Best Finance podcasts in Australia

best finance podcasts

The temptation for high income earners is to outsource. This is fine with cooking, cleaning and many other tasks.

But when it comes to looking after your money, you cannot completely trust anyone. Everyone needs to educate themselves enough to avoid getting ripped off.

Asking Wall Street to provide financial education is the same as asking a fox to raise your chickens.

Robert Kiyosaki

Most large Australian financial institutions turn out not to be trusted. Despite the financial services Royal Commission, a browse of the Commsec Education centre displays pretty obvious manipulation of beginner investors.

To be fair, Commsec has a lot of great educational content introducing to investing. It’s just that newbie investors may not attempts to encourage trading frequently to increase Commsec’s profit margins. Trading frequency is a huge factor in destroying investment returns.

Many busy professionals would prefer to find a financial advisor they can trust. But unfortunately, finding one is not easy.

Advisors hide fees in complex products, and many are trained primarily as sales people. Without financial literacy, you won’t even know your being ripped off.

How to Education Yourself

Financial education, like anything, is best improved with a regular schedule of information consumption. You will gradually build knowledge and understanding. One day, you will realise you are very knowledgeable and your colleagues and friends start coming to you for advise.

But knowing where to start can be overwhelming. With any informatio format, there are those that are going to resources that are inefficient, inaccurate and even outright scams.

If your a reader, check out my list of best personal finance books.

If you prefer video, youtube has lots of personal finance videos (and lots of rubbish, watch out). I am not much of a you tuber, so this is just a random page of “You tube finance videos”. I will put in some research and publish a short list of good you tube resources. Watch this space.

Then there are blogs like this. There are many personal finance blogs overseas, and a growing community of personal finance bloggers in Australia. Subscribing to a blog that you find pitched at the right level can drip feed useful tips straight to your inbox.

Commit to reading an article a week and next year you will have significantly improved financial literacy. Bookmark your favourite blogs for those times you want to read up in more depth, or need motivation.

Check out the Wealth strategies index in this article (scroll down). Here you will find links to the investing plans of many of my favourite bloggers.

Awesome Personal Finance Podcasts

Blogs are great for building knowledge, and can present more complex and visual information. But most of us are time poor. Podcasts offer a way to create something out of nothing – financial literacy from your otherwise unproductive drive to work.

Committing to listening to a podcast on the way to or from work daily is a great way to build financial knowledge. It’s good to have more than one source, and listen to different opinions.

I am a huge podcast fan, but I hate committing to a pod at the start of a drive and then finding it of little value. Worse, if you are unknowingly listerning to a scammer.

I find the 20 minute commute so powerful in building knowledge.

Some podcasts contain a lot of chat. If your looking for entertainment this is fine, but I get annoyed by too much fluff. Many financial podcasts are US based. They can still be really valuable, but not as useful as having Australian specific information. It is absolutely no use learning about 401Ks and Roth IRAs here, there are no exact equivalents here.

Other podcasts are thinly veiled advertising, having guest speakers spruiking their services with little balance and contextual information. Of course podcasters need to get paid for their work, but you need to be aware of conflicts of interest.

It can take a while to find the podcasts that are ideal for your needs, with just the right amount of banter to keep it interesting. You need the content pitched at the right financial literacy level.

I am hoping this list will help you shortcut the process. I have presented according to the type of listener that I think each podcast will suit.

Easy Personal Finance Podcasts for the Overwhelmed Beginner.

The Australian Finance Podcast by RASK Investing is run by two young finance professionals starting their own financial education and investment advisory side hustle. They produce a good, basic personal finance podcast covering the fundamentals in a logical order. It is best to start from episode 1. They include light banter that I found made the episodes more entertaining without becoming distracting.

Those with financial concepts under their belt may find this a little too basic, but it is ideal for complete beginners and those that want to make sure they are not missing any important concepts. These guys do some advertising, and guest speakers but a lot of exploration by the hosts of concepts. They are trying to sell their investment newsletter subscription on the website.

Dev Raga is another Australian doctor who has been podcasting for a few years. He produces a great peronsal finance podcast. The episodes are simple and too the point with no fluff. They (especially the early episodes) cover the basic concepts. He has branched out into centering his episodes around common questions from listeners. I’d advice starting at episode 1 for true beginners. They also have a good selection of free financial literacy courses on their website, including a step by step guide to getting started investing in the stock market.

Dev Raga hasnt yet monetized his podcast, so all the information is laid out based on his own research and opinion.

Best Finance Podcasts for Investors Needing Motivation and to Continue Improving Knowledge

Choose FI This is US based, so if you don’t like listening to US based things at all, don’t bother. But the Choose FI podcast is incredibly motivating. Two energetic and enthusiastic hosts explore a lot of finance, hacks, and new ways of thinking about your finances. This change in your thinking can be really helpful if you are wanting increase your savings rate. The hosts often point the ridiculous in our consumerist culture. They also have a huge website. There is some advertising and they sell books and some courses.

The Joyful Frugalista produces ~ 30 minute podcasts on a broad range of topics related to finance. From saving money, investing, cooking and more. A chatty podcast, it’s a pleasure to listen to. The guests don’t all seem to have something to sell which is refreshing.

Aussie Firebug – The first Australian finance blog I stumbled upon, and now a great Australian podcast covering a range of topics related to finance and investing. A little advertising that can be skipped. Episodes include a mixture of Aussie Firebug explaining concepts and guests.

Top Finance Podcasts for those Looking for advanced strategies and tax tips

The White Coat Investor US doctor – investor. The ultimate US resource for high income earners wanting to invest. Advertising and guest speakers but lots of great content in between.

Investopoly A top Australian personal finance podcast by Stuart Wemyss at Prosolution. The podcast shares so much insight into a broad investing strategy, tax and all thing relevant to an Australian investor. His conflict of interest is that he runs Prosolution Private clients – a financial advice, accountant and property investment advisory. His book “Investopoly” is excellent. The book and podcast are one of the few that doesn’t push property OR shares but covers strategies to include both in your portfolio. The episodes are short – 15-20 minutes long, contain no fluff or advertising with each episode leaving with you a greater understanding of the concept discussed.

Greatest Australian finance Podcasts for Property investors

The Property Couch Australian and pure property. Easy to understand, absolute gold information on how to approach investing in property. Start with episodes 1-20 before either skipping to the current episode, or attempting to catch up. Long 1 hour sessions that will completely absorb you in. A bit of annoying footy chat that you can skip past before listening. After that, just enough banter to make the content entertaining.

The Elephant in the Room Copious content on property investing. Intermittent guest appearances. A robust and often brutal discussion of property investing fundamentals and “Property dumbos” (errors to avoid). I think it’s useful to have a second opinion to broaden my thinking from the Property couch. Hosts are a buyers agent in Sydney and a mortgage broker, but they don’t seem to push their businesses apart from mentionning at the end that you can reach out if you want to hire them.

Inside Commercial Property A young podcast that is showing good potential for those of us searching for information on commercial property without having to deal with the hard sell. Only 11 episodes at this current time, with an episode every month so far. A chatty format, but with some useful ideas and concepts. Hoping for more great content.

For commercial property. there is Property Briefings as well. You have to apply to access the podcast, but they don’t seem to pester you for up sells (perhaps my spam filter dealt with it). I do find the content pretty dry and have to be in the right mood to listen.

Awesome Podcasts for Motivating Wannabe Entrepeneurs

Rebel Entrepeneur – Warning! Do not listen to this podcast unless you want to start a business. UK based Alan Donegan unbelievable and energy and enthusiasm is highly contagious. Incredibly inspiring and practical tips on how to start a business without going into debt.

How I built this – I also love this US based podcast where Guy Raz interviews people who have been hugely successful in starting a business. They tell they’re hugely inspiring story, often bootstrapping a business against all odds because they had a great idea and had the audacity to give it a red hot go. Fascinating listening! Less informative, but I love it for the motivation and encouragement to keep going.

I have shared many of the best finance podcasts, I hope I have helped you find one you love. Have you already discovered an amazing podcast I haven’t? Comment below to share it and explain who it is great for.

Aussie Doc Freedom is not a financial adviser and does need offer any advice.  Information on this website is purely a description of my experiences and learning.  Please check with your independent financial adviser or accountant before making any changes.

How to Improve Your Returns? # Invest Like a Girl

I got the chance this week to guest post over at the amazing US investing doctor’s site – The White Coat Investor. I stumbled across the White Coat Investor’s “Live like a Resident” article many years ago.

The idea resonated with me and gave me confidence in rejecting the “doctors’ lifestyle” to pursue a life focused on our values.

When first trying to work out how to start my investment journey, the task seemed overwhelming. The media often portray the stock market as a grand casino, fueled by testosterone, sexism, and cocaine!

Sites targeting female readers often focus on cutting spending, paying down debt, or worse, use shopping and fashion analogies to explain financial concepts (so that ladies can understand?!) Improving financial literacy is a worthy goal, but the readers of this site are intelligent, ambitious and capable.

I can’t be the only woman who has felt patronized, discouraged, and intimidated by the world of investing.

What Does it Mean to Invest Like a Girl

The funny thing is, there is actually a lot of evidence that women who dare to invest perform, on average, better than men.

More female finance professionals and role models are needed to move the perception of investing away from a man’s sport. The readers of this blog, and our colleagues, are intelligent, educated high-income earners. We need to learn to invest and have the confidence to actually turn those high salaries into wealth. I hope our daughters will feel as empowered and strong as those in this video.

Throw like a girl, run like a girl and invest like a girl

Inspired by the #likeagirl campaign, I explored what it really meant to “Invest like a girl”.

I had a hunch that women would on average, have temperaments more suited to being good long-term investors. I was quite surprised by the amount of studies I found supporting this. And really confused as to why I had never heard of any of them before.

We all have different risk tolerance and confidence levels. Regardless of your gender, I think investors can learn from the research into women investors and the factors associated with improved investment performance.

Read the full article outlining the evidence about what behaviours makes women investors perform better.

Aussie Doc Freedom is not a financial adviser and does need offer any advice.  Information on this website is purely a description of my experiences and learning.  Please check with your independent financial adviser or accountant before making any changes.

Looking for the Best Australian Online Bank? Up Bank Review

There are several online bank account providers that provide far better value than the big four. This Up bank review compares the new Up bank offering with other popular online banking providers. Compare the features to work out which product is best for you.

If you are still paying monthly banking fees, ATM or international transaction fees, it’s time to switch accounts. These online banking products provide better value and faster transactions than the big Four.

At bare minimum, Australians should be paying no monthly fees for banking, and have access to a good range of ATMs fee free.

Up Bank Review – Is My Money Safe with an Online Bank?

The Australian financial claims scheme guarantees savings with all licensed “deposit taking institutions.”

An individual can have up to $250,000 in cash savings, a couple $500,000.

If the deposit taking institution becomes bankrupt, the government are protected and repaid by APRA. ING, ME Bank and Up bank are all covered by the government guarantee.

A Summary of Features with ING, ME and Up Bank

 INGMEUp Bank
Account keeping feesFreeFreeFree
ATM FeeALL ATM fees refunded as long as: – –Deposit $1000/ mo -Pay using card 5 x mo (or apple/google pay) -Grow savings maximiser every monthRefund of all Australian ATM feesFree at major banks if 5 purchases made using card, google pay or apple pay
Interest Paid April 20211.35% in attached “Savings Maximiser” up to $100,000 0.05% on cash left in everyday account1.1% on up to $250,000 – Need to make 4 monthly tap and go purchases0.7% On up to $1Million
Overseas transaction fees100% rebate of ING international transaction fee of  up to 2.5% of the international transaction.
Refund of international ATM fees
$4 international ATM fee (on top of overseas ATM fee) 1.5% transaction fee on international purchasesFree major bank ATM withdrawals No international fees
Overdrawn interest rateNo dishonour fee (will just not allow transaction)$15 overdrawn fee11.23%
Round UpCan be set to “round up” and deposit remainder of $1 – $5 into savings accountNot internally with ME bankRound up feature available
Instant Transfer of fundsOSKO
PayiD
Bpay
PayID
OSKO
Bpay
Bpay
PayID
OSKO
Spend trackingNoNoYes
Ability to split savings into categoriesOnly one “savings Maximiser” account allowed linked to each everyday account.  ING do allow multiple accounts to be opened thoughAllows multiple savings accounts for an everyday accountYes – “Savers” can name according to goals.  Unlimited number of savers. Only 1 debit card comes with the account though
Other ProductsCredit cards, home loan, personal loans, superannuation and insurance1% for any “Pink account” card transaction is donated by ME bank to the national breast cancer foundation Credit cards, home loans, term deposits and personal loansSpend tracking – great for those with all their banking in one place

ATM Fees

ATMs seem to be disappearing from our local shopping centres. With pay wave becoming increasingly available, with need cash less and less.

When I do need cash, I find it’s because I’m at a small merchant outside a major shopping centre and am often needing to use an expensive independent ATM.

If your life is already completely cash free, ATM fees are probably not that important. A one off payment of $2-4 is annoying, but no big deal. If you are withdrawing cash monthly, you will want to eliminate fees.

Up bank offer free ATM withdrawals from major bank ATMs, which is adequate for those that rarely use cash.

For those that want completely free ATM access, ME bank offer this without annoying terms and conditions.

ING also refund all ATM fees, but you have to meet a list of demands each month to be eligible. These terms aren’t too onerous for me, because my ING everyday account is used as my “blow it (splurge) money, and I use it regularly.

I can deposit $1000 per month into my ING “Splurge money” account and then transfer the excess back to my primary offset account. I use my card for splurge purchases via paywave 5 times a month or more without any effort.

The new condition that you have to grow your savings maximiser each month could be met by depositing $1 in the account each month, if you weren’t using the savings maximiser for anything else.

If you have a mortgage, and offset account makes far more sense for savings anyway.

Up Bank Review – Interest Earned

Up bank is the lowest interest payer of the group. If you are not planning to save significant amounts in this account, you probably should ignore the interest.

For $5,000 savings over a year, the difference in interest between Up Bank at 0.7% and ING at 1.35% (if you meet all T&Cs) is only $32.50.

If you have a $30,000 emergency fund kept in the account, you could earn an extra $195 by going with ING.

If all savings are kept in an offset, and your online bank account will hold less than $1000, pay more attention to other features that may benefit you, such as free ATMs and international transactions.

Overseas Transaction Fees

How much do you spend overseas? You don’t have to be an international traveller to get hit by these charges! Some operators in Australia are based overseas and you can get hit with sneaky internation transaction fees as a result.

If you do a reasonable amount of online shopping, you are likely to benefit from free international transactions. You can get international transaction fee free credit cards. But, if you need cash overseas, withdrawing cash from an ATM using your credit card is likely to incur a hefty “cash advance” fee.

Up Bank and ING offer free international transactions and ATMs, ideal for those of us dreaming of an overseas holiday.

The international fees listed above are a reason to avoid ME Bank unless you are sure you will not use the card for international transactions or ATMS.

Overdrawn Fees and Charges

Hopefully you will not become overdrawn, but if you do ME and UP bank will both sting you with fees. In contrast, ING simply decline the transaction but do not charge dishonour fees.

Round Up Feature

This feature has become a common offering over the last few years. When you use your debit card, the virtual “change” is transferred to a savings account, mortgage or investment account.

It is a feature that is available with RAIZ from any bank account. I do not personally find it useful, but I can see it would useful for those struggling to save.

The ideas is that if you spend $2.50 on a drink, depending on your settings the 50c change from $1, or the $2.50 change from $5 is swept into you savings/investment account. It is a virtual version of the spare change jar.

Tiny amounts of money are involved. Savers should quickly graduate from this to saving and /or investing designated amounts each pay cycle.

If this feature appeals to you, you could use the internal feature with ING or UP Bank, or use RAIZ of similar with ME.

Up Bank Review – Instant Transfers

Any of the online modern banking products offer OSKO and PayID as well as Apple and google pay. Instant money transfers are convenient.

The big banks seem to lag behind with this, but any of the three products discussed in this article allow instant transfers.

Spend Tracking

Spend tracking is the great new alternative to budgeting. I find this so much more helpful.

Instead of writing an ideal budget that fails to anticipate all the unexpected expenses that inevitably come up, spend tracking actually keeps track on what you spend on what. Savers can then review spending categories each month and work out strategies to cut back.

UP Bank offer spend tracking with their bank account. This is no use if you have multiple bank accounts and credit cards. For those starting out with a single bank account, they may like this feature. They could also probably just categorise the transactions manually.

Spend tracking really comes into it’s own when spending is occurring using multiple cards and accounts. It is really hard to keep track of manually!

Banks currently still don’t allow you to share log in details with apps such as Pocketsmith. The safest option is to upload banking data in to the app. Hopefully with open banking this will become acceptable and easy.

Up Bank Review – Multiple Savings Categories.

Up bank and ME both offer the option to divide your savings into different buckets. This will suite Barefoot investors and those who are always saving for multiple goals. An excel document is an easy work around for those that prefer features with ING but still have a lot of goals to work towards.

Up Bank Review – Summary

Up bank provides a great bank account, with free access to major bank ATMs, international transactions fee free and no monthly account fees. They offer a round up feature, spend tracking and the ability to split your savings into multiple categories.

Those wanting to store thousands of dollars in an account may prefer a higher interest option. Those concerned about being stung with overdrawn fees or wanting to access all ATMs free may prefer ING.

How To Utilize Rentvesting Successfully

Many of us have been urged by well meaning family and friends to “Get a foot on the property ladder” as soon as possible. Are you considering rentvesting but are unsure whether it is the right move?

Young professionals often need to move frequently for career progression, and so home ownership is not an obvious choice. Unless the property meets strict criteria it is better to rent than buy. Others may want to live in an area they cannot afford to buy in (yet).

This article will cover the rentvesting pros and cons to consider when deciding whether to execute this strategy. Find out more about opportunity cost here.

What is Rentvesting?

Some choose to continue renting, whilst purchasing property as an investment elsewhere. This is known as “Rentvesting”.

How Does the Strategy Work?

Rentvesting is traditionally recommended for those that want to buy whilst still maintaining the lifestyle that comes with living close to a capital city.

Properties in large Australian capital cities are unaffordable for most first home buyers. Because of low rental yield (~3% of purchase price), capital centre properties tend to be significantly cheaper to rent than purchase.

As rental income contributes to calculating borrowing power, buyers can often buy a more expensive investment property than principle place of residence (PPOR).

Traditionally, rentvesting involves buying cheaper properties further away from capital city centres, with a higher rental yield.

The idea is that the rentvestor rents, whilst holding an investment property in a less desirable area, that grows in value over time.

This strategy uses the rentvestor’s borrowing ability in the short -term. Hopefully an increase in investment property and salary over time eventually allow the rentvestor to purchase a PPOR.

In the meantime, they have grown their net worth far more than if they were just renting.

Rentvesting Cons – Why may Rentvesting be a Bad Idea?

Whenever considering a financial strategy or investment, it is best to consider risk in investing first.

Interest Payments Can be “Dead Money” Too

The most obvious challenge in this strategy is that buyers are likely buying lower capital growth potential properties.

Not every property value will grow above inflation. Some will fall in value. There is no guarantees fallen values will recover in a reasonable time frame.

Those that brought during the WA mining boom have had a painful journey as property prices slumped for many years. Hopefully, prices are finally recovering. But it’s not obvious which of the current property booms are actually bubbles, about to pop.

A common warning from parents is that ‘Rent money is dead money”. Interest payments on underperforming property is just as dead as rent money. Perhaps worst, as it may prevent you from buying further property if you have more loan than property value.

You May Want to Purchase Your First Home Earlier than Anticipated, and Not be Able to.

An investment property will utilise your borrowing power, and limit future borrowing.

Life seems to change far more quickly than many of us anticipate. Using up your borrowing power on an investment property can mean rentvesters are then unable to buy their first home when circumstances change.

Loss of First Home Buyers Grant Eligibility & Capital Gains Exemption

The other obvious challenge with rentvesting is that buyers lose out on the first home buyers grant. They also miss out on the capital gains exemption they would benefit from in buying a PPOR.

To be eligible for the first home buyers grant, a buyer must move into the property as soon as practicable after purchase. The first home buyers grant should not influence your choice of property or strategy. It is often priced into the asking price (particularly with house and land packages). But it is a bit of a disappointment to miss out, all else being equal.

Your home, as long as you have moved into it once purchased, is exempt from capital gains tax on sale. Many of our parents’ properties have tripled, quadrupled or more in value over 30+ years. Not a cent was paid in tax on that gain, which is unbeatable value in investing.

Any property brought and rented out will be liable for capital gains tax on sale, which creates a substantial dent in profit.

In an ideal world, you would own your PPOR in a high capital gains area, hold for the long-term and sell for a tax free profit decades later.

Taxation on Rental Income

Positive gearing

Any rent recieved will be taxable income. This will eat into the difference between the rent you recieve on your investment property, and the rent you pay for your home.

As you progress in your career, and consequently move up tax brackets, tax will become more substantial. 45% of income is lost in tax if the owner earns more than $180,000.

Negative gearing

If you are paying more investment property interest and other expenses than you recieve in rent from your rental property, it will be “Negatively geared”.

This means, each month you will have to put money into the property for the benefit of owning it. This can obviously impact on your current lifestyle, and type of home you can afford to rent.

Tax benefits soften the loss, and these become more substantial the more you earn.

The most important thing to consider here is that you can definitely afford to hold the property long-term. Needing to sell a property before it has grown enough to recoup costs is financially detrimental.

Rentvesting Pros – When is Rentvesting Worth it?

Capital City Renters Who Can’t Afford to Buy Where they Want to Live

Rentvesting suits those that have a long-term plan not to buy a PPOR. The strategy will suit those on moderate and stable incomes, as taxation of rental yield will not eat into the strategic advantages.

The problem with renting instead of buying is often that the extra cash not spent on repayments often disappears into unnoticed discretionary spending. Check out this article on DINKS and the incredible efforts marketing departments make to sell you things you don’t need.

It may also suit those who have purchased a property previously, and so are already ineligible for the first home buyers grant.

The investment property should be selected with extreme caution. It should have reasonable capital growth prospects, as well as rental yield. You want to be sure the property will be worth more than it is at purchase in a few years, and that you can afford to hold it long term.

This does not suit those who could just do better by purchasing a smaller property with good capital gains prospects, and upgrading in a few years.

Traditional Buy Well and Upgrade Strategy

Buying a basic property in a good area and upgrading over the years is the traditional route. People aim to get their “Foot on the property ladder” with a basic property with the purpose of growing equity and moving (sometimes several times) to get into their ideal home.

No tax is paid on profits, which is a big motivator for those following the traditional route.

Being a multimillionaire on paper is all very well. But if all your net worth is tied up in the property you live in, it provides little freedom.

Equity from your PPOR can, however be used to fund other investments to start building passive income streams.

This strategy will work well for those wanting to live and work in capital cities, with great capital growth potential.

Reverse Rentvesting – A Strategy for Doctors

Reverse rentvesting is taking the traditional concept and turning it on it’s head. This strategy is suited to those living rent free, or subsidised rent, moving regularly or living in an area with poor capital growth expectations.

Accommodation for workers in rural areas is sometimes provided free or cheap. Health care workers are often paid extra to work in remote areas, making this a powerful strategy of geographic arbitrage.

This strategy aims to buy a better quality property as an investment than the home the buyer lives in. It exposes the rentvestor to strong capital growth markets, even if they don’t live in an area where this is relevant.

It also suits those with careers that require them to move regularly. Doctors in training often move every year for several years, making buying a PPOR impractical.

With no intention to settle in a particular area for several years, buying in a strong capital growth area will allow the buyer to leverage savings.

By purchasing high quality property with capital growth potential ,they can utilise tax benefits of negative gearing. The equity produced by increasing property value can compound tax-free for years before the property becomes positively geared.

An Alternative – Share Market Investing + Renting

An alternative to rentvesting, is simply to take the extra cash freed up by renting in stead of buying and invest in passive index funds.

This strategy can be worked out over a weekend and involves a lot less asset selection risk.

If renters can tolerate the volatility of the stock market, it also preserves liquidity so investments can be cashed in for a property purchase at a later date.

This is definitely an easier option, and involves less commitment. It also is likely to be less profitable than a well selected property, due to a lower level of leverage.

An Alternative – Serial Buying and Converting to Investment Properties.

This is a favourite amongst professionals required to move regularly. They purchase where they work, take advantage of the first home buyers grant and meeting all eligibility criteria before moving out.

After moving out of a home, owners can maintain their capital gains exemption eligibility for up to six years if they occupy the property again before sale.

On moving workplaces, they rent the old place out and buy again in their next location. It is a low hassle way to build an investment property that can work out well.

It can also easily build a property portfolio filled with poor quality If working and living in regional areas, the likely outcome is poor (or negative) growth in value, and rental income that is increasingly taxed as the owner progresses up pay grades.

The critical issue, is again, asset selection.

If purchase locations are selected carefully with an investor mindset, this can be a strong strategy. This strategy is not likely to work out well for high income professionals working in regional areas. If able to buy and live in strong capital growth areas, this strategy can supercharge wealth building.

How to RentVest.

The first step in making any major financial decision is working out your long -term wealth building plan. Working out whether home ownership is the right choice for you at the moment should involve maths as well as emotions. Then, decide whether an investment property should be part of your asset portfolio.

If you decide to purchase a property, location and asset selection are critical in ensuring the financial outcome is a positive one. A lot of research and/or professional advice should be involved.

Storing your emergency fund, and additional savings in a mortgage offset, rather than paying off the home loan maintains flexibility and maximum tax deductibility potential.

Most important of all, don’t just buy any property. Remember interest payments can be dead money too.

Have you rented and invested? What’s your choice of strategy and why does it suit you? Comment to help those still trying to calculate the best move.

Aussie Doc Freedom is not a financial adviser and does need offer any advice.  Information on this website is purely a description of my experiences and learning.  Please check with your independent financial adviser or accountant before making any changes.

Don’t Want to Retire Early? You Need to Follow FIRE

I’m glad you don’t want to retire early. I guess you made great career decisions.

But have you thought to consider your worst-case scenario?  The situation you dread, although it may never become reality?

It’s awful to consider, but if a loved one had a significant health crisis would you want to move closer?

What if the health crisis was your own?  Would having a year’s worth of living expenses make a difference?

Also consider if you were exactly the same person 10 years ago as today? How will you (and your aspirations) change in another 15 years? It’s hard to know!

Love My Job & Don’t Want to Retire Early

Doctors and other high-income professionals have spent years fighting for selection into highly competitive training programmes. They spend years training and then perfecting their art. 

An individual does not achieve these successes without extreme dedication, single minded determination and grit. 

As a result, when stumbling across the FIRE community, many of these professionals don’t see the appeal. 

Quitting has never been an option for these high achievers.  They are driven to succeed, and gain a lot of personal satisfaction by achieving expert status in their chosen profession.

Sometimes, however, a dream job becomes a nightmare. Some savings and investments and a gap between income and expenditure provide more flexibility to pivot to a new dream job.

FIRE Doesn’t Seem that Appealing to High Achievers

When first reading about financial independence, most are shocked that young investors are saving 50%+ of their income. These individuals are often looking to escape a job they don’t enjoy. Some document stories of extreme sacrifice and cheapskatery along their journey.

Their aim is to reach the point where investment income can fund their living costs as soon as possible. Then, they assume, they will retire to the beach and watch Netflix.  This looks pretty boring and uninspiring at first glance.

FIREYs are High Achievers Too

What many do not realise is that they have lot in common with “FIREys”.  Those that manage to achieve FIRE display the same dogged determination and single mindedness, in achieving their big hairy audacious goal

They are driven, intelligent, high achievers.  Very few (if any) simply “Retire” once financial independence has been achieved. 

For those that don’t enjoy their day job, quitting is a strong motivator.  However, these job haters will usually move on to other income producing activities, guided by what they actually enjoy.

They often think they want to retire early, but in fact end up discovering that productive work is important for happiness. Movement towards financial independence can provide the confidence they need to quit a miserable day job and give it a go making income from a passion.

But many others are already lucky enough to find fulfilment, enjoyment and identity at work. Financial independence simply provides more options, choice and flexibility for a future that is still unknown. 

These people are in less of a rush. There is no situation they are trying to escape from. They have an intentional life design.

Their life is probably fairly close to their ideal life. Optimising spending allows small changes to make life even better. Savings and investments also provide lots of flexibility in case of a change in situation or new interests. This flexibility is not dependent on financial independence, but gradually increases as savings, and wealth grow.

Health Crises Can Happen to Anyone, at Any time.

It is natural to consider yourself invincible. Yet we all know people whose lives have been turned upside down by illness or injury. Insurance is important in providing financial support in case of such events.

Income protection will cover up to 75% of your take income in case of incapacitation. A 25% savings rate, therefore, is a practical way to prepare for the worst.

Total permanent disability and life insurance will pay out if you are permanently unable to work, or die.

What if you were able to work but your child was severely unwell? Would you want to take some time out to support them?

Trauma insurance covers a list of illnesses and will pay out based on diagnosis, despite your ability to work. Unfortunately, if your diagnosis is not on the list you will recieve no payment.

A Pilot with a Side Hustle

Captain FI is a young pilot.  A fabulous and esteemed career, for which he has no doubt trained for many years.  I have no doubt the entry hurdles were extremely high, and of course the stakes, with hundreds of healthy travellers on board, even higher than medicine. 

Despite a well-paid and glamorous seeming career, this young pilot decided he would start a side hustle. He started the successful finance blog at Captain FI.  It is obvious from the site he has worked his butt off around shifts at work to produce copious great quality content, build a strong audience, and monetize his site. 

COVID struck, and the unthinkable happened.  Pilots were out of work.  Rather than get thrown into panic, the good captain took a deep breath and threw himself into taking his blog to the next level. 

Planes are taking off again, although the industry will take a long while to recover, work for pilots is yet again increasing.  Yet Captain FI has just quit his job.  He has had a series of unfortunate family health crises at an unfairly young age, and clearly feels he should be close to home to help out. 

Captain FI has been saving and investing hard, whilst keeping expenses low. 

He probably didn’t anticipate both his parents becoming seriously unwell and wanting to interrup his career to support them at such a young age. 

If he had a huge mortgage for his “Pilots house,” and a leased luxury car it is unlikely he would be able to.

Captain FI’s foresight, saving and investing have allowed flexibility and options in a difficult situation. Should the worst happen, will you be as prepared?

Change of Direction

It happens to many professionals.  They are singularly focussed on achieving a career outcome.  Like many great goals, the destination can be underwhelming. 

Even if you enjoy your chosen profession as much as you had anticipated, perhaps you will have different aspirations in 10 or 15 years time.  It’s hard to imagine in what way we will change as time goes on.  But it’s pretty much guaranteed you will have new passions and interests. 

Being financially independent gives you complete freedom to change careers, take a sabbatical, do that dream overseas fellowship or anything else the future you desires. 

Along the journey to financial independence, each level of savings and investments provides a buffer, and a little more confidence in taking risks and following dreams.

But Financial Independence Seems Impossible. 

All big, hairy, audacious goals seem out of reach. Just like achieving entry to the career of your dreams, big goals need breaking down into manageable steps.

Saving 50%+ of your income seems impossible, but is not. 

A lot of income is wasted without any real lifestyle benefit, particularly for high income households. 

Most households can cut spending by significant amounts with tiny cuts, that don’t seem worthwhile but really add up. 

Once you’ve embraced joining this community, your mind gradually opens up to opportunities to increase savings rate.

Keeping your cars and home relatively modest will allow a significantly higher savings rate.

Contributing most of your future pay rises to savings and investments will increase your savings rate without any impact on your current standard of living.

Financial Independence Seems Like a Lot of Sacrifice

For lower income households, saving 50% of income involves serious sacrifice, and smart manouvering. For high income households, it is much easier. Any income household will become financially independence in 17 years.

For those of us in no rush, the benefits of the journey towards financial independence start long before the 17 year mark. This assumes no current savings or super balance. A 65% savings rate will reach financial independence in 10.5 years. Increases in savings rate above this make increasingly small reducations in the time to financial independence.

Some in the community are extreme, and all about cutting out every non-essential spend to retire as soon as possible. 

I, and the majority of FI enthusiasts are a lot less extreme and believe in achieving balance.  The financial independence mindset is to maximise value and eliminate waste. 

Adopting this mindset, and picking up practical tips on how to achieve this by following FI literature and podcasts will gradually increase your savings rate.

Financial Independence is Great for Those Who Don’t Want to Retire Early

Most people will dismiss the idea of financial independence as impossible, too much sacrifice. They will continue wasting money that could provide better value used more efficiently.

The benefits of financial independence are not binary.  Having a financial plan documenting the steps you need to take to ensure you can retire at 60 is a lot further than many households.

Having a year worth of living expenses saved gives you a huge amount of flexibility for future health crises, or new aspirations. 

Aussie Doc Freedom is not a financial adviser and does need offer any advice.  Information on this website is purely a description of my experiences and learning.  Please check with your independent financial adviser or accountant before making any changes.

How to Choose Your Best ETF Portfolio

Are you ready to start investing in the stock market, but feel overwhelmed trying to find the best ETF portfolio? It’s easy to get stuck in analysis paralysis when looking at the number of investment choices available.

Time in the market is, by far the biggest predictor of return so it is important to get in promptly. Investing regularly ready, and staying invested for the long term are the next important factors.

Choosing a sensible portfolio is far more important than finding the best ETF.

The good news is that investing in the stock market is pretty simple, if you follow the evidence. Passive investing will outperform active strategies most of the time. It makes no sense to start investing with trying to stock pick when you can build a diversified passive portfolio pretty easily. Most will stick with this approach exclusively. Those that want to dabble in the world of active stock picking should build their passive portfolio first.

But even with a passive investing strategy, there is the challenge of designing an asset portfolio. Selecting the best ETFs to invest in is a time where beginners can gets stuck, and delay investing.

This article will step you through picking a reasonable asset allocation, and selecting your investment funds.

Are you Ready to Pick the Best ETF Portfolio?

This article is aimed at those who have an investment plan (even if basic) have saved an appropriate emergency fund for their situation. It is aimed at those for whom investing outside superannuation makes more sense than inside. To find out where you stand, check out the mega step by step guide to building wealth.

First you need to consider whether investing in the stock market is appropriate for your situation. Investors should have at least a basic emergency fund saved. They also need bare minimum of 5-7 years that they are happy to keep investments in the market.

Given the unpredictable volatility of the market, this is rarely the place to save your home deposit. Only invest money that, if you were to lose 50% of the value of your investment, you would be willing to wait out up to 5 years for the market to recovery.

I confess, I did invest savings intended for an investment property. It was a gamble, given I only had a two year time frame. Were the market to drop, I was willing to wait for it to recover and delay property purchase.

For me, this paid off, but could easily have delayed my real estate investment plan. If you want to buy a property (and don’t want to wait 5 years), be a little more patient and invest in a savings account, offset or term deposit.

To start with a traditional stock broker, you probably want at least $2000 to invest at a time. The brokerage cost of each investment is between $5 and $20 with an online broker (to sell and again to buy). As a result, it is worth building up savings and investing less regularly to save on costs.

Consider a Microinvestment App if You Don’t have $2000 to Invest

If $2000 seems far too much to save, or you really want to invest with every pay, consider starting with a microinvestment app.

Many of these charge no brokerage, but often charge a management fee as a percentage of your investment portfolio.

They are more cost effective for small and frequent investments. They also limit investment choices to a smaller selection, which helps beginner investors decide.

Once you know how much you want to invest at what regularity, compare the fee structures to work out which will be best for you.

Don’t be fooled into thinking it’s not worth it until you have $2000 to invest. Small amounts invested regularly can grow surprisingly quickly, so it is worth starting with whatever you have.

Once you have enough, you can graduate to a regular online broker. I started with a RAIZ account, before graduating to broker accounts with Commsec and Pearler.

Micro-investing is also helpful for learning and confidence building in investing. Whilst micro-investing, I experienced multiple market drops, hyped by the media to sound like the end of the world.

It was nerve racking, and I was tempted to withdraw my cash several times. Each time, the market recovered, and I grew more confident in ignoring the media hype and keeping my money invested.

Choosing an Asset Allocation

Asset allocation refers to the broad categories you invest in, in what proportions. The main categories of investments are

  • Shares
  • Real estate
  • Bonds
  • Cash and other fixed interest investments

Your asset allocation will be affected by your age and risk tolerance. There is no ideal asset allocation.

There are traditional rules of thumb for the proportion of stocks vs bonds, which may be a starting point.

100 minus age = % stocks

Often considered too conservative, now we are living longer. A new rule of thumb has been proposed

120 minus age = % stocks

Investors should write down an ideal target asset allocation to refer back to and invest to achieve. You can review your asset allocation, and should at pre-determined points, perhaps every 5 years.

Stock market losses require significant time and growth to recover. A 50% drop in the market, requires 100% growth to recover back to it’s former high.

The closer you are needing to withdraw money from your investments, the more punishing bear markets are, and the less risk investors are generally advised to take.

Asset allocation review should only occur when the investor is calm and the market steady. This should not be changed in the middle of a market crash.

Assessing Risk Tolerance

It is actually really hard to understand your risk tolerance without experiencing being invested. There is a fantastic explanation of risk in this article. There are online risk tolerance calculators that reflect what you believe your risk tolerance is, but not how you will react to a market crash.

The media whips into a complete frenzy, and every article, podcast and barbecue discussion tend to be dominated by the disaster, and how much worst is to come.

Media predictions, in the 14 years I have been observing, seem to be completely uncorrelated (perhaps even negatively correlated) to actual outcomes.

At all costs, you want to avoid panicking at the bottom of a bear market and selling. Many investors do this, and it is the worst possible outcome for your portfolio performance. If in doubt, assume you have a lower risk tolerance than you think, most people do.

Assessing Risk in Each Investment

Risk has to be assessed for each investment you consider purchasing. This should be considered before being seduced by suggested returns

With great risk comes great returns. But also with great risk comes complete financial devastation.

Aussie Doc Freedom

You want to optimise your returns for minimum risk.

Risk in investments is often portrayed in a graph as shown

Theoretical risk profile of investment classes

Shares are portrayed as highest risk, followed by property, then bonds and cash.

But there are Different Kinds of Risk

Volatility and risk of capital loss are often lumped in together as investment risk. The risk of losing your entire invested amount altogether, in my opinion, is very different from having to be able to tolerate short term volatility before recovery of a market.

Cash, considered the lowest risk actually has the largest risk of losing value relative to inflation. Inflation is the amount that a cost of goods and services increase annually. It varies with economic conditions, but invariably increases faster than the interest rate available on “high interest” savings accounts.

In real terms, cash allocations in your portfolio are losing value over time. This risk is known and predictable. Cash should be kept to cover short term needs and emergencies. It is not really an investment.

Property is generally purchased utilising leverage, which increases the risk of investment. This is likely to be higher risk than purchasing a broad based international passive index ETF. Purchasing individual shares exposes the investor to the risks of that underlying company, likely more risk than the property investment.

In summary, risk is not as simple as the graph above implies. Risk needs to be considered based on individual investments. Consider the risk of capital loss initially, and separately from volatility.

Buying the wrong asset, be it with property or shares (or even “junk bonds”) is associated with significant risk or capital loss. Minimise this risk ruthlessly. Extra risk should only be taken on if fully understood, Greater risk must be rewarded with greater return.

Detailed Asset Allocation

Within the main categories described above, there are subcategories you will also need to decide upon

Stocks

  • Australian stocks
  • International stocks
  • Other eg commodities, gold etc

Bonds

  • Government bonds
  • Corporate bonds

Real Estate

  • Australian residential physical or REIT
  • Australian commercial physical or REIT
  • International physical or REIT

Cash and fixed interest

  • Term deposits
  • Cash

Diversification

I think most readers will have an understanding of diversification.

Don’t put all your eggs in one basket is a well known phrase, and easy to understand.

If you have researched, and believe Australian Real estate is the best way to build wealth over the long-term, it is still wise to have other investments. No-one can predict the future. Unimaginable events could lead to Australian real estate losing significant value and never recovering.

This would be a disaster if you have invested in Australian real estate as I have, but less of a disaster if you at least have other investments.

Owning investments in all major classes and purchasing broad passive ETFs achieves a good degree of diversification quickly. Of note, the Australian stock market is tiny, and heavily concentrated in the top 10 stocks. Investments in only Australian ETFs is not diversified.

Correlation

Correlation refers to the amount investment returns tend to move with each other. The Australian stock market tends to follow the US. Consequently, the two are positively correlated. Choosing assets with low correlation means your overall portfolio is more protected against major losses.

Going back to our example above, international stocks have a low correlation with Australian real estate. I have chosen to increase my exposure to international stocks to compensate for my over exposure to Australian property.

Here is a table of historical correlation.

Superannuation Asset Allocation

Don’t look at your portfolio outside superannuation in isolation. Particularly if your superannuation balance is already significant.

If you are happy for your super fund to continue managing your investments, check your investment options.

What is your asset allocation inside super? Does it suit your risk tolerance, age and preferences? Do you need to change this?

Are you fairly happy with your superannuation portfolio, but would prefer to tweak the asset allocation?

Tweaking your Portfolio

Taking control of your superannuation often involves a significant increase in fees. An easy work around is to use your investments outside superannuation to move your overall asset allocation towards your ideal scenario.

For this reason, my asset allocation outside superannuation is simple. I wanted to invest in physical residential real estate, using leverage to produce equity over the years. I would also like a slightly higher stock vs bond/fixed interest allocation than my super fund allows.

As a result of my two investment properties, I am over exposed to Australian risk. I have chosen to increase my exposure to international equities, which have a low correlation with Australian property.

Stocks

Australian vs International

Within the shares allocation, you need to decide an allocation to Australian shares vs international. Australian investors traditionally love domestic equities due to franking credits, not available on dividends from overseas.

The Australian ASX only represents around 2% of the global market. Most investors down under will be excessively concentrated in Australian shares.

The Australian share market is also dominated by just a handful of companies, making even the ASX 300 relatively concentrated. The ideal percentage of international equities is under debate. Passive Investing Australia has some useful guidance. Read the article, pick a number and move on.

Hedged vs unhedged

With your international equities, will you pay extra to “Hedge” currency risk? If the Australian dollar is strong when you want to withdraw, you will benefit from the investments being hedged. If the Aussie dollar is weak, you would have been better off unhedged.

Unfortunately there is no way to tell the future of how the Australian dollar will fare. If you plan to retire outside Australia, there is little sense in paying to hedge to a currency you may not even be using. If you plan to retire within Australia, it probably depends on the state of the Aussie dollar at time of investment, and personal preference.

Read more here. Again, choose hedged or unhedged or 50:50 and move on.

Passive vs Active

Passive investing has become incredibly popular over recent years. It’s simple, low cost and anyone can do it. Amazingly, passive investing appears to have beaten laborious and expensive investment management most of the time.

It’s easy for beginners to assume beating the index should be easy. Evidence tells us it’s very hard, even for full time professional investors. I doubt anyone would argue that a passive strategy is at least a good way to start an investment portfolio.

Not all ETFs are passive, or broad index funds. Listed investment companies (LICs) are Australian actively managed funds, but at comparably low fees. Check out the article on ETFs vs LICs if you want to read more about the differences.

Capital Growth vs Income

All investments can be categorized as capital gain, income focussed, or mixed. Early in your investing journey, a capital gains focus is more efficient because it isn’t taxed.

Eventually you will need your investments to produce an income. With the stock market this is easy, withdrawing your investments is essentially the same as allowing a dividend to be paid out.

With property, investors often end up “asset rich, cash poor” unless they pivot to income investments once they have accumulated enough equity.

Many investors like dividend investing. I feel this is better suited to low income earners (they benefit far more from Franking credits). I like the approach of efficiently building equity using capital growth before pivoting more into stocks that can be easily withdrawn as income.

Past Performance in Choosing the Best ETF

Past performance should largely be ignored when comparing ETFs or super funds. Chasing last year’s top performer has been found to be a great predictor of poor performance the next year. Past performance does not predict future performance. Repeat ad infinatum. Seriously! Ignore it when choosing the best ETF.

Fees in Choosing the Best ETF

Fees are the only predictable part of performance. Given two similar ETFs you are torn between, the lower cost fund is likely to perform better.

ETF fees are commonly 0.2-0.4%. If you are paying more than 0.4% there should be a very good reason for this.

Choosing the Best ETF Portfolio

Find Three ETFs that suit your requirements.

Make a shopping list such as:

  • Broad passive Australian index fund ETF
  • Broad passive international hedged index fund ETF
  • Australian government bond ETF

Check out these three websites and list best ETF that match your list:

Vanguard

Ishares

Ignore anything “synthetic” or “derivative”. You are looking for passive funds that track a broad index. Choose the lowest cost ETF. Read the product disclosure statement to check for small print.

The size of the ETF becomes relevant if the liquidity may be an issue – small ETFs without many investors could be difficult to offload when you want to sell. This shouldn’t be an issue with broad ETFs with the major providers.

“Tactical tilts” using narrow ETFs aimed at one industry (eg tech) should only be considered by experienced investors after significant research. Keep it simple to begin with, you can always add more complexity later.

 

Physical Real Estate will Screw Up Your Asset Allocation

Do you want to include real estate investing? Whether physical investment properties, or real estate investment trusts (REITs), the ideal percentage of your final portfolio should be considered.

Physical real estate appeals to me, because the data tells me it has a low correlation with the stock market. If there is another 50% + drop in the stock market after I retire, I do not expect rental income to immediately drop. It may decrease eventually, but it weakens my reliance on stock market returns for income.

REITs seem an ideal way to invest in real estate, except the listed ones are highly correlated with the stock market.

Physical real estate screws up your portfolio asset allocation completely. As such a lumpy asset, spending $500,000+ on a single property will make investors overweight on property in their portfolio.

Asset Allocation with Property Investments

My approach to this, is to design my ideal portfolio prior to retirement, and purchase real estate towards that goal.

It is then easier to remove the real estate from the asset allocation. Out of the rest, I work out the proportions of stocks, bonds and other asset allocations.

Find a StockBroker

You will need to choose a stock broker in order to buy your 1st investment. Check out the stock broker article.

Rebalancing

To maintain your asset allocation, investors are often advised to regularly rebalance. Find out how to perform portfolio rebalancing.

Keeping your investments close to the target asset allocation, means you are forced to buy the assets that are doing poorly and sell (or not buy) those that are performing well.

This is in opposition to human nature, which is out to make sure we underperform, by encouraging to buy when the price is up, and sell when assets are on sale.

If you can purchase (instead of selling) investments to maintain asset allocation, you will save on brokerage. But at times of major market movement you may need to sell.

Choosing the Best ETF and Asset Allocation

Which ETFs did you choose? Comment below and let us know why you made the choice you did.

Aussie Doc Freedom is not a financial adviser and does need offer any advice.  Information on this website is purely a description of my experiences and learning.  Please check with your independent financial adviser or accountant before making any changes.

How to Prevent and Recover from Burn Out.

Some prefer gossip to Yoga

“Internation Classification of disease” (ICD) is the international standard for reporting health conditions used by physicians and researchers.

The ICD-11 defines burn-out as:

“Burn-out is a syndrome conceptualized as resulting from chronic workplace stress that has not been successfully managed. It is characterized by three dimensions:

  • Feelings of energy depletion or exhaustion;
  • Increased mental distance from one’s job, or feelings of negativism or cynicism related to one’s job; and
  • Reduced professional efficacy.

Burn-out refers specifically to phenomena in the occupational context and should not be applied to describe experiences in other areas of life.”

Burn out can occur in any occupation, but it is particularly common in medical and nursing careers, police, teachers and lawyers. As a result, all these professionals will suffer personally and perform less well professionally.

Burn Out Symptoms

Burn out is often portrayed as something you are or are not. It is largely suggested preventable by “wellness” interventions. Medical and nursing professionals often feel “wellness” rammed down their throats by hospital administrators. If you are burned out, it is implied. you have been neglecting the yoga and self care, and it is all your fault.

But in reality, health systems (and many other professions) and complex and flawed. They often place unreasonable and incessant demands on staff.

These demands, and and our own values, or the needs of our clients (and patients) are often in direct conflict. Failing to meet any of these opposing demands results can result in disciplinary action, poor patient outcome and a lot of guilt.

Trying to make even small improvements in such a large and complex organisation feels like trying to turn around the Titanic. This constant pressure, the high stakes nature of the work, all mean burn out is inevitable.

Burn Out in Health Care

I look around my senior colleagues, and they are all, at times, burned out. I’m no exception. What changes is the degree of burn out. On returning from a relaxing holiday, staff are kinder, happier and more resilient to work place stress.

At times of sustained excessive demands, staff spiral into cynicism, exhaustion and inefficiency. If this continues, a sense of control is lost, and replaced with apathy.

Other symptoms can include difficulty focusing, worsened relationships at home and unexplained pain syndromes and health complaints.

Burn out can lead to insomnia, depression and even alcohol and drug abuse. If your dream job has become a nightmare, it may be time to pivot.

How Burned Out Are You? The Maslach Burnout Inventory

The Maslach burnout inventory is used to study burn out. It has validated versions for health care professionals, educators, students and general.

The inventory looks at three major factors to assess burn out

  • Emotional exhaustion
  • Depersonalization
  • Personal Accomplishment

What’s really helpful, is being able to identify the area you score worst on. For me, this was having a low sense of personal accomplishment, and to a lesser extend depersonalization.

There is a simplified version of the inventory set out as a quiz here.

How to Prevent and/or Treat Burn Out

I actually don’t think it is possible to prevent burn out in the kinds of work environments that so expertly create it.

Burn out can be delayed, monitored and reduced. The first step, is like many issues, to be aware.

Watch out for signs from yourself. Dreading going to work multiple days in a row in a career you normally love is a good sign. Insomnia and cynicism are others.

Watch out for your colleagues too. If someone makes an off colour comment or is irritable with a junior colleague? Call it out. Check they are OK. Some gentle prompting to self reflect is likely all that is needed.

Identify the Specific Cause of Burn out in your Case

Work load: Is this excessive? Is this controllable. In the ED, work is routinely unpredictable, and frequently overloads resources available. Like buses, there may be no patients for an hour then ten in ten minutes.

Autonomy: How much control and freedom do you have over your work? This is an important factor in reducing employee stress, improving learning and productivity.

Communication within the team: Is the team dynamic working? Do they communicate well, or is there a lot of infighting? Toxic work environments can be hard to turn around, but social events can help humanize colleagues to each other.

Recognition of work: Do you feel when you work especially hard, you receive recognition for this? This is pretty easy to improve in a work place, starting with a simple thank you face to face or by email for a job particularly well done. I have experienced being on the giving and recieving end of recognition, and find it’s impact remarkable.

Discrimination: Is the work place fair? Is there discrimination going on?

Are you and your employers values aligned? If you believe in the ultimate cause your employer is working for, you will gain a sense of personal achievement from work. Being forced to act against your core values by your employer has been termed Moral injury.

How to Prevent and Treat Burn Out

Basic Healthy Living Routines

Sleep, eat well and exercise. We all know we should be prioriziting these. These three factors have an immeasurable effect on your physical and mental health as well as preventing or reducing burn out.

A havey work schedule can negatively affect your sleep, diet and exercise schedule. Make sure you prioritize eating, sleeping and exercise in your down time. Set boundaries on work so that it doesn’t encroach regularly into your time off. Saying no to extra shifts is OK if you need the down time.

Nurture Relationships

A good support network outside work, to help you rest and have fun outside work is essential. Nurture your marriage, friendship and family relations and don’t neglect them for the sake of work.

Make Sure You Have Enough Down time

Relaxation time between work is a major factor in preventing, or suppressing burn out. How many hours you work before you end up feeling burned out depends on issues in your work place, your own emotional response to them, other demands on you and how long it takes you to recuperate. This will probably change over time.

Financial Planning for Burn Out

And here is where the finance bit comes in. Financial stress can reduce your ability to cope with work dramas, and cut down your choices in terms of changing employers, careers, or work schedule.

Part time work is only available to those who have control over their finances. Those that have commited huge chunks of each pay cheque to enormous mortgage and car loan payments often lock themselves into full time work.

Provide yourself with options by not over committing. You may not feel you will ever suffer burn out in your optimistic and energetic first year at work. Things change. You change. Leave yourself options.

If burn out kicks in pretty badly, you may want to take a break from work altogether. Again, money will be the limiting factor of whether this is possible.

A burn out fund is beyond an emergency fund. An emergency fund will cover a car repair, or your investment loan repayments if your property is untenanted for a while. A burn out fund is what the FI crowd call “FU money”. If you need some time off for any reason, you have money saved up that you can use. If you want to change jobs, it takes away the stress of not knowing the impact of a change in pay.

Spend Your Down Time Doing What You Enjoy

There is nothing less relaxing than the Downward dog if you can’t stand yoga (especially with chanting!) It’s a great way to stretch and improve mobility, but if you don’t enjoy it, you won’t do it.


Don’t feel guilty to enjoying the hobbies that suit you. That may be running marathons or playing in a heavy metal band. Whatever makes you feel like the best version of you is the right activity.

Watch Your Alcohol and Drug Intake

Substance abuse is often insidious in onset. Two glasses turns into a bottle turns into two bottles over time. Professionals are not immune. They just tend to hide it for longer.

The most up to date Australian guidelines recommend up to 10 standard drinks per week, no more than four in a day for men and women. A standard drink of 13% wine is just 100ml.

Improve Your Work Situation

What is contributing to your burnout? What do you enjoy at work? How can you tip the balance of your time more towards what you enjoy.

When I am feeling burned out I stop taking on extra shifts, and try to get away from managing staff for a while to actually chat to a patient, and practice some medicine (what a treat!). I find it helps to unravel the dehumanization.

Ironically, I found that taking on shifts elsewhere often helps to reignite my passion for medicine. Being able to work in a new department for a few shifts helps. Although each department has issues, I’m usually not around long enough for them to start frustrating me. Also, I can choose departments where I get to do more of the work I enjoy (and less meetings).

Can you improve your autonomy? Is it worthwhile chatting to your employer to see if they can provide any flexiblity either in the work you do, or your schedule.

A large reason I started this blog was due to my lack of autonomy at work. Many times, I am a cog in a giant machine, constantly shuffling beds to squeeze more patients in. There are endless key performance indicators to hit, and plenty of criticism when they are missed. Key performance indicators don’t necessarily relate to patient experiences. They are factors that are easy to measure, and often result in meaningless actions.

Options to Improve Your Work Situation

  • Reducing work hours
  • Taking a break
  • Doing a different type of work, or in a different workplace
  • Tilt your time at work towards tasks you enjoy / find rewarding
  • Improving work schedule or flexibility
  • Consider asking for more autonomy over the work you do

I hope you have found this article on burn out useful. The solution is not all financial, but good control over your finances gives you more tools.

Aussie Doc Freedom is not a financial adviser and does need offer any advice.  Information on this website is purely a description of my experiences and learning.  Please check with your independent financial adviser or accountant before making any changes.

How To Avoid Getting Carried Away With Property FOMO

Would you like to purchase the property of your dreams, without getting carried away with FOMO, paying too much or buying the wrong home? Learn factors contributing to FOMO, and how to protect yourself.

A National Property Boom

Unless you have been living under a rock for the past 2 months, you will have noticed the “Property boom” constantly being announced in the media. Unusually, prices have been going up almost everywhere in Australia, rather than in 1-3 cities as in recent booms.

A year ago, there was terrible doom and gloom, with house prices about to take a dramatic tumble, wiping out household wealth nationwide.

A core logic article days ago confirmed the final drop in Sydney’s home value index of 3% before the turn around.

Now the media are telling us that house prices are booming, with national prices tipped to increase by 9% in 2021. Months ago, CBA said prices could fall by 30%. These predictions, in my opinion, should be taken with a spoon bucket load of salt. [Don’t actually consume that amount of salt, we all eat too much].

Auction clearance rates (ACR) indicates the percentage of properties auctioned that were successfully sold. It is a commonly used property data point used to indicate the condition of the property market.

Clearance rates of over 80% indicate a high demand / hot market. It means you are more likely to miss out to other buyers when trying to purchase your property.

Every state / territory (no data for Tasmania) had an ACF of 80% or more this week, with ACT at 97%.

Data from Realestate.com.au

Reasons for the Property Boom

As we are now aware, the COVID-19 shutdowns have disproportionally affected young people, especially those working in hospitality.

For many other households, COVID-19 has had an unexpected side effect – increased savings. Essential services workers may have found themselves increasingly asked to work more. During shutdowns there was very little to spend money on, as we weren’t going out to eat, drink and socialise.

Beyond the lockdowns, booking a flight is still a dicey prospect, with the risk of borders shutting. If Australian’s have holidayed in the last 12 months, it has been domestic, far closer to home than usual and consequently cheaper.

Those struggling to save for a home deposit have a silver lining from this terrible pandemic – a boost to their savings. Many are now trying to get into the market. A similar surge is being seen in 1st time stock market investors.

Add to that the government incentives of the first home owners grants, first home loan deposit schemes and home builder grants and stamp duty discounts, home buyers are scrambling to take advantage of the assistance.

New home loan commitments are at 10 year highs.

It’s a Partly Artificial Boom

What tends to happen when government incentives increase, is that benefits are quickly swallowed up by a matching increase in prices. House and land packages in my area, I noticed way back when I was looking to buy a first home, immediately increased prices to completely consume an increase in first home owners grant.

All these incentives, grants and discounts are being factored in by buyers, who can now afford a little more than they could 3 months ago. They can bid that bid higher, as can you.

Government incentives, pent up demand from would-be buyers last year who delayed purchasing, and record low interest rates should all increase prices.

Potential sellers have also been sitting out, waiting for the doom and gloom to pass. A low number of properties being listed for sale has contributed to competition and consequent price rises.

Once these sellers are encouraged enough by the property boom media coverage, more properties will come to market. With more choice, competition will be less fierce and price rises may not continue as steeply as predicted.

Property FOMO in a Boom

The effect is a lot of FOMO – Fear of missing out, fuelled by sky high auction clearance rate, prices and media hype.

Wannabe property purchasers are frustrated by bidding for and missing out on property after property. First home buyers, especially, are itching to finally get into their own home.

Media reports of purchasers buying properties in lifestyle locations unseen during lockdown suggests some pretty impulsive decision making based on a short-term situation.

Purchasers are putting offers in without buildings and pest inspections to try and gain an upper hand in the bidding war. A buildings and pest inspection does not eliminate the risk of investing, but reduces it, and in my opinion is foolish to go without.

Risks of getting carried away with FOMO in a hot property market include:

  • Paying a silly price > 110% of true value, only to find property prices cool once more properties are listed for sale
  • Buying a property you later regret, just desperate to buy, longer term goals get forgotten.
  • Buying without a building and pest report and then finding a MAJOR structural issue that will cost $10,000+ to remedy
  • Overstretching financially so mortgage payments cause financial stress

How to Resist Property FOMO

1. Work out your Goals and Priorities

What would you like to buy? Where is the property? A house or apartment? How many bedrooms? What features (e.g. off street parking). Start with the ideal purchase, although unfortunately pretty much no-one can afford their ideal home.

Then work out your priorities. Is this your forever home? Or do you need it to grow in value in order to trade up in a few times? Are you rentvesting, or utilizing other advanced strategies. In the case of just getting on the ladder, this should be a decision heavily influenced by growth potential and be looked at as mostly a financial decision.

Are you happy to move out a suburb or two in order to get the extra bedroom? Buy a “do-er upper” that you can live in and renovate as you save more cash?

Write down your goals and priorities to refer back to prior to offering on a property.

If your goals turn out to be unrealistic, you will need to revisit. But make sure you do this whilst consciously reprioritizing, not just buying any property you can. Property purchasing is an expensive business. Holding a property for a short period of time is often worse financially than renting.

2. Stop Comparing

“Comparison is the thief of joy”

Theodore Roosevelt

It is completely irrelevant what your friend, sister or colleague has just bought, and how it compares to your purchase. Mind your own business! Stop worrying about what everybody else is doing and focus on your own goals and priorities

3. Don’t be seduced by government grants

Again, these are largely factored into prices. Don’t buy or build because there is an incentive. Saving a few thousand dollars now can end up losing you hundreds of thousands dollars over the long-term.

Any incentives should be cherries on the cake if they are available, and certainly not influence your decision making. The government is offering these to stimulate the economy as a whole, not because it is in your best interest.

3.  Know How Much the Property is Worth

This is getting hard, in a fast moving market. But when you have found a property you like, you need to work out how much you will pay for it.

Automated valuation tools you can find online are notoriously inaccurate at the best of times, and next to useless in a hot market.

Price guides and for sale prices can be completely unrelated to final sale prices as buyers are bidding well over asking price / reserve.

The “sold” section of Realestate.com.au is a good place to start. You really need a number of comparable properties that have sold in recent weeks to get an idea. Land size and number of bedrooms are easy data to use in comparisons. But there are other factors that are more tricky, such as position on street, natural light and finish quality.

A buyers agent can offer value here. In a slower market, a buyers agent offers access to “off market deals” before they are even advertised for sale. Real estate agents are having no difficulty selling property right now, so have no incentive to offer buyers agents off market deals. The more competition they create, the better for the agents final commission.

But a buyers agent should have plenty of experience in the area you are buying, and help guide you on limiting offers to reasonable prices. They are also expert negotiators, often able to identify the sellers priorities, and making you as attractive purchaser as possible.

4. Make Yourself an Attractive Buyer

There is no point in offering on property at the moment (arguably ever) without a loan pre-approval in place. Find your lender and get this organised 1st. Get pre-approval for more than you think you will buy for, to allow some flexibility.

There are factors other than price that will influence a seller’s decision on who to seel to, particularly in a non-auction situation. A settlement period that is short (if they are in a hurry) or long (if they haven’t found their new home yet) may be preferred.

A “No chain” buyer, ie first home buyer, who isn’t reliant on their own property settling as planned will often be more attractive.

An option to rent the home back to the seller for a few months while they continue looking for their forever home may be appealing.

Having the buildings and pest inspection scheduled immediately, so the offer can go unconditional quickly may appeal to the buyer.

5. Maintain Perspective

No matter if you have lost out on 1, 2, or 3 properties, this property is not the last chance. The market may cool better properties may come onto the market. Yes, property prices may continue to rise, but not by a massive amount each month. There is no point in buying the wrong property. Take your time if you need to and get it right.

6. Be Decisive

Once you have found a property that meets your goals and priorities, you have worked out a value and you have a pre-approval, it’s time to make an offer. Be decisive, there is no time for dilly dallying.

7. Don’t Get into Financial Stress

Ensure you can really afford repayments on the amount you are going to offer on a home. I’m not just talking about the bank approving you. Buyers need to take responsibility for loan commitments.

There are rules of thumb such as not dedicating more than 30% of household income to mortgage repayments. A far better technique is to form an accurate budget or track spending and work out how much you can borrow based on the repayment you can afford.

Remember to calculate mortgage payments presuming interest rates are at least 2% higher. If using a fixed rate mortgage, will you be able to afford repayments if interest rates jump once your fixed rate ends?

Don’t spend all your savings, allow some to be kept as a buffer in case maintenance issues arise. What if the water heater dies a week after moving in?

Good luck with your property search. Keep a cool head and stick to these rules to pay reasonable prices and buying property successfully in a hot market. Read about the Victorian residential tenancy act changes.

Are you trying to buy a property at the moment? Comment below to describe your experiences, and share any tips you have picked up.

Aussie Doc Freedom is not a financial adviser and does need offer any advise.  Information on this website is purely a description of my experiences and learning.  Please check with your independent financial adviser or accountant before making any changes.