The Political Economy of Stacks of Cash
Play • 33 min

The boys are talking up money printing, but Wolfgang’s not loving it. Why are conservatives anti money printing, and if they are, why are they the ones driving it? Is Thomas really a “fringe-dwelling populist” and how does politics change if there’s stacks of cash for everyone?

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The Elephant In The Room Property Podcast | Inside Australian Real Estate
The Elephant In The Room Property Podcast | Inside Australian Real Estate
Veronica Morgan & Chris Bates
Ep 164 - Marty Sadlier | Australia’s underinsurance epidemic: 83% underinsured!?
Marty Sadlier has over 19 years experience in the building and construction industry, he is the co-founder of MCG Quantity Surveyors which is recognised as Australia’s fastest growing quantity surveying firm; working with big names in business like McDonalds, CBA and Westpac. In this episode Marty breaks the news to Australians about the widespread building defects, the unbelievable underinsurance across Australia and what property investors should be doing to safeguard their biggest asset. Here’s what we covered: * How underinsured are Australians? * How to work out how much you should insure your house for? * Are online value calculators accurate? * How does extra costs such as demolish get lost in property owners calculations? * Can you insure depreciating buildings? * What is the difference between a valuer and a quantity surveyor? * Do apartment 5 year valuations increase their premiums? * How many buildings have flammable cladding? * Are things improving around building defects or is it getting worse? RELEVANT EPISODES: Episode 138 | Simon Kuestenmacher Episode 121 | Bart Mead Episode 113 | Dr. Nicole Johnston GUEST LINKS: https://www.mcgqs.com.au/elephant/ Fire Cladding Blog Common building defects Blog Final NSW Government Report into Building Standards and Quality Blog HOST LINKS: Looking for a Sydney Buyers Agent? www.gooddeeds.com.au Work with Veronica: https://linktr.ee/veronicamorgan Looking for a Mortgage Broker? www.wealthful.com.au Work with Chris: hello@wealthful.com.au Send in your questions to: questions@theelephantintheroom.com.au EPISODE TRANSCRIPT: Please note that this has been transcribed by half-human-half-robot, so brace yourself for typos and the odd bit of weirdness… This episode was recorded in February 2021.
1 hr 12 min
The Michael Yardney Podcast | Property Investment, Success & Money
The Michael Yardney Podcast | Property Investment, Success & Money
Michael Yardney; Australia's authority in wealth creation through property
Ditch the Debt and get Rich with Effie Zahos
Navigating the world of personal finance can be overwhelming, even for an adult who has quite a bit of experience in the working world. Yet with some smart planning, a good strategy, and an understanding of the basics you should be able to develop the money-management skills you need to get your finances under control. And that’s what I discuss in today’s show with Australia’s leading finance columnist Effie Zahos. While many people listen to this podcast because they’re interested in property investing, money management is a critical part of any type of investing, and especially real estate investing. You need good money management to save your first deposit and once you own a property or two money management is even more important. So don’t let the financial world intimidate you. You may not have been taught much about finances, but I believe that 80% of personal finance is not financial education, but financial behaviour. If you can modify your behaviour with your finances, you can modify your financial future. And even if you don’t have money problems, I think you’ll enjoy my chat with Effie today as we discussed her new book and some lessons that we should be teaching our children and grandchildren. And of course, I will be sharing my regular mindset message with you. Ditch the Debt and Get Rich The Covid-19 pandemic impacted just about every Australian. Some people manage to cope well financially – others did even better financially turning lemons into lemonade, however, many Australians ran into financial difficulty with some only managing to stay afloat by raiding their super or putting a pause on their debt It was just another example of the rich getting richer and they did so by understanding the way money and finance works. Now you know one of the aims of my podcast and my blogs is to make more and more Australians financially fluent and help them get control of the finances. So, I was pleased to hear that leading Australian finance commentator and author Effie Zahos has just published a new book called Ditch the Debt and Get Rich. Effie Zahos is one of Australia’s leading personal finance commentators, with more than two decades of experience helping Aussies make the most of their money. She’s a regular money expert on Channel 9’s Today Show and on radio around Australia and was editor of Money magazine and is now Editor-at-Large at Canstar. Some of the subjects that Effie and I discussed * Effie’s journey and why she believes it’s so important to be the best financial version of yourself and learn the right things to teach your kids about finance. * Why more Australians aren’t wealthy and how they’ve become an instant gratification society. * The importance of mindset in developing wealth. * Money personalities – The animal traits that correspond to how you deal with money: Peacocks, Squirrels, Sloths, Owls, Ostriches * The problem of buy now, pay later, and how to be more aware of the tricks retailers use to get us to spend. * How to break the cycle of living payday to payday by no longer setting yourself up for failure. And how to put yourself on a bare-bones budget to catch up. * Common money mistakes. * Debt repayment strategies. * How to think rich in order to become rich. * How children learn financial literacy from their parents. * Some of the lessons Effie has learned over many years writing and speaking about finance. * It’s not what you earn that counts it’s what you spend. * Compound interest can make you a millionaire. The great Albert Einstein once said: "Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it". * Learn to say no * I am my best investment * I will continue to make mistakes * love your superannuation fund * Set your savings on autopilot * Have a plan and stick to it * The people who will most benefit from Effie’s new book: savvy investors, people who need a nudge, and people who want to be a better financial version of themselves Links and Resources: Michael Yardney Metropole’s Strategic Property Plan – to help both beginning and experienced investors Effie Zahos’ new book – Ditch the Debt and Get Rich Shownotes plus more here: Ditch the Debt and get Rich with Effie Zahos Some of our favourite quotes from the show: “There’s a whole science behind behavioural finance, and that’s why I think reading your new book Ditch the Debt and Get Rich is important.” – Michael Yardney “Some financial discipline early in life will allow people to have those enjoyments later on.” – Michael Yardney “The gap between what you gain and how much you avoid offsetting the gain is the figure that matters the most.” – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how
46 min
Finance & Fury Podcast
Finance & Fury Podcast
Finance & Fury
Investing in infrastructure as part of a wealth accumulation strategy.
Welcome to Finance and Fury. This episode will looking at infrastructure as an asset class, to see if it can help to provide some diversification for portfolios and decent moving forward. * Infrastructure – physical assets that provide services that are essential for us to live our lives. The aim is to invest in assets that if the market booms or busts, it provides some diversification to traditional asset classes. * Traditional Asset classes – * Defensive – Cash, Fixed interest (gov, corporate bonds, credit) * Growth – Property, Shares – Australian or international * Where does infrastructure sit – still in the growth category - In my view – can help to provide a real asset can play a role in an investment portfolio – two component for reasons to invest in infrastructure * Diversification – infrastructure allows an investment in lower correlation to other asset classes – however, depending on the type on investment purchased, some may have “higher beta and therefore less diversifying” * Real use – value – investment in areas that we generally interact with these essential services every single day, gas, water, electricity, transport * Traditional infrastructure * Transport – seaports, airports, major roads, bridges, tunnels * Utilities – Power generation, energy distribution and storage, water, sewage * Renewable energy – big asset class moving forward * Communication – network towers, satellites, phone networks * Infrastructure at the moment is potentially undervalued due to not seeing the same rebound as many other growth investments over the past 6 months – oil prices also went down – the year returns haven’t been great – * effects are cyclical - there may be an opportunity today from a pricing perspective - the market has marked down real assets and infrastructure at the moment - * Lot of money being spent on infrastructure – there is a major need in developed economies for revamping of aging infrastructure, and for new infrastructure projects * In addition - emerging markets which have their economies growing as well as their population’s wealth increasing, the demand for more and better infrastructure continues to rise * But government budget pressures have been affecting their ability and willingness to fund infrastructure projects, creating more opportunities for private capital in the asset class – however, with the invention of green bonds as well as cash rates for funding being close to zero, this could increase the amount of money available to fund projects Benefits – * Predictability of cashflow - Infrastructure assets usually have a pretty high level of visibility and security when it comes to their future cash flows. * When talking to fund managers, they say that they look for projects that almost have guaranteed revenues – those that are underpinned by regulation or long-term contracts with highly creditworthy counterparties - such as governments – compare this to other companies where their cashflows are not as secure – the valuations can be hard * However – most infrastructure could be considered to be a Public Private Partnerships - where the public sector partners with a private sector company - The private sector company develops, constructs, finances, operates and maintains the infrastructure, and the public sector pays for those services -the concessions for the assets are often granted over lengthy contractual periods, which can be over 30 years – so the cashflows can be relatively secure * Also – they have Inflation-linked revenues - The revenues that infrastructure assets earn are often linked to inflation - rates of return set by regulators frequently linked to future inflation expectations in in a long-term contract. * A competitive advantage – A lot of the time, infrastructure assets have a form of a monopoly in the services that they provide – or in other cases, they operate in markets with high barriers to entry * Therefore, the assets cannot be easily replicated and often remain free of the competitive pressures confronting more traditional organisations – so again, the risks that an established project all of a sudden has a new up coming competition are very low – helping to reduce uncertainty risks * The Essential nature of infrastructure and correlation – * People tend to use these essential services on a daily basis and that utilisation (and returns) can often depend less on the economic climate at a point in time than other investments - Because of that essential character, economic factors often have less of an influence on infrastructure assets than on numerous other businesses, which can assist in delivering stable returns through market cycles * infrastructure as an asset class, particularly unlisted infrastructure, has historically demonstrated low levels of correlation with other growth asset classes – can help to reduce volatility of a portfolio The risks of infrastructure * Too much leverage and interest rates * Debt and the cost of that debt can be a big factor in the future performance of a project – * Technically – with interest low or falling – the cost of debt declines – this means the costs of capital also decline in the valuation of projects – * This means that the values of the project increase – but the opposite is true, if interest rates rise, then the valuations can also decline * on average, most infrastructure stocks have higher debt to equity or gearing levels than the average stock and therefore are more vulnerable to interest rate rises. * Greenfield risk – this is a major risk for new projects – where the estimates don’t stack up to reality – an example of this would be a toll road at the beginning of its life, when it has the most uncertainty - what traffic levels of the road will really be like remains to be seen. Tolls may have been set, but again, sufficient usage of the new road is essential – there can be too much uncertainty which can be dangerous * You can also have Construction risks, delay risks and cost blowouts - Example – The Queensland Government contracted BrisConnections to run its Airportlink Project, which opened to the public in 2012. Initial forecasts were for the 6.7km tunnel, linking Brisbane Airport with the CBD, to carry 170,000 vehicles per day. Six months after opening, there were only 50,000 vehicles using the road and BrisConnections went into receivership. The roadway was eventually sold for $2 billion to Transurban, despite having cost $4.8 billion to construct. Many retail investors who invested in the initial public offer at $1.00 lost most of their money when the shares plunged to $0.001 within months. Further, the shares were structured as instalment warrants carrying a further two instalments of $1 each. People who thought they were being canny traders, picking up a bargain, suddenly found that for each $1,000 they invested, they incurred a $2 million liability. * Lesson – investing in early infrastructure projects is very risky – especially if there aren’t government guarantees on the returns * Management and ESG factors - while real assets like infrastructure can be fairly low risk, this can be negated by the people that run them – the same with any company * When looking at infrastructure businesses - It might be the case that too much risk is taken on, a white elephant is built, or the capital structure is not right and there is too much leverage. The human element is very important to assess as the humans are the ones making the decisions on what to build based around assumptions – if enough mis management occurs, a company can lose its licence to operate an infrastructure asset if the asset is not well managed. * In Italy – Autostrade is a company that controls the roads forming the Italian system of motorways - currently at risk of having its mot…
26 min
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