortable post-life lifestyle maintenance income of about $120,000 to $125,000 a year and applying the 5% rule or the 20 times rule, if your income producing nest egg is valued at less

than $2.5 million, then you need to invest in capital growth assets. If your nest egg is worth more than $2.5 million you need to convert in cash flow investments. For most people the roadmap is simple. To sustain your quality of life long term you need to replace your earned work income with passive investment income by accumulating high growth income producing assets and then converting your capital growth to cash flow via ongoing tax effective income streams when you decide to stop or reduce work. Again, the key focus here is growth first, then cash flow. So the approach here is one overarching income replacement strategy

with two important investment stages, with the overall strategy being income replacement for life. This is a parallel income and wealth approach which allows you to continue to focus on building your career and optimising your earned income. this then fuels your remote control parallel investments that grow your net wealth to a value where they can then be converted into a tax effective passive ongoing income stream that actually replaces your earned income and you'll need to have to work giving you the freedom of

your time to do what you want when you want now most people are generally in the growth phase of their investment plan so your focus needs to be on the highest growth and lowest risk investment options available, which in Australia continues to be shares and property, because they both enjoy similar levels of long-term growth. It's just a matter of when you invest in them. Note that the home you live in doesn't count. Why? Because I define an investment asset as something that not only grows in value, but gives you an income. Your home fails this test. Yes, it may well increase in value over time, but it actually costs you money to keep in terms of rates, taxes and maintenance.

It takes money out of your pocket. It doesn't put money in unless you sell it and then you've still got to live somewhere else. This then feeds into what I call a wealth by stealth approach which builds progressively over three key phases. Phase one is to activate, which generally takes between one to five years. This is about reducing your costs and saving

to create a rainy day emergency fund and then building your initial investment deposit. Our kick-ass automatic saver system that I've mentioned in past episodes is a great way to make this happen easily and effortlessly. You can also do this by refinancing and restructuring your existing loans, etc., to reduce your costs and then access available equity in your home and or save a minimum of 10% to 20% of your income. You then invest initially in safe, affordable, low-cost, high-growth share index funds

to grow your investment savings from zero to a minimum of about $100,000. Phase two then is to accumulate and then accelerate, which takes anywhere from 10 to 20 years plus. This is where you take your equity and your savings deposit and you buy or build rental homes using borrowed funds to significantly leverage up your investment asset base and then fast-track the quantum of your net worth growth by up to 4 to 10 times. this is where leveraged high growth property

substantially turbocharges your nest egg growth e.g. properties where you use most of the bank's money to significantly increase the value of property that you actually secure compared to a much higher risk but lower level margin loan in this regard you're not investing in property at this stage

for its rental income but primarily for growth and cleverly structuring the cash flow affordability of the property so that they don't bite into your salary, your savings or your lifestyle. This accumulation phase of your remote control income replacement journey is initially very exciting as you secure your required value of growth assets like shares and property. But this then turns into a long haul, uneventful marathon

for years across the desert before you reach your lifestyle oasis. This stage is when your quiet patience and your persistence needs to kick in so that you can then step back and allow capital growth over the next 10 to 20 years to generate your required level of wealth without your in-building patience leading you to try to force to make it happen. Remember, that good investing should be more like watching paint dry or watching grass grow. If you want excitement, gamble at the casino or go to the races and see how you go. Phase three is the final amalgamate, liberate and remunerate period.

In the five year lead up to your work reduction date, collaborate with your golden circle team, a la your accountant, financial planner and independent property strategy advisor to rationalise your high net worth portfolio into a tax effective ongoing cash flow. Now, phases two and three are where you devote most of your time, so I'm going to expand on them now. So in the accumulate and accelerate stage of growth, you buy or build rental homes using borrowed funds. I suggest you consider the new build option to manufacture potential instant equity growth on completion and to minimise ongoing holding cost cash flow affordability.

Alternatively, secure an existing rental home or homes. If you're uncomfortable with the perceived uncertainty of the new build process and you can afford the ongoing holding costs that are in the range of four to ten times that of new build equivalents. To expand on your options, also consider the following. New brownfield redevelopments where you manufacture immediate equity by purchasing an existing subdivisible property in an unidentified future high growth area and then demolish and build, hold and rent up to four standalone homes. Or you could build two to four individual standalone homes on infill vacant blocks spread across a number of high growth areas, for example, across states and suburbs. Or you could buy a number, say again,

two to four of existing standalone homes in high growth zones spread across states to minimise land tax impacts. Now, while still in this phase, once your available equity level exceeds 250 grand, you can then consider investing in further brownfield new build multiple home redevelopments in identified future high growth areas nationally. Once your current income producing nest egg net worth in property is at the level that will conservatively compound in value to reach your required income equivalent net worth target over your required time frame, then all you need to do is sit back and let time, the tenant, the tax office and capital growth work their magic.

As an example, let me share with you the broad brushes of my wife's and my best thinking on how we've approached our property portfolio accumulation and how we're rationalising our portfolio as we scale back our active work income. In the main part of our accumulation stage, our initial investment properties were secured in our joint personal names under the best tenants in common ratio for us until the tax benefits were exhausted and or the land tax thresholds were met. We then secured our next properties in independent trusts,

for example, using a holding company as a trustee for a discretionary trust and or unit trusts. As we moved into accelerate and accumulate, Remaining properties were secured within our self-managed super funds, including consideration of commercial office premises, to be held post-retirement in what's called the pension phase. This means we pay a maximum 15% tax up to this time versus the normal marginal rate of tax of somewhere between 30% to 47%, and then pay no tax at all on either the capital gains if we sell

or the rent if we continue to hold the properties. Now of course this is subject to any ongoing legislative changes with the strategy being reviewed quite regularly in the case of any changes We continue to diversify property purchases across growth areas, states and countries to offset property cycle location, value fluctuations and to minimise land tax impacts Let's now look at the final amalgamate, liberate and remunerate phase once you're at the end of your growth accumulation stage and your nest egg is of a value that will sustain your ongoing lifestyle income needs based on the five percent rule that i've been talking

about e.g to give you an ongoing passive income of 120 grand a year you need a net income producing investment nest egg of over 2.4 million and you then enter the final amalgamate liberate and remunerate stage where you need to convert your net worth into a tax effective ongoing cash flow to augment or replace your active employment income. This is where we switch from high growth investments to high income cash flow investments as the two are generally very different. It's what's often referred to as the transition to retirement phase and this may involve a partial sell-down of your property portfolio to eliminate debt, and then reinvest the proceeds into a mix of high-yield, low-cost share index funds, direct shares, and or high

dividend low-cost bond instruments. The mixed ratio of property, share index, bond instruments, super, and cash needs to be driven by your income needs and your sleep-at-night risk aversion. A good accountant and or a financial planner can assist you to achieve the right ratio balance to keep you both financially and emotionally comfortable. So once your net worth nest egg has reached that required level that will throw off the passive income to replace your active earned income, you just then convert your growth portfolio into a more protected higher yielding cash flow income portfolio that may come from a diversified spread of things like tax effective high rental income like townhouses units and commercial property shares and equities that give you dividend returns like higher yielding index funds and

managed funds you can look at bond returns or similar and have some interest on cash at bank or in term deposits. Post full-time work, you then simply structure your lifestyle expenditure to live off a maximum of somewhere between 4% to 5% of your income generating net worth. And you're now a fully self-funded financial freedom fighter. This way, you preserve your investment nest egg in perpetuity

and you can live comfortably and financially free for as long as your heart keeps beating. This also means that you'll have a sizeable legacy to leave your family or other parties or interests that are close to your heart. Now this is as difficult as it gets. Remember, if you want to break free and spend your time doing what you want with friends and loved ones, it's imperative that your investment strategy and your supporting tactics are simple, easy to implement and take minimal time to manage and monitor. I certainly have no interest in creating a job as an investment manager when I stop work. Also note that my wife's and my overall strategy is subject to ongoing review and advice from our accountant and financial planner

to ensure we're preserving our nest egg and optimising a tax-effective cash flow after we stop full-time work. To make sure that it responds to changing economic, investment and taxation environments. The key here is to ensure that you've grown your income producing nest egg to the level required to generate your required lifestyle income. It's then a matter of preserving the nest egg and then just living purely off its proceeds. This way, you can technically live forever because you'll never deplete your savings.

And you've also created a sizeable legacy that you can pass on to your family or other worthwhile causes when you decide to kick your oxygen habit. Now, I get very nervous when I hear some retirement advisors estimating how long your savings need to last based on how long you're expected to live. To me, this is very dangerous and very risky speculation. What if the magic elixir to everlasting life

or the elusive fountain of youth is invented after you've stopped work? You may then be forced to pray for voluntary euthanasia. but if you're purely living off the proceeds of your savings nest egg for example through rent dividends and interest and you never spend the nest egg itself then you never have to worry about how long you're going to live what a relief that is in my humble opinion if you want to create the freedom of choice to have the time to do what you want whenever you want this time-honored proven investment income for life growth strategy that i've talked about today is all you need to sum up the strategy in a simple sentence all we need to do is use as little of your own money

to secure as big an income producing asset base as you can as quickly as you can and make it as as affordable as you can and then just get out of the way and let time tenants the tax office and compounding returns grow your wealth and replace your income so you can continue to build your career and focus on your family while your team of independent professional experts make it all happen for you. This is the essence of creating the ultimate freedom of choice and time-release vehicle to do what you want when by building a parallel investment portfolio by remote control. Now when you say it like this it sounds simple doesn't it? Surprise surprise the strategy is simple. Simple to comprehend, but not quite so easy to do. However, it's the degree of

careful and exacting implementation of all the required interconnecting cogs that will either make your investments run like clockwork, or grind to a screeching halt if something is left out or assembled in the wrong fashion. This is similar to the difference between a long-lasting, self-winding, handmade Swiss crafted timepiece and a battery operated two bulb watch that gives up the ghost in about two months. Now I can hear you scratching your head questioning but hold on Bushy every other investment guru I've come across tells me that I should invest in either shares or property but you're suggesting I invest in both. Why? Yep shock horror. I believe a time and a place exists for investing in both shares and property. Yes, I'm an architect with a childhood passion

for all things investment in property. And over the last 35 years, this has led me to increase my skills, expertise, and hands-on experience in property investment via property management, real estate, and finance broking. And yes, our company Know How Property Finance Strategy specializes in property so that you would expect me to favor property. And to some extent, this is true during your nest egg growth phase, because I've built my expertise in business around helping others to enjoy the same time freedom that shares and property has given my family. But this is only part of the story, because it's a matter of horses for courses. You see, for me, it's not a shares versus property or argument, but an and then discussion. It's just a matter

of what is most appropriate and when, based on your situation, based on your circumstance, and based on your comfort level. The cold hard reality is that over the long term, shares and property perform very similarly and outperform other investment categories in terms of value growth. As I've already mentioned, growth is what it's all about initially in the net worth accumulation phase. Income from rent and dividends comes later,

when your net worth is sufficient to convert to the cash flow income preservation part of the curve. So it's not a matter of investing in shares or property, It's about doing a combination of both to suit where you're at on the capital growth to cash flow curve, how much you can afford to invest, and what your risk appetite or sleep at night factor is, and what you actually feel most comfortable with. And once you're clear on this, the when to invest becomes really easy, because it's every time that you can afford to.

Stop using the constant scaremongering of the popular press as an excuse as to why you shouldn't start investing now. the perfect time never exists so if you're a contrarian like myself adopting a long-term 20 not 10 to 20 year investment horizon market dips incited by short-term bad news actually create great times to buy and now is a great time to do exactly that again one quick disclaimer here or the usual butt covering i need to stress again at this point that i'm not a financial planner or accountant. This means I'm not licensed to advise you on investing in the stock market or related investment vehicles. So you should seek the advice of a reputable financial planner, stockbroker or

accountant before deciding if and how to invest in these sectors. I'm merely talking here from the point of view of my own personal opinion based on what's worked for me and others that I know. So while my book The Freedom Formula gives you the key principles and processes to successfully invest in property, if you're looking for more clarity and confidence on how to invest in shares and equities in all of its myriad forms, today's guest, Danielle Acuye, is your perfect compliment. Danielle has been actively involved in the share market for four decades. Beginning her career as an equities analyst and advisor, she held senior roles in large investment firms in both Australia and the UK. And for the past 12 years, she's been a private investor

where her main income is derived from her own investments. She walks her talk. Danielle has recently published her best-selling book, Shareplicity, A Simple Approach to Share Investing, which is the share equivalent of my property book, The Freedom Formula. And together, you have the complete guide to safe and affordable investing across shares and property. Danielle has distilled her years of global share market experience

in this handy guide to share market investing. In Shareplicity, she takes the complexity out of share investing, explaining concepts simply and in plain English, and she gives you go-to steps to help you start or improve your investing. In this respect, Shareplicity is a great way to better understand share investing basics, as well as the changing dynamics of share investing that we're now going to experience during the upcoming extended period of lower for longer interest rates. As I hear about a lot of first-time investors jumping on the share market bandwagon at the moment without any clear understanding of what they're doing, shareplicity is very timely and it's going to give you some great insights on how to manage the challenge of the opportunities and risks of investing in times of radical uncertainty moving forward. One of the most challenging aspects for share investors is coming to terms with finance speak. You know, all the jargon used

by the professionals to analyze and differentiate different shares. Shareplicity explains these complexities of share investing in very simple, easy to understand ways. The book will guide you through essential investing concepts with understandable examples and explains how to make more informed investment decisions. And shareplicity is not only a good launch pad for you if you're a new investor, it's also for you if you're an existing investor. Given the substantially changing times we're experiencing, Shareplicity delves into some of the major themes and risks investors are currently facing. It explains how you can future-proof your share portfolio in the coming prolonged low interest rate environment by identifying the major risks

and the opportunities. The book also provides you with clear pathways on how to invest for wealth creation and income generation, what avenues to pursue depending on your knowledge and level of involvement, how to save and create a share portfolio that works for your age and risk profile and what are the traps to increasing your investment profits and returns. Using her great book as a guide, our discussion today reveals great answers to many of your share investing questions including where do you need to start with share investing and what steps should you take, what are the biggest mistakes that most equity investors make, what makes a winning share, how should you decide which shares to buy and how can investors build the best portfolio to suit

them. There's no doubt that at the time of recording this episode, we're living in unprecedented and uncharted times for investors, as we continue to work through the ongoing challenges that have risen out of the recent pandemic. However, the themes we discussed today and those that are outlined and reinforced in both of our books, The Freedom Formula and Shareplicity, still hold true and they've both profoundly passed the COVID-19 test. If COVID has taught us anything, it's not to become complacent with our money or our investing and with great change comes great opportunity.

So if you want to profit from the mother of all investment opportunities and the rare once-in-a-generation window of opportunity that's going to emerge from these times, then grab yourself a copy of Danielle's book. I found it a great, easy and engaging read In the meantime, enjoy this great conversation with Danielle Ikuya Welcome back Freedom Fighters

Now in recent weeks I've been fortunate enough to be involved in the National Money Debate Summit where a group of industry leaders in all things money have been debating hot topics as a way of stimulating open discussion And on the topic of whether it's possible to time the property and share markets, I was lucky enough to team with Danielle Acquier of Shareplicity. So I thought it'd be great to deep dive with her here on the podcast. So welcome and let's get invested, Danielle.

Thank you, Bushy. Thank you so much for having me. Yeah, I really enjoyed our discussions we had during Money Debates. And I know that you've recently released a great book, which is very timely for what's happening in the interesting world that we live in. But before we dive into any of that, can I sort of get you to talk to us about who you are, what you do, and why you do what you do? Wow. Okay.

Well, how would I define myself? I'm probably many things. Professionally, I've been a stockbroker at an institutional level, which means dealing with big clients. I have also pursued a pro bono career while I was bringing up my son, which took me in lots of different directions I am a mother I have been an absolutely avid golfer in the past and I got to single digits so that was or single figures which was very exciting I'm passionate about art I'm passionate about gardens and I am very passionate about really just continuing to

engage with life and continuing to learn and I believe in never really giving up Yeah, love it, love it. So in terms of what, I mean, you've just published Shareplicity and I'm assuming that there's sort of a business built in and around that where you're helping people with what they're doing in the share market. Why are you doing that? I think it's a personality trait. I can't help myself.

I keep on wanting to do things to help people along the way. uh basically shareplicity came about because i made a conscious decision to give up my career which was a very significant career to have my son around uh 2000 and uh when i returned to australia from london i also made a conscious decision not to go back into the stockbroking industry and I decided that because I would never see my son and as far as I was concerned I was brought up by a single mother because my dad died when I was very young and I didn't want my son to be what was you know we turned a latchkey kid and in giving up my career once he got old enough I decided that I had this wealth of knowledge about share investing

that could be applied into something that I've always wanted to do, which is actually to write a book. It's been something that's been on my horizon for many years, but probably a few life changes had to take place to put me in a position where I not only had the courage to do that, but also the conviction. Yeah, yeah, it's interesting how life steers us in those directions. You've started to touch on some of your background,

background and I'll come back to some of the comments you've made on that but I'd love you to sort of take us in detail on your journey from as way back as far as you would like and talk to us about where you've invested your time your energy and your money and some of the challenges and successes you've had along that road and how that's led you to what you're now doing okay um I love art and when I was going through school um I was probably one of those fortunate people that at a school level was talented both in fine arts but also had a mind that was very much disposed towards the sciences and maths. I'm not saying I was a genius or brilliant at any of them but I had that flexibility to flip across and I made a conscious decision

when I left school to actually give away my passion to possibly be an artist or a graphic designer or an architect and I decided that due to my family circumstances in growing up I wanted to be more financially independent as a woman and I made a conscious decision to go to university and do a commerce degree and the reason I took a year off school because I was pretty burnt out after the HSC and I worked in a clothes shop and a delicatessen in fact I've pretty much worked since 14 years and nine months like a lot of kids did back in the in the late 1970s and I worked out pretty quickly that even though I did a great job particularly in the fashion shop I think I doubled or tripled sales during the early 80s recession that this was not going to

be my lifelong vocation so the decision not to go into the art sector but to go I suppose into a more financial sector and do commerce would give me an opportunity down the track and that's basically what happened after I did a commerce degree I was afforded an opportunity to interview at a stockbroking firm here in London and that's when the career started. Okay and very interesting because you know there's a lot of similarities I was the same I was always a mad passion for art but found that sciences and maths and all the rest of it intrigued. I actually became an architect and then gave it away after 17 years in the profession because it didn't make enough money.

Yeah, quite. And ended up working seven days a week, 14 hours a day for very little and then switched across into the investment arena. So it's interesting that you were smart enough to recognise at that early stage, I guess, that lifestyle is important and there's no point pursuing your passion if you're going to starve on the vine in the meantime but use the joint talents you have across them

to probably be creative in the investment space that you've been in, I'm guessing, if you've got that bridge between the left and the right brains. Absolutely. My largest client in London who is now a dear friend of mine, she always used to say Danny is my ideas person and um i'm i'm probably only now starting to discover a how entrepreneurial i am b i've never really fitted into big corporate bureaucratic situations i'm a very free thinker and funnily enough i've realized over time that i can apply all that wonderful creativity that my little brain

has and employ it in the space of investing. But interestingly enough, Bushy, I always revert back to seeking out the best quality information wherever I can find it. And by definition, then I become a bit of a nerd when it comes down to reading stuff that is probably more science based or yeah basically trying to understand new technologies etc etc so for for a girl or a woman um it's it's probably a little bit unusual yeah very and and and to make that decision one to do the commerce degree and then to flow into uh the uh equities sector uh particularly when you know predominantly and i'm guessing at the time you you started it's back in the 80s when It was a very male-dominated fraternity.

How did you find that? Because I can imagine that would have been quite a challenging environment to survive in and thrive in, for that matter. As I said, actually, the other day to someone, I was so blessed that my first job in Australia at BCW, Barclays de Zoot Wed, um i had a wonderful head of research who really did not differentiate as far as i could tell between um you know the fact that i was a woman versus you know the guys in the office we had a great boss at the top of the organization who was english and who i believed very much had a different approach to hiring women in fact he actively started to hire more women and at the time it was really interesting because it was a time of great change not only in the

industry with what was known as the big bang which is basically deregulation in the finance sector in the UK but it was also women were being embraced in the finance industry and I was fortunate enough when my major part of my career in London I worked at Baring Securities which of course is very famous for going bust with nick leeson and that boss as well was incredibly um he very much had a meritocracy he he we i described it as having a dealing room floor with 300 people which covered global emerging markets so you can imagine the diversity that we had there not only in terms of the people and where they came from uh but also there were a lot of women and our our desk and the Asian desk in London was 50% women. And the women were actually, dare I say,

incredibly successful, probably more successful than the men. And we just struck it lucky because I have experienced over the years clients that were not so predisposed towards talking to women. And I still see it in Australia that there is, in my humble opinion, a very blokey club that exists in the stockbroking industry and uh you know having been a big part of it particularly um in the late 80s and 90s and over in london which is one of the biggest financial hubs in the world it's it's something that i'm glad that i'm doing it from the perspective of writing shareplicity and helping people that way rather than having to go back into that doggy dog alpha testosterone stump the gorilla chest type of environment because i just don't have i really

i just have no interest in it anymore it's like you know i i just can't be bothered i'll just walk away if somebody wants to do that yeah no and good call and i think uh unfortunately uh the the the types of alpha males that would be swimming in that pool would be fairly threatened by someone of your ilk that has those skills. And you're right, I think there's no question in anyone's mind that the female nurturing nature is capable of multitasking and handling multiple pieces of dynamic information far better than men who are generally focused on one thing

and doing that very well but not coping with the dynamics where the environment you're playing with, with the amount of information that you need to collate and make quality decisions on in that stockbroking space would have, I thought, been much more attuned to your style and approach. Am I right in saying that? Interesting. No-one's ever said it.

And it's really interesting because that's actually what it's all about. We used to receive tomes of research that would literally clonk on the desk every day. and I used to watch there's quite a funny story here I used to watch some of the guys sit there summarizing it for hours on end and meanwhile I kind of be whirling through it and I did I was an analyst so maybe it was easier for me to try and pick out information that I felt was relevant to making providing good advice to the client but I'd be watching these guys writing these notes and I'd be on the phone and they're still writing their notes

and I just couldn't work out what on earth they were doing and they'd stay till 7 o'clock, 8 o'clock at night still writing notes. Meanwhile, I'd taken research home and I'd say, like, I've had enough now, I'm exhausted, I'm taking my research home to read it. And the funny upside of all of that, Bushy, was that when I actually left Bearings and back in the 90s, when we called a client, it was logged on the computer, So they logged every single call that we made and they knew exactly who we were calling and how long we called them for.

And I had smaller markets when I was there. And so I wasn't doing Hong Kong or Singapore. And the funny thing was when I left and they were very sad, they said, you do realize that you called clients more often than anybody else on the desk. And I went, really? I had no idea. So it does show you that there was a different disposition to the way that I handled the work, the information and it is a skill set I think being able to cut through reams and reams of information that come our way each day and actually decipher what's worth listening to and what isn't. No question about that, 100% agree. I just want to circle back a little bit because you sort of mentioned

that when you came back to Australia with the view of dedicating time to your son given the experience that you'd personally had with your single mum that you decided to give away the market. I'm guessing that there may have been some relationship challenges around that time that were also influencing that. Can you talk us through what was happening in that time and how that made you feel and think and influence the decisions that you then made from there?

Yeah, so basically I divorced. My son's father and I got divorced. He's English. And he was happy for us to move to Australia, so I took my son to Australia because I decided if I was going to bring him up pretty much on my own, I wanted to be around my mother and my stepfather. and um yeah that was a very challenging relationship for many many reasons and suffice

to say that um you know probably my ex-husband wasn't one that could probably cope with a very successful wife let's just leave it at that and um i made a conscious decision not to as i said not to go back into the industry because uh in my opinion it was an easy trade-off so the trade-off was Bushy I go back into the industry and I make big money again but I only see my son when I go on holidays and I'm exhausted most of the time and I have to pay for expensive child care and I thought well I've got this beautiful beautiful young son why have I had him if I'm never going to see him except for a luxurious holiday in Phuket or Bali so I had to basically when I moved home, I made a conscious decision with all my assets, how I invested, how much went into the

house, how much I had to live on. And I basically said the spending that I did in the 90s as a very high earning stockbroker, even though I earned a lot, I mean, I saved a lot. I said that has to stop. So I completely changed my whole life and probably, you know, went into the eastern suburbs of Sydney in one of the best private schools going, I'm just going to ignore all these people that keep on showing off with their big diamonds and their big cars because I can't compete and I don't want to compete and I want to be the best person I can in this part of my life, which was being a mother.

Talk us through from there because that's a courageous and a brave move and fully reward you for making that decision to really put time and energy into your son because there's a lot of people who don't. They chase their own career at the expense of their family often. Where did that lead you to? Because that sounds like a fairly watershed moment in terms of, right, I'm going to live life differently from here.

Where did that lead you to and what did you do during the noughties as a result of that? Right, so I'm a pretty big reader and I'm a big believer and we all just keep on reading and absorbing information yada yada so i actually got involved um in um i read a few books on on the science of climate change and i actually started an ngo um on climate change awareness in 2006 which also involved uh me because i teamed up with the wwf the worldwide fund for nature not the wrestling i became what is called a governor and that's basically a pro bono position

to assist the organization in awareness and fundraising etc and suffice to say i also have a passion for forests um i have a a a passion for creating a sustainable future for the children and I became involved with one of the first campaigns against the guns pulp mill in Tasmania. I wrote one of the original letters to ANZ Bank about the reputational risk associated with funding such a project and at the time it was fairly groundbreaking. But of course now it's just, you know, you look at Rio Tinto and AMP

and all these big companies and what they're going through now and it's it's far more prevalent and all that process actually from the NGO to um you know I started hosting big events for 100 plus people and I I was very proud I had a lady called Elaine Pryor who was at Citigroup and on the institutional side and she was one of the first analysts in Australia to do work about corporate Australia and climate risk so again all this work is now being very much embedded in the finance sector but 13 14 years ago it was very very new and that led me on to um so this was kind of my outlet to continue to use my brain interact with the world in basically a pro bono position and that's kind of kind of what i did um for many years and it

It moved from the environment to unfortunately having to deal with local issues around where I live. Okay. Did that lead you into your stint into the political arena by standing as an independent? Tell us about that. I got sucked into that one, running against Malcolm Turnbull on a climate change ticket.

It was the whole time of the pulp mill and don't pulp Malcolm. and I had a very brief relationship with a chap called George Newhouse who was running against Labor and I can't tell you, the whole thing just turned into a complete and utter exhausting circus and I was very proud because I got a whole 1,000 votes. How did you find that? I mean, having had a little bit of a taste of the political arena many years ago and couldn't get away from it fast enough given the uh i just didn't like the whole

culture it was very backstabbing very superficial i found generally how did you find it danielle well it was it was actually worse than that i mean attack the person that's exactly what they came after they came after my personal situation um i actually it was very nasty bushy i had an attempted break-in at the back of my house i had my car kicked in um i received huge huge media um which was incredible and i got lots of fabulous platforms to speak on the issues um but it was bruising i probably was one of the people that did the first online campaign so i created a website for Danny and I blogged every day and uh it it just wore me out um you know I said never ever again it was it that whole thing of just attacking the person rather than dealing

with the issues I just found absolutely vile and said no I think there are better ways to possibly create positive change in the world than trying to destroy yourself in this way that's a that's a good way to put it because it is relentless and it doesn't matter what you do there's as many people as hate you as love you and I find it a very very grueling sort of arena to be playing in but talk to us in parallel with that given your you know professional interest in in the stock market I'm guessing that from a fairly early age you were an active investor in your own right can you take us on your investment journey in terms of what you first invested in and why and how that's progressed over the years? Okay. So my daddy passed away when I was very young and

left some money to myself and his ex-wife. And my mother used the interest on that to live for most of the 1970s. And then when I was old enough, I received that money. Although over that time, I had actually bought a horse and a saddle because I used to go down to the Southern Highlands and go riding in the holidays because mum was working and eventually sold that for a sewing machine because that was far more practical than the horse and the saddle. But when I started working at BZW,

there were two very exciting things that I, well, the three investments. The first share I ever bought was called Sarich and that was the Orbital Engine Company that was developed by Ralph Sarich out in Western Australia and it went spec tech. Well, it didn't work. It basically overheated but it was going to replace all the world's combustion engines.

I managed to buy a few shares, made 25% and sold and thought that was great. I'm out of here. Well done. And then the first thing that I bought was a Mazda FunTop car which was extremely exciting because prior to that I'd had my mother's old 323 Mazda that I'd had to buy off her and the fun top was definitely the car for a young professional woman around town except that I made a fatal mistake I bought it I got talked to talked into buying it on lease

and when I packed my bags to go to Europe after about three years I found out that I hadn't paid off enough of the lease and I still had a residual value owing. And of course, I've never touched car lease since. The other thing that I did was I bought my first apartment and I've been quite fortuitous over the years to be able to buy into a property market when it was down. And this was after the 87 crash when the government was trying to stimulate the economy. And I think there was a lovely first homeowner's grant or some incentive and sure enough I jumped on that and did quite well. Awesome and where did that lead you to so you made some money on that you did did okay got out of the right time in the shares where did that go? Yeah well I actually packed my bags and

I went to Europe that's another long story and I ended up in London and I then got a job working for a company called Macintosh so I had resigned from BZW and Macintosh was very famous in the 80s and the 90s and eventually they merged with Merrill Lynch and I worked there for a year doing Australian equity sales to major institutions and then I got an opportunity to go to Barings and it was at Barings Securities so I by this stage was starting to carve out a position in Asian emerging markets it seemed to me like i i was doing quite well i think it was around 1993 and again there was wonderful uh tax incentive that the british government had put in to help boost the housing sector and i bought my first apartment in london off the new kings road in

fulham and uh that really started my pathway to saving for the next 10 years in property in london Okay. Okay. And your ongoing involvement in shares personally? Tell us how that journey went. Yeah. So, okay. So, one has to look that when you are involved in the share market and it is your salary and your bread and butter, I decided that I wanted to diversify my asset base away from shares. Okay. So, when I had a bonus, I paid off the mortgage and put it into property. I didn't go out and buy a ton more shares because my job relied on the share market. However, I did invest in the UK. They had these very efficient tax product called PEPS and you

could invest in shares in unit trusts investment trusts up to a certain amount and I really was a very voracious saver so in between my pension fund which I had no choice I could choose the fund where it went but the money would go into equities and then the peps I did but apart from that I didn't actively do much investing on my own behalf except from saving it in property and I just kept on paying off a mortgage and then buying a more expensive property, taking on more debt and then paying off that mortgage. So I kept on moving up the value chain, saving that way because my work was shares. So if I put everything into shares, it put me in a very vulnerable risk perspective how

I saw it. Yeah, no, it makes absolute sense. So, rolling forward to back in Australia, you've gone through the interesting and fun challenges in the political arena and survived with the scars. That sort of gets you into the late 2000s. Tell us about the rest of the journey from there that sort of led you to come out with Shareplicity. Okay. So when I moved home, I'd lost a lot of confidence, and I went through a number of investment advisors, fund managers, which was part of that journey up until late 2007, 2008. And it was after that election, and funnily enough, this is a really, I think your listeners might find this amusing.

So here's this kind of, you know, if I said I was aggressive, I don't know. this woman standing up at the Perpetual AGM and Stephen Mayne is there and I think there's a whole lot of protesters somewhere outside and there's television cameras outside and we're in the Western Hotel in Sydney and I get up to ask the Perpetual Management or the Board of Directors about their investment in guns. And, of course, I was promptly told to disappear and sit down. But the funny thing was, Bushy, I'm sitting there because I could be there

because I was a shareholder in Perpetual, the guy who managed my money. I had a stake in it. And I'm sitting there and I'm listening to these guys chatting away and they're talking about how they have exposure to CDOs in America, which, of course, precipitated all this terrible mortgage-backed securities that almost brought down the global financial system in the GFC. and i'm sitting there going oh my god first thing i'm going to do when i get out of here apart from being interviewed by the media and guns is go to my fund manager and i said sell perpetual now and

he's like why what are you talking about i said they're full to the gunnels of all this rubbish that's come out of america oh he said anyway the long and the short of that story was as i pretty much sold at the top of that share price to this day. And it was around that time that I decided that, A, I was starting to say, right, I think I can manage my own money. And anyway, I had a disagreement with the fund manager because I wanted to sell everything. He said, no, you ride out the market cycles. I did sell. I saved about 25, 30 percent on my portfolio because maintaining my capital was incredibly important because I did a great job well let's dive in there because that takes again that takes a fair bit of courage uh to be and I know you've been very active in

the industry so you've got way more knowledge than the average punter when it comes to that but standing up against your advisor who I'm sure would have come pretty well credentialed to be to say, well, that's all good, but no. Two questions, I guess. The perpetual decision is obvious because you became acutely aware that they're investing in rubbish. But to go beyond that and say, right, I need to cash out here, what were your antenna telling you because it's almost intuitive to be able to make that call and survive the chasm that then followed. Talk to us about what you were thinking, feeling at that time. Well, I felt very vulnerable, probably like a lot of people did, although I was a little bit

ahead of the curve. And I guess I was fortunate enough, I had my best friend, ex-client ringing me saying, put all your money in HSBC, it's the strongest bank in the world. And I think probably what people don't realise is how close to the edge the world went to financial meltdown at that time. and we can all sit and laugh about it now and I watched the big short the other day just to remind myself because I think it's really important when the music's playing to remind oneself of when the music stops and you know banks were going under around the globe including Macquarie Bank that was the reason why Kevin Rudd had to come in and actually support the Australian banks. And my position, Bushy, was like I needed to protect my capital. And I think this is where

people get confused between different life stages when you're investing. So if you are younger, so in my younger years, I may not have been quite so paranoid. But because I have a seven-year-old Sun and I knew that I had to make the money work for X amount of years, it got to the stage where I thought I'm prepared to take the 25% hit. But my view is this has a lot more downside. I happen to be right. I did protect my capital. I did take losses. But the one criticism of maybe how I handled it post that is that I didn't get back into the share market quickly enough. But again, That's a good learning lesson about how you manage risk, you know, in these types of volatile situations. So let's roll forward to the rollercoaster that occurred with COVID.

Did you handle it differently at that stage in terms of your own personal exposure? Oh, gee. So here's the book. We really raced the book through, right? And the book's important because anyone who reads it, you may have a little giggle to yourselves because I actually finalized all the share prices at the top of the market that went to print in the book. And I remember at the time I'm writing, I had written, share prices are quite stretched at the moment. So if you're looking at buying, do so during weakness. Of course, I was, like probably a lot of people, a little bit too asleep at the wheel in terms of the threat that was coming with the pandemic because we've had, you know, SARS and we'd had Ebola and they'd all been contained.

And I think a few of us were lulled into a sense of security. um the long and the short of the story was is that i started taking profits pretty early on and locked them in um i probably took a little bit too much cash out but when i realized that the what worried me the most was is the fed came out and started to say right we're going to support the system because you this was actually um the sharpest sell-off in share prices that we'd seen for you know since 1987 there's a whole lot of statistics it was a very big global sell-off because some people big players had leverage in the market and the problem is is when you borrow to invest and things start to fall as you know bushy everyone becomes a forced seller yeah and

And so, literally, the baby in the bathwater goes out. That's what happened in March. And when the Fed finally said we're going to come in and buy all this corporate debt, this high-risk junk bonds, that's what's turned the market. And I wish I'd bought exactly on that day, but I probably started investing a little bit after that. So, again, it gets tricky because I have this thing between keeping enough cash in the portfolio for these drawdowns versus always having to remind myself that there's nothing wrong with taking some profits along the way. My good father used to say, you can't go broke making a profit.

So, that's absolutely exactly right. Yeah, okay. Well, let's sort of jump into Shareplicity now because we've sort of started to touch on it. Why did you write it? Who should read it? And what are some of the key messages that readers can hope to take away from it, if you don't mind sharing? Yeah, of course. Not that I want to scare investors, but you do get this situation, and you've seen it recently, where there's a lot of great new investors coming into the market. And there's an expression, stonks only go up, which is a slang term for shares.

and what always worries me the most is that I'm a passionate advocate for people investing, taking control of their financial future but I want them to do it in a way that's not going to blow up all their savings and Shareplicity is very much designed for both new and existing investors. It is a way of understanding share investing. I take all the jargon out of the industry. I describe what to look for when you buy shares, why you buy shares, what benefits they have and how you can grow wealth over time, as well as how to put share portfolios together. Because with the best will in the world, when you go to a barbecue and somebody says to you, oh, mate, have you got some afterpay or have you got some zip

or I've made so much money on this share, everybody should have warning bells going off in their heads because that's not investing. That's basically taking a punt, gambling, whatever term you'd like to use because with anywhere where we invest in shares, and you have to remember a share is purely a share of a company. so if you can't have your own company that grows well you can participate in the ones that are doing it well and it's it's it's that thing that people have to understand that real wealth can be

created over time it's just not an overnight situation so i guess i wanted to help people increase their financial literacy and hopefully start them on a journey where they can save more for their futures yeah that's sums it up pretty well uh well if and there's a lot of people that have been jumping on the bandwagon now it's the old story it's sort of almost gold rush territory in in recent times and then you've got all the robin hood robo advisors sort of amping up the uh the volume of activity there but uh for someone who's coming into it where do people need to start with with investing in the stock market and what steps should they take initially what apart from reading the book exactly exactly right i i think it's it is quite tricky

for people because there's a lot of information out there and there's a lot of noise and there's a lot of experts and i always say when you when you let's say you watch osbiz or you watch spotty these are these new online content streaming, you know, Koshi does Ausbiz, and they tell you, you know, these experts tell you their views on shares. For the average investor or the newbie to the market, what they don't understand that each of those experts has a different disposition to how they put money in the share market. And that's something that takes a little bit of time. So the best advice is really one has to do some reading, try and understand the parameters around, put some boundaries around what you're trying to do. Okay, how much money do I have to invest?

How often shall I put it into the share market? And am I going to be one of those people that really don't want to look at it too often or am I going to be actively involved? So the most important thing that everybody needs to do is set out a plan for themselves of how they envisage this going forward. And once one starts to do that, you can start to put some meat on the bones in terms of whether you go down the avenue of more passive investing, as we call it, which is through managed funds or exchange traded funds. or you want to be more actively involved and be one of those people that listens to Ausbiz or Spotty or you read the AFR or you look at Livewire online or you subscribe to a service. But like most things in life, Bushy, you know,

you can't learn to swim unless you get in the water and share investing is the same. You really at some point need to take the plunge but I always say do your research try and get some knowledge and maybe start in a simple way as in buying a fund or an ETF to learn to get accustomed to how share markets work yeah I like that and given that you know a lot of hard-working Aussies are extremely time poor I often say that you should be investing in something that matches the time that you've got available to manage it and And therefore, those sorts of opportunities like ETFs and index funds, which are, you

know, sort of mirroring the action of the market and sort of have some built-in diversification because they're effectively representing the whole market, not just individual companies and stocks as a consequence is probably a safer way to sort of enter into it and start to get a feel for how that works. But the biggest challenge, I think, both in when to buy and then, more importantly, once you are into the market, holding the course when bad news, which travel extremely fast, starts to affect our emotions and our mindset. What advice have you got to the listeners in terms of how to manage what's between the ears as far as investing is concerned? It comes back to your personal situation, unfortunately. But look, the bottom line is, is if you've still got cash like I do at the moment, and it's a good example to use me, whilst I put money back in the share market in April, I have not deliberately moved up to my full weightings.

And so when I say weightings, it's like if you have $10,000 to invest, you could put $5,000 into one or two ETFs, and then you could put $1,000 each into five different stocks. so in in that scenario you might decide that you only put in half the amount and you wait for the market to fall and then you add more to it people become usually um find it very hard when they a don't understand what they're invested in and b if they have borrowed to buy so the first point is if you understand that you've invested in a great company or a great group of companies that have long-term growth potential then you should be able to look through this volatility and we all have to believe that the end of the world is not nigh the second point of what i was saying is is i'm not an advocate of borrowing to buy shares and i think that's what we've seen a

lot of recently it's either leveraging up through options which are very they are for very very in my opinion institutional investors but you've even seen soft bank the the big japanese giant possibly coming up unstuck by their options bet on the big nasdaq stocks so you know apple amazon netflix and tesla um and for me margin loans borrowing to buy shares um is is very risky so if you understand what you've invested in and you you come from the view that over the longer term shares have outperformed as in if we go back to 1900 according to marketindex.com.au so your listeners can actually look it up the australian share market has returned 11.8 percent per annum on average over that period bearing in mind that the companies have changed the indices have

changed. And that constitutes dividend income and what we term a capital return, which is the capital profit on the shares. So one goes into the markets with the view of, do I put all my cash in now? If I do, do I have more cash down the track that I can put into either my ETF or my managed funds or my shares should the market pull back? And then usually that's the best way to handle this volatility but you do have to have a fairly good understanding of whether you are as the book describes uh invested in in shares that i call sleep well at night shares quality shares the ones that we have a high degree of certainty because of certain characteristics that they are not going to go bust and they are going to perform over the next five years well something

I wouldn't mind just sort of diving into a little bit there as well because, you know, you hear some of the industry commentators talk about the fact that the market is now driven as much by sentiment which is then amplified because of the auto trading that occurs as a consequence of that versus the fundamental performance of a particular company. What's your feelings around that? i think i think the the algo trading things that's been around for years and years funnily

enough in this cycle it's been really unusual because a lot of the fund managers the professionals have not played a part in this rally in the share market since march it's been the retail investors um the biggest driver in asset prices and you would know this bushy has been the long-term decline in interest rates over the last 35 years, or since 1987. And it really doesn't matter. It's across a number of different asset classes. What we had recently was, I guess, a mixing pot of circumstances from the Federal Reserve pumping in five times the amount of money into this crash than they did in the gfc so just try and get one's head around that it's huge stimulus that feeds away into asset prices plus then people get their stimulus checks both

in america and australia and plus people have been sitting at home they haven't been traveling and they get bored and they want to put their money in the share market and you can see that this whole push has been what we call liquidity, which is basically a wall of money trying to get into too small, you know, threading the needle. So what's your feeling as we move forward then? Is it some of that starts to dry up? Are you seeing a potential drawback or drawdown

that's going to come into the market as a consequence? No, because I think that the world is in a position where they still need inflation. And for many, many reasons, there is more deflation than inflation. And the Federal Reserve, the Reserve Bank of Australia, every major reserve bank around the world has made it very clear that they are going to pretty much, particularly the Fed, keep interest rates very low for a long time. I don't think the few people that might have blown themselves up over the last week in the tech shares, I don't think they're going to drag the system down. but hopefully they've been scared enough to realise that shares don't go up forever and leveraging into the share market is maybe not the smartest thing to do.

Absolutely. And I totally agree with you. And when the Reserve Bank Governor says that they will do whatever it takes and we're in a position where, you know, even after this massive spend we've gone through, where our debt to GDP ratio is still down at 50%.

So there's some fairly deep pockets that we could still go into yet compared to the states. It's, you know, virtually double that exposure. We're in a fairly safe position and with, you know, the Reserve Bank again saying that rates won't go anywhere for at least the next three years and probably a lot further and beyond that, then that sort of augurs well for what's likely to happen in most asset classes actually.

so tell me uh jumping in then into uh some of the key mistakes that you you see investors make because and you would have seen some do that in recent times can you sort of summarize the major ones that you see yeah um not taking profits not selling what we call the losers that's i'm going to say perpetual don't hit me anybody we could put amp in there we could probably put nab in there um thinking something that can go up forever um definitely is not happening um costs in investing is incredibly important um everybody should look at the cost of the financial product that they're investing in um always maintaining it's an expression know yourself so you need your boundaries and some discipline and um three three things that

i'm very very um wedded to is that we're living in a very changing world and i think people as much as they don't like change they need to be receptive to it and even though time is poor it's it's all about priorities um you know rather than watching the next best netflix thing even if you're tired sometimes picking up an interesting book or reading an article educating oneself I think you can never go astray absolutely now one of the things that and you would have heard this discussion yourself at times I'm sure but there's always this ongoing battle of whether hardworking Aussies should pay off their home loan first before investing or start investing early what What are your thoughts around that?

Yeah, it's really interesting because obviously when I paid off my mortgage, interest rates were a lot higher. So it was a pretty easy, you know, black and white decision. My friend is about to get a first-time owner's mortgage. It's 2.19%. I mean, it is so low. I mean, you're the property expert, Bushy. But if you were theoretically to do the numbers, even though the returns in the stock market are going to be lower than what they were historically, they're still going to be higher than paying off your mortgage. So I don't think it's as clear cut anymore if you have the cash flow to support the mortgage.

What do you think? Well, I guess my view is – I mean, I've done the numbers. In my own book, The Freedom Formula, I actually did a direct comparison between paying off the home loan and just sticking money in super versus in exactly the same position putting money into a mix of property and shares. And if it's structured the right way, the sort of interesting part about it is that you can use your investment portfolio to retire your non-deductible home loan a lot quicker. You keep more of your tax money in your pocket because if it's structured the right way, then the tax office isn't taking so much away. And then if you've invested in growth assets

that are performing better than the average, or even if it performs at the average, both in shares and property, and both of them, a great statistic you quoted earlier around the 11.8% since the early 1900s, property's very similar. if you look at its performance well both of those assets if you if you do that over a 20-year period

then you're the retirement income you're going to end up on if you pay off the home and just rely on super is going to be around about 30 grand versus 120 odd grand if you were just very conservatively invested in property and shares over the similar time frame so i guess nothing much just changed in that regard so i've certainly personally an advocate of investing early, providing you do your due diligence. And I'm not suggesting investing anything. But it brings me to an interesting point, actually, because, again, you would have heard this a lot in the share market.

The old discussion around investing in index funds and ETS versus actual stock picking. You know, you hear, I've heard all the quotes of, you know, the advisors, only 0.1% of advisors ever beat the index. And I think in the Australian context, that's less than 10%. So what's your view on investing in an index which represents an index or a market versus individual shares? Yeah, again, this is something that I drill down into the book because it's really, really

important. And you're absolutely right. One of the reasons why ETF products have done so well, because there is the view that active fund managers, stock pickers, have not been able to outperform an index over time. listeners need to understand what does outperform mean it basically means that if you're an active fund manager like um you know probably where some people super is sitting um they are trying to perform one two percent above the index and um so if the share market goes up five percent they give you seven percent what sometimes i think is very misleading for investors is that it works on

perversely on the downside. So let's say the share market has a bad year because share markets don't go up consistently every year. And the share market goes down by 10%, let's say, and the fund manager gives you minus 8%, you're still out of pocket and you've been charged costs on top of that. My view is when you structure a portfolio, I'm quite predisposed towards a mix and match scenario and what i mean by that is you can buy your index funds which will not have the same share price volatility i.e they won't they won't go up by 35 percent really quickly and they won't fall by 35 percent um classic case in point um is probably the buy now pay later shares in australia and in america everyone would have heard about tesla it's rocket run but you know it's off 30

percent in three days for various reasons so if you buy uh an index it'll just kind of it'll it'll go up and it'll go down but you won't get those huge that huge volatility i say to people that's kind of the the bedrock of a portfolio um and then you can which you get more confident you can add some shares to it and why do you add the shares is because you want to add a little bit of growth to get a slightly higher return but of course it's all about asset allocating you don't just put everything in that direct share investing into one share but clearly share markets over time are being driven by an ever fewer amount of top performing companies well i mean if you listen to you know the uh warren buffett who everyone sort of idolizes uh given his performance over the last

60 odd years uh i think his classic quote is that uh diversification is a protection against ignorance and if you know what you're doing then you wouldn't do it but that's very easy for someone like that to say you spent eight hours a day researching what's happening with individual companies versus the the average punter what i like about what you've just said is that the the safe money and yes you might get average performance but it's it's very low risk and very low time uh in a good index uh will give you a good solid uh you know bedrock to do it and then identifying those those stars that that might get better than average growth i know you talk about in in your book about uh you know what makes a winning share can you sort of share some of that

with us now yeah sure um there are a number of qualities um one of the the ones that people like warren buffett talk about is the most or the competitive advantage um classic examples in the past were probably you know coca-cola and mcdonald's but of course they attract competition but continue possibly to be the number one or if you look at microsoft and apple um so you need a strong competitive advantage which is the ability to continue to grow your product or your services in spite of competition other qualities are the businesses you'd like to see good cash flow generation from them and they have to be very good management normally you're you're starting to see a lineup between quality companies we actually have what we would call

good ESG good environmental social governance and I think that has been very much laid bare recently with the travails at the AMP and it's a company that really unfortunately is always trotted out as one that has failed to adapt it's failed to invest for the future it's failed to change its corporate culture and it's failed to disrupt itself and all of those features are what you will find in a good company and we're living in such a great period of change that the best companies in the world like when i learned economics and accounting and marketing there was always this thing if you introduced a new product to your own product range what happened if it cannibalized or ate your existing products now good companies are actually learning that they

not only have to do a lot of R&D and invest in new products, but they actively have to cannibalise and manage the transition from their own old products to new ones to stop competition from taking that market share. And CSL and ResMed and Cochlear, the healthcare companies or the biotech in Australia are very good examples there. It's good cost management and it's being very, very proactive i think these uh these managers of these businesses um you know uh don't rest on their laurels that what is this whole covid pandemic crisis has shown me is the resilience of humanity to adapt and change quickly to the circumstances and i think that's been replicated across companies um as well as across society although it's obviously incredibly challenging

for all those poor Victorian people that are still in lockdown. Yeah, that's a very good insight, given the uncertain times that we're in and will continue to be in. I think this is just the start of the way things are going to be. So embracing that and being constantly prepared to change yourself, because if you don't, then someone else is going to and you'll be left like Kodak, drying the vine. Tell me, rolling into that then, and given the challenging times we're in,

I mean, there's a lot of people who sort of will tend to try and stick their head in the sand and hope everything's just going to go away. Others will see massive opportunity that's going to come out of the radical uncertainty and the change that will go through it. If you are someone in your late 30s or up to mid-40s and you've got a home and you've got some of the home loan left, you've got some equity in your home, You've got, you know, reasonable super and some savings stuck away in an offset account. Given where we're at, what would you suggest they do now?

And I've got to underline this is not financial advice. And just in generic terms, what would you be doing? Keeping in cash, sticking into things? Where would you be suggesting someone in that sort of position starts to look at where they need to invest? Yes, and definitely this is not, you know, I'm not a financial advisor. So, all I can tell your listeners is that I am considerably older than that. Join the club, Danielle. And I can tell you now that I hold a lot of growth shares in my share portfolio.

I am a huge advocate. I know that there's been a lot of comparisons with, you know, dot-com busts and the world's going to end. But if I were investing now, I would invest in quality shares in Australia, which probably would not include our major banks, our insurance companies. It would be more healthcare stocks, the online companies like REA and car sales. I would put some high-quality technology or software companies in there. An example is Xero. You could also possibly put some good quality property REITs, Charterhall, Goodman Group, which is benefiting from the expansion of industrial spaces for e-commerce.

But I would also say that you can buy ETFs in Australia that give you exposure to high growth companies in the US. And I'm still positioned there. I would come back in five or ten years' time and say that I think it was the right decision on these pullbacks that we're seeing in that sector to be gaining some exposure to those shares because as you are well aware, Bushy, returns like dividends have been under huge pressure.

The payouts in Australia have been cut by about 38% this financial year from your dividends, from your traditional stocks like the banks and some of the infrastructure stocks. There's a question mark over Telstra going forward. So I think investors need to realise they need to move out on the risk curve for longer in their life to growth companies because at the end of the day, the ones that are going to really make you money is the ones that are growing.

And it is these companies that can adapt and change. And basically, as I say, we've been on this since the start of the 1970s when computers started. I mean, when I went to uni, the computer was called a VAX and it occupied the whole room. Well, my iPhone has more processing power than that whole room did. And I think that that rate of change that we are going to only see it accelerate in the next 10 years. Yeah, and what I love about technology, as you've just said, we've got the power of this in my own hands. When I was day trading back in the late 90s,

it was a very clunky and time-consuming process compared to the availability of information, the speed with which you can make transactions very cost-effectively or almost for no cost now. It's just mind-blowing. So all the tools are there. We just need to have the confidence and invest in our knowledge to be able to put ourselves in that position.

Danny, I want to switch into what I affectionately refer to as the ambush, bushfire, lightning round, where there's just five quick questions that I like to ask of all of our guests, because I know it's the words of wisdom that our listeners love to glean from you. First question, what's your favourite quote and why? Yeah, Mark Twain,

history does not repeat itself, but it often rhymes. I think we always should consider history I think it is very relevant particularly in the times that we are in at the moment and whilst it may not always be the same I think it is worth looking through the context of what has happened in the past I do think sometimes we can say this time it is different

But in terms of geopolitics and where the world is going at the moment, I think a good understanding of history would serve us all very well. I totally agree. And that other great saying that complements that one nice, and that is the only thing that we learn from history is that we don't learn from history. And I think Mark Twain was right on the money there. Yes, while it might feel completely different,

quite often it's addressing the fundamentals of the change that are happening behind that do echo what's happened in the past so a big lesson for me is not to be scared of that don't think that what we're going through yes it has a global scale now probably for the first time ever but the fundamentals haven't changed and we're actually in pretty good shape so there's actually plenty of opportunity that flows out of that next question what's the top book that you would recommend and why danielle yes well i could say the collapse of bearings but i live through that so no i'm not going to let anybody have to be sit through that one oh no that's a bit of a joke um i have lots of favorite books um but um i i am i love reading michael lewis i just think

he is such a great great storyteller yeah and um i watched i mentioned the big short i watched it again the other day i just love that book i think for investing and wealth creation and everything that's good and bad about humanity i mean i think that's really on the mark and i think that one of the hardest thing for investors is differentiating between when there is voracious greed and when there is fraud and when a system is corrupted and i think it's always really important to always pinch ourselves and always do a little bit of a check saying am i being a bit greedy here or is the system just too supportive of owning 10 investment properties um so i would put up um michael lewis the big short but failing that one he's recently done one called the fifth

risk which i think is a real eye-opener and excellent read i haven't read the one myself so i'm going to pop that one into the kindle thank you now that's great uh now this one's a little bit left field but um a lot of aussies still believe they pay way too much tax so what's the top legal thing that you've done to minimize the tax that you pay ha i didn't i paid huge tax in london i only discovered afterwards i could have been a resident non-domicile um you know to tell you the truth i don't think you should make decisions on trying to necessarily minimize your tax if you were buying a whole lot of highly frank dividends um shares you you would have discovered that you've actually had a um a capital loss or capital decrease in your capital i prefer

to say that we have some of the, you know, your superannuation is one of the best ways of making advantage of a low tax rate system. And I tend to look at it on its head. I think chasing returns based on tax decisions is not a good idea because I think we can often have a false economy there. Rather, I think when opportunities afford themselves over life, like I grabbed the first homebuyers opportunity in Australia, I grabbed the one in the UK, I used that vehicle called PEPS to save in shares and I have been a big advocate of saving in my super.

So I kind of look at it a little bit in a different way. I think that you're absolutely right. Tax benefits are a fringe benefit, not a reason. And I often say to people who are interested in property, oh, I'm going to save all this tax. And it's like, yeah, well, if you want to save tax, just get your accountant to charge you a lot more. You'd get exactly the same result.

It's more about focusing on the quality of what you're investing in rather than, okay, well, this is how much I'm going to keep in my hand. That's really just a little bit of icing on the cake. So, you know, very well said there. Now, back on the investment subject then, I'd love for you to share what's both the worst and the best piece of investment advice that you've ever received to date? Probably the worst was don't buy a property in 2003.

I got told, I'm a smart girl, don't buy a property from my son and I, and I said, yeah, but it's our house. I'm not planning on selling it any time soon, so I'm glad I didn't listen to that. The best investment advice? My old boss at Bearings, he was really sweet. he always used to say, always leave some on the table for somebody else. So I'll put that out there, take some profits and always leave a little bit of the cream on the milk or the icing on the

cake for another investor. Yeah, I like that. I like that. Yeah, I haven't heard that one before. That's really good. Sort of coming back to the individual level, because we all know that our success ultimately is driven around the habits that we display on a day-to-day basis. What's a personal habit that you believe contributes most to your investment success, Danielle? Yeah, well, two things. First of all, if I ever get freaked out by share markets, which everybody does, I go back and crunch the numbers about how much I actually have invested, when I invested it, and how much cash I have, and that always calms me down. um so to override your emotions you need the discipline to actually look at the numbers and

it always becomes down to um you know if if markets fall how much can i tolerate in terms of potential losses because basically in in share investing you don't have the profit until you sell the shares um so the other thing is uh it's my nerdiness bushy read read listen listen just love all that you know I just I I really think we've come to a stage in life where sadly people are very busy and it's very hard but there's lots of fabulous podcasts out there now if you can't pick up the book put the podcast on when you go for a drive or you know when you're going for a walk or when if you have the chance to go to for a run or if anyone goes to the gym anymore I think the biggest investment we can all make

is to invest in ourselves 100% it's golden advice and I'm just a readaholic I just love to be immersing myself in new information and there's no better way to develop yourself and protect yourself as a consequence of that so very well said now final question Danielle

and it's a big one If I gave you a microphone that spoke to every single one of the 7.7 billion people that are currently alive in the world and I gave you one minute to talk, what would you say? Yeah, we had a laugh about this one, didn't we? I'm going to have to say it. World peace. No.

I'm quoting Sandra Bullock out of that funny movie. In all seriousness, I think people, we all need to be the world I don't know whether we've become more selfish but I think to look at our neighbors to realize everybody has problems everybody isn't leading the perfect life to be more tolerant to remember to smile to people and it's it's it's it's that thing of my mother used to say you know you smile and the whole world smiles with you and I think sadly we're in a state now where there's a lot of division there's a lot of aggression and I think we all need to step back and just say for a lot of us we're in a very lucky lucky space

at the moment appreciate that space cherish that space and realize it's not all about it's not all about the money at the end of the day you can have as much money in the world but it's it's your family it's your friends and it's your health and um yeah sometimes going back to the basics i think is is a very rich and rewarding thing and i think some people may have found this in the pandemic i 100 agree when i i mean i'm uh currently i'm from south australia but stuck here in loctoria at the moment because we came over to help out my good wife's uh mother who had some health issues and we're sort of now domiciled here indefinitely we're not sure when we're going to be back through the border but if i if i have a look at you know i've seen a lot of

social media activity complaining about it but if you look at what our our parents went through you know world wars concentration camps uh very tough times to having to stay at home and watch netflix for a few weeks uh doesn't really compare so i think your analogy there of remembering how lucky we are and and putting a smile on so that they give an opportunity for the world to smile back at us then it's a it's a pretty good place to start no look that's been absolutely awesome danielle uh love what you've shared uh having skim read uh skim read your fantastic book Shareplicity strongly advise the readers to grab a handle on it if they're wanting to start expanding into the equities market.

Where can people get their hands on it? Yes, you can get author-signed copies from my website, which is shareplicity.com.au. Alternatively, it is available online, so Booktopia, all good bookstores, just Google it, um and it will come up yeah and it's been in the best best selling business book list in the top 10 uh for five weeks and i'll find out tomorrow whether we're going to make it six weeks so i'm very i'm very excited and i'm very proud to be able to help people hopefully make um better

investing decisions yeah brilliant fantastic danielle it was awesome spending time with your money debates and really enjoyed our conversation today so i know the book will continue to do well and you've been very generous with your time today. Thanks for joining us. Thank you very much indeed, Bushy. Great questions, great chat. Thank you. Thanks, Danielle.

Cheers. Well, Freedom Fighters, how good was that? To get a summary of all this investment gold in the show notes, just email me on hello at khgroup.com.au. That's H-E-L-L-O at khgroup.com.au. or check us out at www.bushymartin.com.au forward slash GetInvested. I look forward to joining you next week

for another episode of the GetInvested podcast. So thanks for listening. And as always, dream as if you live forever and live as if you die tomorrow.