Card surcharges to go... Don’t cheer too loudly. October 18, 2024

0:07Welcome to Motley Fool Money, coming to you live from a cliff-top mansion in Copacomana. I'm Scott Phillips from The Motley Fool. He is Andrew Page from strawman.com. Not even from strawman.com. He kind of is strawman.com. He has the brains. He's the beauty. He's the muscle. He's the idea. He's the imagination. He is the straw man. Andrew, how are you? I don't know if that's the big up that you think it is. I wouldn't be surprised. You know, I love the framing. I'm going to go with the framing. You're not to hire me if you're hype man. Let's put it that way. Oh, yeah, like I've decided not to go with a CTO, a CMO, and a COO.

0:49A CHO chief hype officer. I like it. Yeah, that's right. I did a chief hype officer. You know, a big glass tower in the city just because. Give me an A, give me an N, give me a D. I can see it now. Pom-poms, like the whole box. You don't actually need a leotard, Andrew, is all I will say. No, let's not even think about that. That's after your vision for a Friday afternoon. Mate, how's your week been? Yeah, it's been really good. Excellent. It's been a bit quiet on the news front. Hasn't it? Which I often say is not – I mean, for those of us who like content, you know, it represents – This is wearing.

1:25It's a bit of a challenge. But from an investment standpoint, I usually like it. Usually no news is good news more often than not. Yeah, isn't it? Well, particularly if the trajectory is good. If the trajectory is bad, you kind of want to know what's going on. But, yes, if things are bubbling along, that's probably okay. Things that get announced tend to be bad. Speaking of that, mate, I did start by saying we're coming live from a clifftop mansion. Of course we're not. But the PM soon could be. Anthony Albanese decided to splash some cash. He and his fiancée, Jodie Hayden, said they did choose to buy a clifftop mansion, if you believe the headlines in the newspapers, spending$4.3 million on a place at Copacabana on the New South Wales north coast, apparently to be closer to Jodie's family.

2:10and can I say the media and the general population have lost their absolute stuff. I'm not going to say that word, I'm going to say stuff. On the news, mate, because, well, I mean, it's obvious because he's now bought a house, the government policy is now going to be really, really different and he's not going to be able to govern anymore as prime minister because he's got a house. And actually, no, that doesn't seem right at all. Doesn't actually seem like it makes any difference, does it? No. but yeah like the the obvious uh response here is yeah but the optics are bad and that's that's been the line that that most people have have taken it's true which is true uh i guess i said to you off air it's just the thing that the thing that makes me despair more than anything is that it's sort of like alba buys a house and let's put this in context right i said to you like i lived in a pretty ordinary um area and there were houses there going to two and a half million and, you know, I was sort of like, it sounds like a lot.

3:12You're saying fibro shacks. You're not saying kind of, you know, waterfront. You were only in a waterfront suburb, were you, with ocean views and - Oh, I was a mile away from the beach. An area that used to be pretty high crime and all kinds of issues. So when you say mile, you don't literally mean a mile because that actually sounds pretty close. You meant a little bit of a mile. Oh, yeah, it's very true. Yeah, 10 miles. I was just from the beach, yeah. As the crow flies, mind you. That was an hour and a half on Sydney roads. I'm just saying from particularly people of our sort of generation and above, you have this idea.

3:43We talked about this the other day. I was like, oh, a million dollars. It's so much. And I don't want to sort of like, to me, a million dollars is nothing. No, don't get me wrong. I will happily value a million dollars. But in the context of Australian property, particularly in capital cities, it's really not a lot. Like$4.5 million might get you, and again, this isn't in Sydney, so obviously it's a little bit different. but it's not the extravagance that it may have otherwise been perceived. But also just the fact that it's sort of like, but it's easy, it's emotional. And that's why we've got all this massive outrage and coverage on it.

4:20Whereas there are things of far more consequence and significance, but they're complex, they're structural, they're difficult to wrap your head around. It takes some explaining, some genuine thinking. Yeah. And there is no, even after doing all of that, it's still, gosh, how do I think of this? But there's zero column inches on that. So, you know, what do you think? Can I read you a tweet I sent during the week? This is an imaginary conversation with person one and person two. Person one says, gee, that looks bad. The optics. Person two says, it does, but is it bad? No, but it looks like it. Okay, but it's not bad, right?

5:00Well, no. so then does it actually matter well no so why are we talking about it well because of the optics and then you go back to the beginning and start again um it's i i have been absolutely well i've got lots of support on twitter and lots of absolute smashing on twitter on that comment right that that surprises me there was such a dichotomy of views oh my well it's partly political right but also i just you know so some people say well of course it matters because it'll impact how people vote like yes that's yes i completely agree with you my issue is and by the way don't you know politicians can't this is why i'll never be a politician mate and some people like if you don't again say you should be in politics scott i'm like oh mate the reason i'll never be is because i can't i couldn't do it is because you know whose fault it is this is our fault yeah and you get you get no credit and you get a lot of blame i've i said that on twitter i said this i i it's not our most fault it's electorate's fault and i got of course then you get a million people saying are you saying it's my fault i'm not wrong it's like well thank you just settle your ego down precious because here's the thing, right?

6:00The fact that we care about this and we don't care about the other stuff is the problem. I'm going to say to our listeners right now, if you are absolutely losing your stuff about Albo's house and not about, as you just said, Ram, the rest of the policy issues we have in this country, if that's what you're choosing to focus on, then, dear listener, yeah, you're going to switch off right now. You are part of the problem. I'm sorry. It just is true, right? If we don't actually put that aside. Here's the thing. Let's say Albo didn't buy the house. So he's got$4 million in the bank or a$4 million property, either or.

6:30So let's say he doesn't buy the house, gives money in the bank. Do we now not care? Does it now not matter? I've said before in jest, how does it change any single political policy, legislation or execution of the Australian government, whether or not he buys the house? Does it make my life a scintilla better or a scintilla worse if he does or doesn't buy a house? Does it improve the housing policy in this country if he does or doesn't buy a house? Of course not. Now, you mentioned off air, I won't see the thunder, but you talked about the fact that, you know, there is some, it's an outlet of sorts.

7:00Do you want to just talk to that? Yeah. I mean, my only point of view was that I agree with pretty much everything you said there, but people wouldn't be outraged if there wasn't a housing crisis. Yeah. So, and are they, is being outraged by the housing crisis illegitimate? No. I think it's actually. You said we're not outraged by the crisis, we're outraged by the housing purchase. That's my problem. I mean, you would have thought that he had the political wherewithal to realize, regardless of whether it's right or wrong, to just wait eight months till after the election and buy the house. Like, what are you doing?

7:36Sometimes things are just really obvious. I would imagine that they're pretty obvious. But yeah, people, if we were in a situation where, go back a couple of generations where people could buy a house at three to four times average incomes. I don't think anyone would begrudge him. You know, it's the outrage in the context of the current situation. Now, Albo didn't create the housing crisis, but he certainly hasn't helped it. He certainly hasn't put anything in place. He probably made it worse just quietly too. That's not controversial, I don't think. No. Other than for the partisans. Yeah. No, I mean, we've gotten here through decades of very, very poor planning and policy, and both sides of politics have played a huge role in that.

8:22And the current government's just doing absolutely bugger all about it. So that is why people are outraged. Are they focusing on the right thing? Probably not, but I have a huge sympathy for the outrage because it's just like, do something, guys. Do anything, anything, you know. It is the pressure left for it, isn't it? It is, right? But sometimes the magnet that attracts the outrage might not be the root cause, the root issue. There's nothing wrong in it per se, but it's only got an attractive power because of the wider context. And that is a big issue. People are definitely right to be outraged by all of that.

9:06And even if it was like, not that anything's going to solve it quickly, but even if people could see a path out of it or that, wow, it's pretty bad, but gosh, we are moving in the right direction. And, you know, steps are being taken to sort of address this. And it's the hopelessness of the situation that creates the anger. And that anger is going to find an outlet. Now, whether it finds it in a legitimate target or not, you know, again, open a history book. Like, is a mob with torches and pitchforks going to be rational and reasonable and always pick the most reasonable target? No. But are they wrong to be angry?

9:46No, I don't think so. I think that's right. My forlorn hope, my Pollyanna ideological, let's wish the world was better perspective is that as an electorate, we actually should be better at that stuff. Because again, maybe we get lucky and maybe this does become the lightning rod for policy change. If that is the outcome, then frankly, it'll all have been worth it. Is it likely this blows over in a week and nothing has changed in housing policy between now and the election? Yeah, that's by far the more likely outcome. And our rage will go away because we'll forget about it and we'll move on. And that's why I say we are the problem.

10:19I don't say that you are the problem as other people. We, including me, are the problem because we don't spend time thinking about, or I think you and I do a little bit actually, mate, but generally speaking, we don't spend enough time talking about the real issues. we jump from outrage clickbait to outrage clickbait as you know and kind of forget the rest for all of we'll go to the last last parliament for what it's worth i said at the same time by the way when scott morrison went to hawaii the issue was the optics not the reality uh he he was again it became the lightning rod became the focal point because people were unhappy about his prime in general but it was never the issue i mean he you know the old eyes don't hold a hose again was that was the response to the bushfire crisis any better or worse because scott morrison was away of course it wasn't and so you know people say well we expect leaders to do this we expect leaders to do that that's my point it's the expectation is my issue was it silly for scomo to go to hawaii yes was it silly for obo to buy a house frankly yes because he knows what the electorate's like and could he have avoided it by doing something different yes would we then be talking about housing policy no we'd be talking about what's on the block or married at first side or you know whatever the latest outrage was that was confected and an easy lightning rod for argument and i just think that's until we you know there's the old line we get the politicians we deserve i think we kind of get the policy non non-attention we deserve too for exactly the same reasons right this becomes a lightning rod maybe abo loses the election maybe he loses the prime ministership maybe he retires maybe nothing happens what policy change would happen and if the answer was none then it's all been for nothing we feel a bit better we'll get to this you know open the window and shout out the window about how unfair the world is and nothing changed and we wonder why years time nothing's changed it's because we didn't engage with the issues we engage with the the clickbait and the and the news you know the news helicopters flying past the house and taking photos and and all that kind of stuff it's just it's just madness mate and and it's not even about our but it's about us we're not going to get a better outcome as a country until we actually ask our polish to focus on things that matter rather than the stuff that grabs the headlines i will i mean you're right i will put a good chunk of the blame on quote unquote the media at the same time because i mean everyone's just trying to get by right like everyone gets up in the morning mom and dad both go to work they put the kids in child care you slug your guts out you come back exhausted you cooked it like and now i've got to like be some policy wonk where i've got a detailed and nuanced understand or even a capacity to dig into some of this kind of stuff so it's why we rely on the the the media to sort of inform us to ask the questions you know to to lay it all out for us and i know it's an easy kind of you know easy to point the finger in that direction but it's kind of why it's such a fundamentally important institution and i think that's what lets us down i think yeah people are uh uh uh are to blame in where they they focus their outrage and their their attention yeah but the media drives it that way or they play a huge and i don't i'm not even talking about mainstream necessarily or traditional media and social media as well algorithmically driven outrage is far more engaging than than good news and it's just sort of this is you ask why is the media spending so much time covering this because it gets clicks you know that's where i struggle to blame the media this is why i find it i find the media question a really really difficult one because for all of you know let's say reuben murdoch for the fun of it um for all of his supposed views or otherwise i don't i don't suspect he would run a news network that lost money just so he could have a say because if it loses money it means it's got fewer viewers it's got fewer viewers you know we get we get radicalized radicalize ourselves it's a bit of a it's a bit of a self-fulfilling you know prophecy kind of problem here um is the media's fault at some level yeah but they're for-profit independent businesses entitled to their own thing they're not given any special tax treatment they're not and i'm not saying they're doing it doesn't justify your morality in business in general right i'm not going to say people you know companies should screw customers if they can can get away with it because it's legal to do there is there is morality required but the morality required of the media tends to be from our own ideological perspectives the guardians to left wing well news corps to right wing well the abc and i love the poor poor abc i love the abc they can't take a trick the left bag and for being too right wing the right bag and for being too left wing when the abc disappears because both groups hated it so much then people are gonna wish they had maybe been a little more reasonable i don't know i don't i don't and i guess i'm way off track i don't know mate you're absolutely right um they cease to exist if they don't make money they've already got bugger all journalism because the rivers of gold the classifieds went away they're effectively what we didn't really i think ever realize properly at the time was these were classifieds with with sport on the front and use sorry news the front sport at the back right and so what happens if if they if they have less clickbaity stuff in theory they have less readers because they kind of they know that from the data they have less readers have less revenue they have revenue they have fewer staff they have fewer staff they have less content they have less content they have less readers and around you go and i i don't i really i don't have a solution for the media thing it's easy to blame them not i don't mean you it's easy for people to blame the media and say well the media should do this media should do that i'd have taxpayer funding as a solution i don't know if i don't know how you fix it but i do know that they're already i mean they're hemorrhaging right look at the look at the fall of free-to-air tv look at the fall of what we used to call newspapers but what we call them and news websites i suppose just falling circulation falling revenues and to your point they just give us what we want we literally tell them what we want we used to it's like buying Playboy for the articles right it's like we used to pretend we bought the C Morning Herald for the deep political thinking and the policy reviews we didn't we bought it for the crosswords and the comics and the sport and the used Holden Kingswoods for sale in the middle pages yeah look I'm with you I'm not pretending I have an easy solution but it is No, I don't expect you to wear that, by the way.

16:19Part of the problem. Yeah. It's hard. Yeah. Anyway, we've probably done enough of that, I think. Yeah. Oh, can I just say one more thing? Oh, yeah. Sorry. This is very funny. And I mentioned this to you off air. It was the usually when one side of government errs, let's say, the opposition's all over it, right? And it's just like, they've been pretty soft. And it's just like the mood within those chambers is just sort of like, Like no one's going to be shaking their fist too hard because the reality is just sort of like the inner monologue of every single politician of any particular strike is like, please don't look at me and please don't.

17:01That's right. Could you imagine you go, Albo, it's so wrong. How dare you? This is just, you know, it's like, we just looked at the register and you've got eight investment properties as well. Oh, never mind. Never mind. I got no problem with it. It was just notable is all I will say because you cannot confect a rage when you're absolutely in the exact same basket. If people really, you can't, the pot can't call the kettle black, right? And that's interesting. Well, the great thing is when you're in the pot and you get to say, they're calling the kettle black. If I just shut up, you're going to do my work for me.

17:38It's great. Oh, mate. hey um can we i want to talk a little bit about we're talking about interest rates a lot recently i don't want to talk about rates at least not specifically today um what i wanted to bring up there was a report out by ubs um the investment bank and this is not new necessarily either um but it's a nice opportunity i think to revisit the issue basically ubs saying the rba in terms of cutting rates and again we've had a conversation about the rba and listeners know that um but their argument is that the feds are causing problems, obviously, spending too much and not collecting enough and adding to demand domestically.

18:15But on top of that, it's actually the states, in their view, that are adding much fuel to the fire. If you're a Queensland listener, you'll know about the spend-a-thon before the Queensland election going on up there. There's money being thrown around everywhere to desperately try and win some votes. And I thought it was just, given the UBS comment, made a reasonable time to kind of come back this i've grabbed some numbers out of the fin um they came out in june this year and i want to go back to and this again ubs's comments aren't new right so i'm just going to quote an article from michael reed from the fin in june quote the reserve bank of australia board warned on tuesday that increasingly large budget deficits risk stoking demand and economists now predict the central bank's august meeting is live as the rba grapples with persistent inflationary pressures now we know there was no interest rate increase in august but it then has followed by um a graph that Michael Reid and the AFR put together from some S &P data, showing the growth in state government debt over the past five years, or since 2019 anyway.

19:15Victoria's state debt has almost quadrupled. Tasmania, up three and a half times. New South Wales, three times. South Australia, more than two and a half times larger. ACT, more than 200 % larger. In other words, triple the size. Queensland, almost 150 % larger. wa the only state with meaningful resource royalties has actually made it stay pretty flat with where they were in 2019 which is a hell of a result by the way and the total state debts could hit up to 800 billion dollars by 2028 now put about 100 billion dollars in context the federal government debt is expected to hit a trillion dollars at some point i don't know what year it's going to be probably before then but even if it's kind of there or thereabouts the states are adding almost as much debt to our economic circumstances as is the federal government and we kind of focus on the feds because that's the one thing we all have in common and we can kind of roll it up we kind of figure they should be the biggest part and they are obviously as a as a total but the state government debts in general are adding meaningfully to a inflationary pressures b i will say some degree of uh fiscal uh imbalance is the wrong word and i I don't want to overcook it.

20:28We're not in any immediate serious financial risk, but it's making things worse. And I just thought it was worth highlighting on the back of the UBS comment that, yes, we should pay attention to what the federal government are doing, but in particular states, New South Wales and Victoria are the largest in terms of the growth in the simple dollars given how big they are. But I think that's one we're not talking anywhere near enough about, mate. Yeah, it's absolutely huge. And so I was just reading, this might be from a slightly different actually this is from Standard and Pause so since 2019 Victoria's debt has risen sharply it will soon overtake New South Wales by the way Victoria's about 25 % smaller than New South Wales give you a degree of that and New South Wales is growing it's not even like New South Wales is saying still and Vic's catching up New South Wales is growing at the same time so Victoria's to be able to keep up then catch up then overtake is no mean feat honourable mention to Tassie as well They're growing like the clappers.

21:26So by 2028, S &P forecast that Victoria's non-financial public sector debt will hit$260 billion, 372 % above where it was pre-pandemic. And look, the thing that's interesting here is, okay, there was a pandemic, right? So maybe we can put that aside as an anomaly, but for all intents and purposes, that's now over with. And if it had a flat line since then, you'd say, okay, well, we took on some more debt, we haven't yet paid it off, but at least we're not adding to it. where the trajectory is going here. We've got to be so careful about this. I say it all the time is that too often when I'm in conversation with friends and family, it just goes to, well, the government should do something about that.

22:07And they listen. They listen. They hear you and they deliver. But they can't conjure resources out of thin air. They can conjure money out of thin air as it turns out. They just can't conjure. They can't conjure the resources out of thin air. So it's just sort of like someone is paying for that. And it'll be our children and their children that ultimately pay for this because that debt either has to be repaid or it has to be inflated away. And or services have to be cut or their taxes have to be increased. They're going to pay. They're going to pay. And so you've just got to be very – and once spending programs are put in place, look at the NDIS, right?

22:43Very hard to wind it back. and it's just sort of, again, you can apply a lot of hyperbole and stuff here and people will make comparisons with other places and go, well, at least it's not that bad. It's like, yeah, true, but we're just, to use your term, we're the least sick person in the hospital and the diagnosis is not improving, right? Like things are deteriorating. So you can waste your time trying to figure out exactly when and why and how everything just sort of starts to sort of tumble apart but but it's in that direction right like i i yeah i don't know what again what we do about this no i don't either mate and well ironically i guess my point about the media at some level i mean i don't know how we i don't get too broad i've said before mate i probably even relatively recently my suspicion about politics is that it was the self-governing expectation of politicians that kept things on the straight and narrow for a period of time the the you know i mentioned before the barrier fell was on over a bottle of grange and you know imagine the nixon tapes the watergate scandal now it'd be forgotten in three weeks time and nothing would happen right um i shouldn't have done that really bad really sorry i'll be um i'll be uh what's the what's the phrase i'm looking for what happens when a president gets in trouble with congress what do they call it impeached Impeached, yeah.

24:06Impeached. So, yeah, Trump gets impeached or Biden gets impeached and we just move on. The self-governing kind of code of conduct, if I call it, that wasn't ever formal, of what police believe they should have to do, and if they didn't do the right thing, they would resign on principle, has gone by the wayside. And I think if you add that and the lack of media interest in big policy for the reason we just talked about, I don't know how we get any sort of reasonable public – if the public don't care enough about it and the politicians realise they can get away with it, that's that's a recipe for inaction right and that that to me seems like the issue with public debt particularly and you made the point about you know elbow on the housing crisis and the kind of why that's relevant while there is that issue around the cost of living the environment's gone by the wayside there was an article in the fin csmh show this week about the fact that we don't care about the environment as much as we used to a couple of years ago not only we don't care overall we don't feel like we can afford to care because we've got to put food on the table and the same as true of all these other big issue questions if the police choose not to care or don't bother they carry it up while they're trying to do anything about it because it's just too hard and we don't make them, then nothing changes.

25:06I don't know either what we do about it, mate, other than I think from my perspective, hopefully we're adding some small amount of airtime and interest in education here for our listeners. It won't go to change the world, but it's got to come down to us, right? Unless we ask them to make them change, nothing changes and that's probably not great news. Yeah, it's not. And again, just to repeat myself, I think that's all right. and we should all be more vocal and understand the situation better. I get it. But the cynic in me is like, gosh, nothing stops this train. And it comes back to absolutely advocate for the right kind of change, but also make sure that you're structured appropriately.

25:48So this is a finance podcast. Just be very careful with the levels of debt. Some debt, the right assets, not a bad thing. I don't want to be too binary about things. But I think that's something that you want to structure very carefully. I think for those that are fortunate enough to have some spare money and savings and are able to invest that, you want to invest that in some very reliable, safe assets. That's the thing. I did listen to a talk the other day, actually, which was fascinating. And there was an economist, a British economist, making the case for like, gosh, every time there is a financial history, go back 10 ,000 years, they always rhyme.

26:25They're always the same things. And we've got, you know, just go down the list. You can tick off a whole bunch of things that look very similar to how things looked before a lot of other crises. Right. But it's a very doom and gloom, right? You know, right up my alley, right up my alley. Love it. But the concluding comment for the talk really stuck with me. And he said, but here's the thing. Life has always gone on. Yes. like we are we are now at a situation where despite all of our troubles even those that are less fortunate than than average have still got an incredible standard of living well beyond the dreams of their ancestors safety nets health care all this stuff yeah yeah no and that i i do sometimes bristle with that argument it's like you should be happy because you know people in ancient rome couldn't brush their teeth so you should be happy with your lot it's like yeah but we're not there and those people have a lot more than me so i so i don't want to i don't want to gloss over it but the other thing he said was this was that in fact fortunes great fortunes have been made through these transitions whenever there is uh a reckoning of some sorts you know that here's the thing let's let's just play this through game theory this out for a second let's let's imagine a crippling not a recession a depression 10 years you know gdp falls 10 15 unemployment goes to 20 you know all of these terrible terrible things sort of happen well the factories don't go away the capital equipment doesn't go away the buildings are still there the properties are still there there's lots of workers around it people default people on the other side of those agreements lose money but those assets don't disappear someone picks them up for pennies on the dollar someone puts them to work and someone creates value in fact when these transitions emerge you tend to sort of you you you have this sort of creative destruction where a a new uh i want to i'm not trying to use the word class in in it's a loaded term but a new cohort of of uh entrepreneurs capitalists emerge from the ashes in fact better than they ever went into it now we're not all going to be the you know jp morgans of the of the next turning but we can actually we can actually make sure that ourselves and our own are very well protected and in fact even positioned for it so it's sort of like i i think that's the optimistic take on all of these kinds of things which is don't be concerned um don't go into prepper mode because that's not going to do anything you know like by the time that the prepper stuff helps you it's a bad situation anyway you might have two years worth of food but you are literally fighting people off your front door you know it's just like roaming mobs of of uh starving people it's okay you know it's open either way yeah it's dystopian either way so assuming we don't get to mad max sort of levels of civilizational collapse which i don't think we will um uh you you can you can i wouldn't say thrive but you can be the kind of person that's got the capacity to take advantage of these situations and and it's the best you can kind of i don't want to i've got to be careful with this too because it's making it sound like hey the world's going to go to hell in a handbasket but you're going to make a lot of money.

29:54That's right. You climb over a whole pile of bodies if you want. Yeah, that's right. I don't want to say that. And I'm here on a public post shouting it to the world. Like, gosh, we're really in a bad direction. We really should change course. But if we're not going to, I'm at least going to do whatever I can to protect myself. And I think listeners should think about that too. And that doesn't mean leveraging up 10 to 1 on 20 different investment properties where a 5 % drop is going to wipe you out. That is not the way to handle that situation. You know, we've said before, optimize for endurance, don't optimize for profit maximization.

30:27And yeah. And ironically, optimizing for endurance actually inadvertently does optimize for long-term profit creation and wealth creation anyway. Well, I think you've got to stay alive, right? Not going back to square one at any point during that journey. You can double your money every coin toss for 49, but on the 50th flip, if it comes the wrong way, you're still wiped out. So, you know, making sure you are prepared for that outcome, it's literally taking money off the table. It's all those things, just making sure you're not exposed to individual risks. I know you mean this implied in what you said, Ram, but even just to survive and be okay.

31:00When we say thrive, we don't mean beat off other people or get rid of others' expenses necessarily. It's just literally you have the resources, you have the investments, you have the structure to see you through so you don't go back to zero. I mean, that alone is enough, right? And then on top of that, if you can make some money, then by all means do it. But that idea of just being ready for whatever circumstances throw at you, yes, to maximize the opportunities when you get there, but even just to get through that in the first instance, right? Not go back to zero, to be alive when the recovery comes.

31:27I don't mean literally, but I mean financially alive, to be in a decent position. At the end of the day, kind of, you know, that's – particularly once you get past a certain point in cash. We have a lot of people, you know, who write in the mailbag and say, I've got$85 million. How do I get to$100 million? Very reasonable question. Very fine question. no issues with it. Other than at some level of wealth, you really should start to turn your attention to making more is good, not losing what I've got is better. And if you've got$15 and you're going to retire next year, have a fly on the horse if you need to.

32:00But if you've got a million dollars and you're going to retire next year, trying to get to two versus making sure you don't go to zero, it's a million dollars either way. The statisticians would say that's the same outcome, right? 50 % chance of 2 million, 50 % chance of zero, the expected value is now a million dollars that's fine the rest of us in the real world would say yeah but having two million dollars having zero you know the average is still a million dollars but there are two people living very very different lives i'd happily take a you know 90 chance of not losing a hundred thousand dollars with a 10 chance of getting 10 million dollars it's just not worth the it's not worth the gamble because you don't get to play that game 10 times you play it once so making sure you minimize your chances of permanent loss particularly at a certain level of wealth i think is far more important oh yeah and i don't think it needs to be seen as something it's just sort of like it always happens again historically it's like those that that are more conservative position more appropriately and ultimately benefit even if it's they might be on nominal terms going backwards themselves but relatively go forward to a very large significant degree which is what matters right so everything's sort of a relative game here yes there there is there is always resentment it was i didn't do anything wrong you got lucky there is all what there is always that kind of stuff and it's it uh it's unfortunate but it it's not i mean the great i think crime of economics or at least in the way it's often interpreted is that everything is framed as a zero-sum game yeah and it's not you know it's just like just if i get rich i don't it doesn't it doesn't automatically follow i've done that by making other people worse off in fact if i've done it right well if the system is appropriately structured the only reason i've gotten rich is because i just created an insane amount of value for a lot of people people wanted what i had to offer yeah exactly yeah yeah so like i had something i sold it to you not because i put a gun to your head because you said can i buy that off you and okay here's the price yes i want that we traded it's worth it to me that's right we were both better off afterwards and and here's the thing it's like when you go through i mean it's always hard not to mention buffett so let's throw the first one in is um again when when the next crisis happens and everyone's ringing him to ask for him to help out i mean yeah there'll be resentment and the rest of it but thank goodness there are people out there who can take ownership and productive and and and good product make good productive use of the assets that they acquire are they getting it for a steal yes you know um but but but it's it's it's those it feels like i'm trying to sort of rationalize the the greed here but it's not it's not really i deserve to get rich scrooge mcduck was really a humanitarian well think think about the counterfactual there's no one there's no one who can acquire it it's like well then what happens right like i i do i want do i want the tip-top bread factory to be mothballed or do i want someone to come in and and make sure that it's working and employing people and throwing out bread that we can eat like that's good oh but that person got a bit richer than than i did yeah okay well let's get rid of them and close the factory and then see how we're going to go right someone's going to do it so it's just the way of the world someone's people are relatively things are the deck chairs are going to be moved around some people in any transition will come out ahead of others some people will come out worse off so you know that's going to happen either way so make sure it's those people who lose right but exactly that's right yeah i'm not saying throw them to the lions i'm just saying that like we're getting to this situation because of our profligacy, because of our inability to plan, all of these kinds of things.

35:34We brought it all upon ourselves. You know, okay, it sucks. Let's eat the rich is not the answer, right? Actually, by the way, when that all happens, and I say when, not if, but that when could be 20 years away. You know, it's not as though, what am I trying to say here? When it eventually sort of comes out that way, you will find that it offers a great reset in a way where we come through, we'll go through a painful period, but we'll wash out. What do they call it? The economists call it creative destruction. And it's horrible. It's horrible, you know, for those that aren't positioned well in it.

36:16But it clears the system out of all the bad investment, of all the misallocation of capital, of all of the incredible waste that's there. It refocuses the mind. It enforces discipline back on business, you know, and it just, it makes, it usually, and again, things go in cycles. Again, open a history book. It's always disastrous, but on the other side, you usually have decades of incredible prosperity on the other side of it. So, you know, I would prefer not to get into, you know, to see Rome burn before we get there. But if that's the way it's going to go, at least, there are still reasons to be optimistic and you can make things for your personal lot more optimistic than they would otherwise be, I guess is my point.

36:59Nicely put. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener.

37:10Mate, the federal government has announced, and I really... I know where you're going. Here we go. Has announced they are going to ban debit card fees. They've also previously, and this didn't get as much reporting, funnily enough. I don't know why. Maybe slow news week this week. In the past, they've asked the RBA to look into the credit card surcharges. Now - That's why I've got a cost of living crisis. Thank goodness someone pointed out the right, the appropriate bad guy. This is the flip side, by the way, of RBA's house purchase, right? Because yes, I'm saying, you know, you shouldn't get whacked because of the, quote, optics of a house price purchase.

37:49On the other hand, And the government are very comfortable, very happy, taking advantage of the optics of fixing credit card surcharges like it's the solution. And there was the usual rubbish, you know, hyperbole from the government. What was the – they're stealing from our bank accounts or something stupid. The line of, you know, we should be charged to use our own money type. It's all a bit dumb. Can you imagine the kitchen table discussion with your partner? It's like, gosh, honey, the health care costs have gone up and rent and mortgage payments are through the roof and we can barely afford to fill the car.

38:23But I have a solution. I can't send the kids to school. But wait a second, I paid$5.08 for that coffee instead of$5. That will fix the problem. And again, this is optics in the other direction, mate, because you've said that. I've said that on radio and other places, right? All true, all true. And yet this thing is just going bananas on TalkBack, on bricky TV because everyone hates the surcharge so much. The government will get a, you know, they'll get whacked for Albo buying a house and they'll get a benefit for taking my 20 cent FPOS or 8 cent FPOS bloody charge or my credit card surcharge off when I pay my coffee.