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Future Financial Services Blog

13
November
2018

Is a property crash imminent or is it a media beat up?

Is a property crash imminent or is it a media beat up?

Last Sunday, Channel 9’s 60 Minutes program ran a segment suggesting that Australia is about to see the biggest property crash in our history.  There was talk of a 40% drop in property value in our major cities and the end of the seemingly endless growth cycle.  In my view, 60 Minutes have taken the extreme position, it makes a better story, but the problem is real.

The average Australian is far more bullish on property than any other asset. I‘ve heard numerous people say that you can’t lose money on property; we also hear enormous growth expectations like property doubles every 7 years.  Most people don’t blink about gearing up to 90% or more into an investment property, often using equity in their residential property to front up their 10% contribution to the property. That mindset has all the hallmarks of a bubble, and, as we know, bubbles burst.

Written by: Alex McKenzie Categories: Author, Future Financial Services Blog

13
November
2018

Myth

Million dollar Myth

Last week, I was reviewing a client who was overly worried that she would essentially be living on the poverty line in retirement.  Thankfully, this was not the case as she had accumulated enough assets to comfortably meet her income needs when she retires. This is not an uncommon concern as many people have little idea about how much money they will need in retirement, and some have greatly overestimated the amount they will require.

A potential reason for this is that, for years I’ve heard that you need 1 million dollars to retire (this excludes your residential property).  I’m not sure where this started, but it seems to have become a golden benchmark that many see as a necessity. Over the years, I’ve dealt with countless retirees and I’m able to confirm that very few reach the magic $1 million mark.

Written by: Alex McKenzie Categories: Author, Future Financial Services Blog

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