Bringing it all Together

It is a decision you make,


an attitude you adopt and


a plan you implement.

We acknowledge that the vast majority of us ‘can’t have it all’. Thankfully, most of us in this, the lucky country, experience scarcity, not on an absolute level, but relative to what we could have and would like to have.

Given we live in an orderly society, protected by the rule of law and property rights, we can plan and influence, if not determine, the future we want to enjoy.

We are living in a highly specialised society. We earn an income and must allocate it to satisfy as many needs and wants as we can. We prioritise our needs and those of our dependents first, and the surplus income is then either spent on wants or saved.

In Australia, income is unevenly distributed, as is wealth. Inequality is a function of luck, hard work, education, inheritance, physical attributes, prevailing public policy, social norms and demographics, and the media to name just a few contributing factors.

But it is also a product of attitude.


Wealthy people typically have a different approach to money.

They don’t just work for their money; they make their money work for them!

We have seen that investment creates enhanced capacity for the future. It is holding off on satisfying all our wants now in the expectation of improved future satisfaction.

It’s akin to ‘delaying gratification”.

As a nation, we must invest and create productive capacity so that we can increase the size of the employment pool (or circular flow) or the ‘national pie’.

A growing economy means that the production possibility frontier shifts out to the right, the national pie gets bigger, the circular flow of income increases, or the water level in the swimming pool rises. More of us can get in and get wet!

As individuals or households,

you too can increase the size

of your own ‘circular flow’

and expand the possibilities

Retirement is a phase of life that looms large for us all. Australians are living longer and healthier on average than ever before. To maintain a reasonably consistent lifestyle in the ‘third stage’ of life, you need to decide which pillars of the retirement income system you will rely on and to what extent – the Age Pension, Compulsory Superannuation, private savings and investments, and ownership of your own home.

The burden of welfare is increasing and absorbing an ever-increasing proportion of public funds, limiting expenditure on other essential and socially beneficial programs. Governments encourage working Australians to contribute and prepare for their retirement through legislation and incentives such as tax breaks on super contributions, negative gearing on property investments, and tax exemptions on post-retirement income amongst the perks on offer.

Just as nations do, you need to make a conscious ‘policy decision’ to refrain from satisfying every want now, (saving) and invest for the future.

It will involve a trade-off, an opportunity forgone.




The time is right to prioritise and get your ‘ducks in a row’

You don't have to be a loser

You don’t have to be a ‘loser’….. The Reserve Bank has to maintain “the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” It’s a big ask! The RBA’s decision to cut the cash rate to record lows would not have been an easy one. As with every decision, there are trade-offs and unintended costs.

Economic prosperity requires a growing economy with the capacity to sustain and expand employment opportunities. It’s not hard to see why a rate cut was not just welcomed by loan holders but necessary.

When you add the conservative and surplus seeking tightening of the fiscal strings by Governments and cautious consumers saving rather than spending, it is imperative to add some fuel to the fire. With spare capacity in the economy, it’s hoped lower interest rates will provide further stimulus to consumer spending without the usual threat of inflation.

Weak expenditure (C) and investment is the preferred target variable in the RBA’s sights.

So, why isn’t the latest cut ‘music to the ears’ of everyone?

It comes down to the fact that Monetary Policy is what’s referred to as a ‘blunt instrument’- interest rate changes apply generally and are therefore non-specific and often inequitable. The unintended trade-off and inequity of the interest rate reductions is undoubtedly the ‘pay cut’ delivered to retirees dependent on income generated from cash in the bank – the ‘losers’ in this situation.

Cash is considered to be a safe alternative on the risk scale, and many convert their assets to cash to avoid volatility in retirement. What they don’t count on is suffering ‘collateral damage’ for the sake of macro-management and being forced to erode their capital.

It’s a good recommendation for holding property into retirement and generating income from rent rather than interest alone. It will never be more comfortable than it is now to start building or to grow a portfolio of properties that will allow you to retire with some unencumbered assets generating reliable income.

You don’t need to be one of the losers….

Never has the lesson been more obvious than this last 2 years in the grip of a global pandemic. Lockdowns and border restrictions necessary to control COVID-19 led to an unprecedented decline in economic growth.



The Government’s response to try and arrest the economy’s free-fall was to use both weapons in its arsenal,

1. FISCAL POLICY – unprecedented levels of government spending to support businesses, jobs, and public welfare.


2. MONETARY POLICY – at the same time to encourage spending and to ease the burden on households and businesses, the RBA reduced the cash rate to a historical low of .1%


Thankfully, what we have seen is the “V shaped” recovery the policymakers were hoping for. But, there are always winners and losers. Retirees, who are encouraged to play it safe with cash, and are reliant on interest alone have taken a huge hit at the expense of the broader economy.

It is a strong recommendation to diversify your investments and to have rental income in the mix because, in contrast to interest rates, this is what has happened to rental rates over the last 12 months: