Bonus mailbag edition! October 11, 2024

28:08There's been no material change to the business. It still seems like it's on track. Whatever's happened with the share price, I kind of say, well, you're right. You were right. And eventually the market will agree with you. It might not agree with you immediately, but it's a whole weighing versus voting machine kind of metaphor. So just make sure you set the benchmarks appropriately, leg in gently, find your way. You'll make all kinds of mistakes. Everyone does. I do every day, you know, just you, you'll continue to make mistakes, but you'll make, hopefully you won't make the same ones again and again.

28:42And the, and the, and the magnitude of the mistakes will be smaller and you'll just get better and better and better. Or, or you might just find that even with a bit of success, he goes, gosh, it's as hard work and it's not the kind of work I enjoy. I'm just going to go with the ETFs and no shame in that whatsoever. So yeah, that's what I think. I, man, um, I think what I love about ETFs is you don't have to move away from them. I've got ETFs. Right, me too. And you can kind of afford to then – so I guess my point to Mo is you don't need to – I think you wait until you know that you know because you're getting a guaranteed market return.

29:23Now, the return itself is not guaranteed, but you're guaranteed to get that market return, whatever it is, less tiny amounts of fees as long as you're buying super low cost, broad index ETFs, which are the only ones I recommend people buy more or less. And I think, not that I'm saying Mo should do this, I can't give him personal advice. But I think for all of that, so you get the market return, right? So you only want to step out of that when you have a reasonably high probability of beating that, because otherwise, you know, why take the risk? If it's a 50-50 thing, stay with what you got, because you're doing a lot of work for no return.

29:56If it's 60-40, you start to think about it. I think, I would say to Mo, the great thing, I'll give straw man a wrap. The great thing about straw man is you can do your ETF investing with your own money, and use straw man or something else to do that idea of like, what if I did it myself? What would that look like? Now, as Andrew says, there's no substitute for putting your own money in, but you can use that and make it, you know, wait until you know. If you're Buffett and you spend 10 years in ETFs rather than investing yourself, do you lose some potential upside? Yeah, absolutely. But is it that much upside?

30:23Not really because it's only the difference between the market and what you would have got. And if you're going to beat the market by 1 % or 2 % a year over that 10 years, it's not going to cost you that much. I'm not saying wait 10 years. I'm just saying you can afford to because the ETF return on the market has traditionally been so good. I suspect it will be forever, but no guarantees. I can't make promises or forecasts because you got that. It's a really nice bogey to start with. And it should be hard to beat, right? Because only half the market's going to beat it by definition. It's what averages do.

30:50How do you work out you're in that half? Well, do it for a while. Do it with your own money if you want to, with a small amount of money, do the rest of the ETFs or do it with a straw man type portfolio or literally straw man portfolio and see what happens there while you invest in ETFs otherwise and make the move when you feel like you've got a reasonable basis for believing you can do better than the index. It's a really, it's a great problem though. It's a great question. As Andrew likes to say, I wouldn't overthink it. I think you just go, hey, I'm going to get the market return. If that's 9 % a year or so, if you never ever do anything else, you'll be fine.

31:19It's like you're adding enough money, you've got enough time. And when you do look at it, hang on, i'm i enjoy this and i think i'm i'm seem like i'm doing okay at it and i have a reason to believe i'm going to keep doing okay because the ones i've done well haven't been a fluke i've kind of worked it out and i followed the thesis to andrew's point why should the share price go up well i thought it was this and turns out i was right not not right about the share price right about the things i expected to have happen then you start to think well that seems to me that i'm not terrible at this maybe i should do it more of it and so you just literally at some point wait till you've proven to yourself and then and then dip your toe in the water and then the ankle than the leg and then kind of go from there as it makes sense to do so.

31:58ETS is just such a wonderful backstop. You don't need to overthink it, I don't think. The post-mortem of any investment decision is so super critical, even on the good ones, right? And you've got to be honest with yourself that there have been times where I've done really well on an investment, but for the wrong reasons. Like I bought it for reasons X, Y, and Z. And six months later, a takeover offer came completely out of the blue. not on my radar, no expectation of it. And just, Oh, Oh, look, I want a great investment. I mean, well, maybe we actually don't know. I just got lucky if that, if that takeover had never come, maybe it never would have my expectations never would have been fulfilled.

32:39So it's, it's really important to do that. Oh. And one other thing I wanted to say before we go to the next question, I listened to a podcast recently with Aswath Damadaran, who's the NYU professor. He's sort of specializes in valuation. a lot of good stuff on youtube if you really want to dive into the weeds on this kind of stuff anyway he was on the podcast and and the host was asking him what if on your deathbed i sort of said to you you know what all of this work that you have done over your entire life if you were just invested in an index fund yeah you could what if you had made 50 basis points per year or you know a percent per year more than what you did would you be okay with that and his answer was i just thought it was great it was yeah i'm totally okay with that and i and he says i think that's critical because if you keep telling yourself i did the right thing therefore i should beat the market therein lies the seeds for being righteous for being indignant and for getting angry and when you're angry at markets nothing comes of that and i love i loved that you know it's that it's a i'm right the market's wrong it's like no the market is all even when the market is wrong it's right is that is a first painful lesson you have to have anyway he goes on to sort of talk about which is we we mention pretty regularly as well and bears repeating which is it's not a tragedy if you enjoy the process yeah exactly and and that's like i love this i love thinking about business i love analyzing business look if the market does nine percent and i get eight percent per year i've still done i've still done incredibly well right and now if that was a if that was an arduous, you know, painful, difficult, boring process, then yes, you have wasted your life.

34:21But if that is something that has just sort of ignited a passion in you, and I don't know, there'll be people listening to this going, get a life, get a hobby. Like there are better things in the world than mucking around with spreadsheets and thinking about business models. But if you do like to nerd out on that kind of stuff, it's not a waste at all. And the other part of that is that, you know perhaps not surprisingly when you do enjoy it it's not work and you will do it more and by doing more you will get better at it by getting better it'll be more worthwhile doing it it feeds on itself you will not find a very successful investor who has been that way in spite of their hatred of the game that's right they they they love the game right and they would play and then you look at some of them oh you know i'll try and not to mention uncle uncle uh uh buffett because because he's the obvious example but yeah you know like these so many of these people could have stopped decades ago that's right and lived a life like midas right and they're still investing they're still spending like it's not for the money it's not for the money and and and i'm not saying you should be like that but i'm just saying if recognize what it is that you like and don't like and and it's a big part for me if you find this difficult boring difficult called etc get the etf why put yourself through all it's just unnecessary life is short if it's stressful it's taking too much time you want to do with your time if you're not if you're not good at it if you're not enjoying it then do it yeah and even if you are good at it but you hate it yeah that's right yeah life is still too short right mate i can clean the toilet with the best of them right sparkling clean when i'm finished with it but i prefer not to right so unfortunately I don't have a choice because we don't have a maid.

36:06But, you know, I think the point's made. But hopefully that helps. Let that be part of the decision process. You know, Andrew Citi doesn't have a maid in, so he doesn't have a team that works for straw man that he makes go and clean the toilet for him. Do you notice that? I notice that too, listeners. I do have kids. So that's, you know, slave labor. Oh, even then. Do you trust them to clean the toilet? No, but they can do it anyway. Sometimes you let the kids do something and you've got to spend more time cleaning up what they did rather than actually them do it themselves. I tell them and they hate it.

36:34I say, it's character building. Build your character, Dad. Love it. You'll thank me one day. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener.

36:53Here's a question from someone who I won't name who doesn't ask to remain anonymous, but it's a decent amount of money involved here, so I'm going to keep it anonymous. A bit of a first world problem, but a real problem. And I think you will like this, Ram, because it highlights the... We talked about financial advice, and I think it's the one coming up on Sunday. We're recording a bit out of sequence this week. John starts with... Good morning, lads. I appreciate the dedication you both put in educating the wider community in financial literacy. It's much appreciated. What would you consider a fair price for financial advice?

37:24In my case, after starting three different businesses, my wife and I were able to retire at the age of 60 with approximately$12 million invested, which is pretty good. Well done. We appreciate how blessed we have been throughout our lives. To be born in Australia with a functioning body and mind is such a privilege. And I appreciate that too, because I think it's an important reminder. Our money is 60 % invested in a beta shares ASX 200 ETF and 40 % in a beta shares global ETF. The current price of the advice is 0.33%, which sounds to be good value. However, at that rate, we pay$39 ,000 per year.

38:03If the market grows an average of 8 % to 10 % over the next decade, we will be paying approximately half a million dollars over the next 10 years. Makes you want to be John's financial advisor, doesn't it? There seems to be quite a lot, he says. How do other advisors charge for their services. I would think a percentage-based fee up to a maximum capped fee would be reasonable. What are your thoughts? Thanks, John. I mean, on one hand, no one's crying for John, right? He's got$12 million. If he pays half a million dollars over 10 years, you know, you can afford it. On the other hand, if you're John's financial advisor and you're picking up$40 ,000 a year to put him into two low-cost ETFs, by the way, I checked the ETFs.

38:43One of them has a cost ratio, management expense ratio, 0.04%. The other one, 0.08%. And by the way, that's inside the ETF. So John's numbers almost certainly don't include those numbers. So John's paying that to the ETF provider. It's already in his returns. He's not handing out cash, but it's reducing his returns by that amount, which is tiny. And then 0.33 % of his financial advisor, who thus far has put him in two index ETFs. He's having a laugh. That is totally outrageous. Isn't it? Look, I said, look, again, we're out of sequence. Whether I have said it or will say it. If you haven't, well, you've said it before and you will say it again regardless of the sequence.

39:23And it's not to have a go at financial planners. As I said, there are some financial planners that are worth their weight in gold, right? They are absolute rainmakers and they are worth every single cent because the advice they give you will save you from yourself or make you a fortune and like what? That is money well spent. however you know 60 local 40 offshore all in an etf is that worth something and that's not that's not terrible by the way that's great advice so i'm not saying he's or she's giving you bad advice it's great advice yes yeah yeah is it worth that much and by the way now that you've received the advice and paid some fees on that already a decent fee do do you need to keep paying it for the same advice i would say i would say no now normally things are more complicated when you've got smaller amounts of money if you quote unquote only had a million dollars it's hard to say that with a straight face but again partly it comes from our age like when i was a kid a million dollars right a lot of you win a million dollars in a lot of your millionaire you could buy anything you want you're set right now you know maybe a car space in gleam you know it's it's so but but But when you're – I shouldn't put a figure out there, but when it's at lower amounts, you've really got to manage that money prudently to make sure you don't run out.

40:47How much do I need to draw down? How much volatility can I withstand? What's the mix of income? It's a harder calculus. When you've got$12 million, you can weather a 50 % drawdown on the market. I'm not saying you're going to enjoy that, but when these are just nominal paper loss drawdowns that you experience in things like the GFC and the tech bubble burst and all of that. There'll be another one. There'll 100 % be another 50 % drawdown. In fact, there'll be a dozen of them over the next century. But, you know, that's what markets do, and then they tend to recover as well. So when you're in that kind of scenario, let's say it goes, you say, well, screw that, I don't need any advice.

41:29I'm leaving it there, and the next year you wake up and it's actually$6 million. Now, remember, the underlying value probably hasn't changed that much. The notional share prices have, and that's what's affected the change. Okay, it sucks. I'm now drawing down money on$6 million. But again, I'm assuming what you're talking about here is outside of your house, which you probably own outright. So you don't need a lot to sort of sustain your living. You'll draw down what you need to draw down. The rest will be there to recover. And it's just rather academic at that kind of point. So what I'm trying to say here is you don't need to be too clever with the planning.

42:04When you've got that much capital, whack it all in equities, roll with the punches. Some years will be awful. Some years will be fantastic. But on average, it'll be really, really, really decent. And you don't need to pay someone tens of thousands of dollars a year for that. I don't think. Maybe there's something else outside of that advice which you find worthwhile. But to me, I would look at that and go, no, no way. Give it to charity, you know. Yeah. Right. So one of the reasons I asked this question or I read this question out, mate, it's a reasonable question from John and I'm not going to blame him for having 12 million bucks.

42:35He's obviously worked hard and done well in life, right? So he deserves it if he's done it ethically and legally, and I'm sure he has. Sure. You know, a nice problem to have, but still a problem. Why I want to raise the question, mate, is when you say these large amounts of money, it does show you how egregious the fees are. Because you start to think about, hang on, as it grows. So firstly, it's already stupid at 40 grand a year. As it grows, he's going to be paying even more per year. and you ask yourself how much genuine value does that person add just because John's got more money than you've got or I've got, Andrew?

43:10And that answer is John's getting tagged because he happens to be richer than me. Not because the financial advisor is doing anything different. I'm getting the same advice. He's getting the same advice. He's going to pay more just so you have to have more money. I mean, imagine you go to the doctor and the doctor said, well, look, I'll fix your broken leg. But I realize, Andrew Forrest, you're a billionaire. so I'm going to do it for a billion dollars. But you'll do it for that. And we should subsidize stuff that people need to be subsidized for. I can be wrong. But it just shows you how big this is.

43:37It's an atrocious amount of money to be charged and the industry really should look itself very closely and ask why the hell it's doing that. Well, it knows. They're doing it for the same reason that agents work on commission. They realize you can, right? Is it any harder to sell a$10 million mansion in Mossman than it is to sell a one-bedroom unit? I'm sure there'll be some people who are actually. And maybe slightly, right? Maybe slightly. Maybe you've got to have a nicer suit and, you know, you've got to present yourself a certain way, but the difference is not the commission you're getting as a result.

44:07Your costs aren't that different in either scenario, right? And I think people do it. It's the issue of percentages. Oh, it's only 1%. It doesn't sound like much, right? So, two things. It's egregious and extraordinary and ridiculous. It would be anyway, but particularly because your investments are index ETFs. If you know you're not going to change that over your life from now, you're done. Paying this year might have been worthwhile to get the strategy right. 40 grand, probably not. I say he might be a lady. 40 grand is stupidly too much no matter what. They haven't put 40 grand's worth of work into it, right?

44:42No one gets that hourly fee unless you're a financial advisor or a real estate agent, right? It's just dumb. Again, I would do it if I get away with that. I wouldn't probably. Oh, maybe I would. If I get that much money, I probably would take it. I don't know. I like to think I wouldn't put it that way. I love the honesty. Well, you know, some people all get a price, as Kerry Packer once famously said. I'm not sure. There's an episode in Futurama where they come into some money. It's like, all of a sudden, they've got an opinion on the capital gains tax. It's all about your own circumstance. It's all about the Benjamins.

45:11Absolutely. So, it's stupidly egregious. I will give you one but, John. And the but I will give you is simply that Ram said if the price, you know, if the share market fell in half and the value was the same, but the market carried away, you know, it doesn't make any difference. you wouldn't change the strategy. That's true. But here's the really big, and this is important, but for anybody listening. If John, you at that point would go, oh my God, this is terrible. I'm selling out and going to property. And you crystallize that massive loss because there's not someone there to say, whoa, mate, hang on, hang on, hang on, hang on.

45:41Don't get carried away here. Don't be silly. You've lost a bit on paper, but remember what the strategy was. Remember why we did it. The strategy is still sound. Don't get carried away. Stay the course. Remember we said we're going to do that. Yeah. Okay. All right. Fair enough. I'll stay there. now if he saved you six million dollars then it's worth every cent of the 39 grand you paid right so i i will and i've got to be careful and i'm dragging you into this one mate um that we don't so we wouldn't need it so other people wouldn't or shouldn't either and you didn't mention that ram you said like unless maybe there's maybe he's giving you something that's worth paying for yeah and you know paying 40 grand is a lot until he saves you from losing 41 grand or more yeah in which case it's worth every cent of that money right so if you're someone who knows that you know that you know, not thinks, not hopes.

46:25Mike Tyson planned to get punched in the face stuff. I plan to win this boxing fight. Okay, well, I don't need a trainer then because I'm going to win this, right? Bang, you hit first round, you got to sit down in the corner and go, what do I do now? I really could have done with a trainer in my corner at that point. Then take the trainer, right? Take the financial advisor, pay them, hate it, but do it because it's worth it because they're going to keep you on the straight and narrow. But if you're not, if you're going to do it, if you know that you know that you know, you can get up at the end of round one and go, I got punched in the face, but I've been here before.

46:53I know what I'm doing. I can keep my cool. I can analyze the situation. I can stay in the fight. Then you don't need the trainer in the corner. So that's just one way to think about it. Is that good, Ram? More than one? Yeah, no. There is always the – we talk a bit about endurance over profit maximization. Yes. And you might choose – I'm not even suggesting you should or otherwise, but just something to think about. You might deliberately leave a million in cash. Yes. Knowing that that's going to handicap your long-term returns and to a reasonably significant degree. But it means that you've got that money there so you don't have to sell your shares in the event of a drawdown.

47:40In fact, maybe you can make yourself feel a bit better and buy some stuff when it's dipping. Or to simply know you've got extra years of living expenses so you can afford to ignore your portfolio entirely. Whatever happens. And by the way, the past is really no guarantee of the future. Although we base everything we say just on the historical example, it doesn't mean that there is a version of the future where we drop 90 % and then stay there for 20 years. Now, that's pretty much Mad Max kind of scenario, but it's possible. So again, you just, as you say rightly made, it's about knowing yourself, knowing what you are likely or otherwise to do and just accounting for that.

48:17And just there is oftentimes, most times, a good argument to be made for just structuring things in a way that's not so much for profit maximization, but for endurance, giving you the ability to stay the course and to protect you from yourself. And that's the sort of advice a financial advisor should give you in the first year of your plan, which is, let's chat about your risk tolerance, your objectives. Here's something you should do if you need to do it. This is what you should do. And then you set. And again, know yourself. If you need the coach, if you need the advisor, if you need that extra bit of advice, and I wouldn't need it, right?

48:49Not because we're geniuses, because we've done this for a while, we know what we're doing, and we can reasonably protect ourselves from that sort of stuff. Other people can't, not because they're worse than us and we're better than them, just because they've got different life skills, different experiences, different temperaments, have different experiences. By the time, you know, and I have retired with$12 million each. I mean, straw man would have to fall by 90 % value to have that sort of result. But let's presume it was possible that he may not be a billionaire on paper, at least at the moment.

49:14But we will have done it for 40 plus years. And so it doesn't mean we can't make mistakes, but we're pretty good with that. Other people aren't. Even if you've been a great businessman, John, you and your wife have done fantastically well, doesn't mean necessarily great with money and financial markets. You might have been a great mechanic. You might have been a great software designer. You might have been a great house builder. I don't know. Doesn't mean you're a great investor. And I'm not saying you think you are, but just be mindful that I'm not going to start building a car to save myself the mechanic fees.

49:41So, you know, know yourself and go from that perspective. And I'll stand up for the financial planners in the sense that, look, honestly, genuinely, there's some really good ones. There really are. And any of you who are listening, I'm sure you are, because you're listening, so you must be. Here's the irony of the situation. I bet you, if you're a financial planner and you turned around tomorrow and said, you know what, I'm not charging a commission, but it's$5 ,000 for me to give you some advice. One off, I'll give you some advice and I'll send you on your way. Or I'll charge half a percent and I'll just charge that forever.

50:16What do you prefer? I reckon 80 % of people would cake the latter. Yeah, totally. You know, and so that's the irony because you're like, well, you call us greedy scumbags, but the reality is when we offer the other way, no one takes it. And then they go, wait a second,$5 ,000, that's outrageous. So sometimes we've got to look in the mirror before we cast blame anywhere else. That's true. Mate, Ian sends us a short email. He said, hi, gents. Any chance you have transcripts of all your podcasts? I want to drop them all into a Gen AI tool to summarize the core lessons, delete the Bitcoin references, LOL, then build a money guide for my kids.

50:58Poor Scott and Ram's almanac, perhaps. Cheers, Ian. I can heartily support the deletion of the Bitcoin references. Good thing is the book will only be half as long as it would otherwise be, which is nice. No, I'm kidding. Take out the property rants. Imagine the chapters and the chapter lengths per topic. I don't think I want that to happen. I should say, by the way, it's a no way we don't have transcripts for the podcast, mate, unfortunately. I dare say you can probably just give AI the bloody homepage and it'll do transcripts and summarize it for you anyway. I did it just the other day. Did you really?

51:30Yeah, and not for hours, for another one. And what you will - I'm slightly offended. Just find a transcript. like a transcript generator doesn't have to be an ai thing you'll just you'll paste in a spotify link or a youtube link or wherever the thing is it'll do it for you you can export it into a text document then you can feed that to the llm and and it'll they are really good at that they're really good at summarizing they're they fall a bit short on some tasks but at this point in time it is brilliant it is brilliant for that um can i tell you what's scary around i actually you know this one, I've shared this with you already, but for our listeners, the reverse is also possible.

52:06One of the guys that we work with, Matt, who's an absolute gun bloke and he's our head of new member acquisition, took a couple of retirement articles we'd written and tasked Google's LLM with creating a podcast, a spoken podcast from that content, and he said it was scarily good. So, you might be listening to one of the last episodes of Scott and Andrew doing the Motley for Money podcast. At some point, I might get fired. Andrew might be put out the pasture and you might be hearing robots do it. But until then, you're stuck with us. So yeah, we don't have one in. I'm sorry. I do like the poor Scott and Rams almanac.

52:36That's got a bit of a ring to it. Of course, that comes off the back of poor Richard's almanac that was written by, oh, I've lost it now. Who was it? Ben Franklin. Charlie Munger's hero and of course then poor Charlie's almanac. Paying homage to that was written, was compiled as well. So it would be somewhat prestigious company we'd be keeping if there was a Scott and Rams almanac, mate, I would suggest. Yes, yes. Although it would just be very repetitive. of that's the beauty of summarizing right you take a little repetition that's what i'm saying about the individual lengths of the chapters be like oh that's you know or maybe a reference how many times this statement was made you know what a word can be fascinating how many times did you say it depends how many times did i say really really i'd be a very large number i think yeah it'd be a really really large number i should say and andrew will say how many times well it depends it depends um let's go another question made on property it's that sort of podcast now Now, it starts with, greetings, Scott and Andrew.

53:29You can use my name if you can pronounce it. So, I'm going to get you to pronounce it, Andrew. Okay. It's spelled A-N-D-R-Z-E-J. I pronounce this Andre some... Andrew is, I assume, the English-sized version of that, or vice versa. I don't know how to pronounce it. Do you? I'm just asking Chachi PT. do you pronounce oops doing it live we're doing it live it looks like you've it looks like you've made a typo you may and I did I did I typed it in wrong you may be trying to say Anje which is common in Poland Anje there you go all right Anje the J is pronounced like a Y Anje Anje There you go, Anye.

54:23Hopefully we got that right. He says, thank you for an excellent podcast. My wife and I have learned so much from listening to your show and are now preparing for a hopefully comfortable retirement. My question is, we bought a block of land in a small coastal town south of Perth. Sounds like a beautiful choice. And built a house on it 15 years ago. It is our principal place of residence. About 13 years ago, we decided to buy the block of land next door to us and amalgamated it into our block of land. And we then only have to pay one set of rates of utilities. That makes sense. Yes. And we're also looking at building a large shed, which did not eventuate.

54:55We're in a residential area, with the beach being some 300 metres away. You're living the dream. The land size is around 3 ,000 square metres, with the average block size in the town being between 600 and 1 ,100 square metres. And the values are rising. I know that it is said you cannot sell a piece of your house to raise cash, but if we subdivided the land and sold off a piece, would we need to pay capital gains tax on it? As this was part of our principal place of living. How is CGT calculated? Can we put any proceeds from the sale of my wife's super as she has just turned 60 or continue buying index ETFs as we have been doing and are very happy with?

55:31Or is there something else we should consider? Apart from the cash injection, the other reason is to downsize and make our property a bit more manageable as we get older. I know you can't give advice, but your thoughts would be greatly appreciated. Full on and thanks. Now, I asked this question specifically, Ram, because I don't know the answer. and I asked it I raised it specifically because we talk a lot about financial advisors and this is absolutely one where you want to go and see an accountant and we've been asked the question I think it's in Sunday's pod coming up about you know what's a reasonable price to pay for financial advice or what time should you go and get financial advice uh on Jay this is one of those examples because you're talking about two properties being amalgamated different cost bases uh you bought them 13 years ago, 15 years ago.

56:16So you bought it during capital gains tax, so it will be applicable. I dare say it's some proportional amounts based on the land size or the land values. I don't know the rules as to how that needs to be calculated. Maybe you can do it on land value. Maybe it's improved land value. You can claim an exemption on your principal residence for six years. That may or may not apply to the bit of land you've bought and added to. This is not a question for a podcast, mate. And so I'm asking the question to specifically not answer it, but deliberately because this is where financial advice matters. I've said before about financial advice.

56:50Is it worth putting money into super? Very possibly. And if you did the right thing here, you just have a small fortune in terms of tax, right? The concessional contributions you can make on lump sums at a super are really, really attractive. Maybe you put in both supers. I would just split it somehow. You take advantage of double the amount of concessional contribution limits. So this is absolutely one of those ones. It shouldn't be necessary. The rules should be simpler and easier, but they're not. And I wouldn't even try to think about ideas for this one. There are some considerations, mate, but this is one that, this is where accountants earn their money.

57:21For all of the, the question for all from John, here's two indices, give me 40 grand. That is a boondoggle. This one is where you really want someone who knows their stuff to give you great advice because the ATO will come knocking and you want to make sure you've dotted your eyes and crossed your teeth. I was furiously Googling while you were speaking there. Right, right. And my 30 seconds of research, yeah, you have to pay capital gains tax. You have to pay on some. I'm just not sure what the capital of the base would be and how that would be capital. Yes, yes. You can deduct costs and all that kind of stuff.

57:51But here's what I would say. Don't not do it just because you might be liable to capital gains tax. That's also true. And I'm not saying don't do it either. What I'm saying is look at what is the return expectation that you have for the cost that you want to take. And you might find that the tax component very much justifies it or very much nullifies it. I don't know. You've got to do your sums on that. And like valuing a company, I'd put some conservative assumptions that are in there. And generally, I know I'm old-fashioned, but when it comes to property, I'd be trying to like judge my investment return more on the income that it could generate.

58:32But yeah, I don't –

58:36then once, yeah, yeah. The opportunity cost part of it is hard, right? So in theory, you take it all. I know someone, I'm just going to put this in for fun. You put it all into Bitcoin, the 10Xs. You lose it all. You know? And it's like, you don't care that you paid some capital gain tax on that at all. Or yeah, it goes to zero. And it's like, oh, I've made a terrible mistake. Or even just liquidating it for cashflow and retirement. I mean, even then you might have 10 exit, but it's there right now. It's giving you nothing other than a bit of an extra lawn mow. You get rid of it. And yeah, whether you net half a million, a million, or a million and a half after tax, it's kind of less relevant than the amount of income you're going to generate on a regular basis investing that well so you can enjoy your retirement years versus getting no income while you hold on to it to avoid paying tax.

59:24Yep. So yeah, more food for thought. And so where I was going before was you don't have to not sell it, but just build something on it and then rent it out. I don't know, maybe that makes sense. I'd have to do the maths on it. But I mean, optionality is a beautiful thing and there's a lot of options with all of that. And you just want one that's not going to cause you too much headaches and is going to give you the better return. Yeah. But just my point being, my original point being, I encounter it a lot where someone goes, I'm not doing that because I have to pay tax. And I was like, well, I'd hate paying tax too, but you might be shooting yourself in the foot.

1:00:01And I'm not saying that this person's saying that, but a lot do, and it can be self-defeating. I think that's right. I think also, and this is not something I suggest, along Ram's line, do what's best for your life, not best for your money. Money helps you enjoy life. It's not the point in itself. But there also might be a circumstance in which selling the entire property without subdividing it, depending on how the capital gains tax is applied, maybe relevant, maybe you get the whole property for that period of time. and so maybe you get both thoughts or maybe you like the house you're in, you don't care, you want to sell half and keep the house you're in because you love the house and pay a bit extra tax because of it, do that as well.

1:00:36But there's so many different permutations of this one. It is not one that you should be taking advice from a podcaster on as much as we'd love to help you. Again, I ask the question specifically because there are just times when this is really complex and I can pick stocks and I'll have to pay a financial advisor. If I had your situation on, Jade, the first thing I would do is knock on the door of my accountant or my financial advisor and say, dude, I got a problem. I need your advice. And it's going to cost me a couple of grand, but it's really worthwhile because the tax implications of getting this one wrong will be much, much, much, much, much larger than any cost you pay.

1:01:07Maybe your fluke can get it right, but the chance of getting this one perfectly right or having the best outcome versus a slightly better outcome for paying a bit of money for an accountant or for financial advice, I dare say much, much more significant. So sometimes just pay up and get the best advice because it's definitely worth it. Yep. Nice one. Mate, I reckon we are done. And I'd ask you normally whether you'd come back on Sunday. But the good thing is, I know you will, because we've already pre-recorded the podcast. I've already done it, yes. Hopefully, I'll be back next Friday, assuming that, as I used to say, the good Lord willing, the creeks don't rise.

1:01:39If I make it back from our camping trip in one piece and prepared to do a podcast, we will be back with you. Well, we'll be back with you on Sunday, and then a brand new episode we will record next week. We'll come out on Friday. Until then, thank you for spending a bit of time with us on a Friday. Enjoy your weekend. If you happen to be in the snow, keep your eye out for me and fall on. Cheers.