The Government Just Created Australia's Next Tax Advantage

The Government Just Created Australia’s Next Tax Advantage

For decades, Australian investors followed the same playbook:

Buy property.
Negative gear it.
Wait.

But as tax benefits for established investment properties are wound back, a new opportunity is emerging, and most people haven't noticed it yet.

In this episode of Good Bad Business, Peter, Rod and Stephen unpack why high-income Australians may begin shifting from leveraged property into leveraged shares, ETFs, debt recycling strategies, and investment lending structures.

We explore:

• Why the biggest tax deduction in Australia may be changing direction
• How debt recycling is becoming a mainstream wealth strategy
• Why leveraged shares could become the new negative gearing
• The opportunities and dangers of borrowing to invest
• And who stands to win as billions of investment dollars search for a new home

This isn't a property episode.

It's an episode about incentives.

Because when governments change the rules...

Money moves.

The question is whether investors will find the next opportunity, or simply create a new pickle.

Listen now and discover why Australia's next wealth-building trend may already be underway. 🥒🎙️

If you’re thinking about buying a business,
 listen first.

If there’s a business you want us to break down,
 send it in.

And if you got value from this, share it with someone before they sign something they shouldn’t.

Because we don’t want you to get into a pickle.

Transcript

SPEAKER_00 0:09

Welcome to the Good Bad Business. In this episode, we're going to be talking about why high earners may ditch properties for share. Ladies and gentlemen, we found a bit of a loophole and we want to tell you about it. So I'm really looking forward to this particular episode. Today I'm actually joined by a couple of special guests. It's going to be a little bit different than what we normally do. Fortunately, Fabs is off for some personal things he's got to deal with. He's got a little bit of time off. So we wish him all the very best and safe wealth and health, as we always say. Isn't that right, Rod?

SPEAKER_02 0:43

Absolutely.

SPEAKER_00 0:44

All the best fabs. Yeah, for sure. And then Rod, I'm actually glad that you're on this podcast. So finally, some experience. We've also even got more experience. We've got Stephen Pollard with us as well. And Rod, I just want to quickly just say good day first and foremost. And to introduce you to the audience, Rob is the Rod. Rod is the director of Eventum Optium and also Naked Accounting. So Rod, welcome, mate.

SPEAKER_02 1:09

Thank you very much, Peter. Yeah, it's uh it's nice to come on board. And uh you can call me by Rod whenever you want, if you like.

SPEAKER_00 1:15

I've called your worst things in the past, mate. So that's that's lovely. And we've also got Stephen Pollard with us from Oasis Financial. And Stephen, welcome, mate. We're glad to even get more experience on this podcast today as a financial advisor and director of Oasis Financial. So welcome, Steve.

SPEAKER_01 1:33

Thanks, Peter. Thanks, Rod. I'm looking forward to it. And hopefully it'll be very educational for all listening.

SPEAKER_00 1:38

It's one of those topics where I wanted to try and stay away from the budget. And I think we, I think we all did. There was a lot of advisors and a lot of armchair specialists that jumped on the bandwagon talking about budget. So me personally, I wanted to stay away from it. But if there's something that is going to reflect our customers in a positive light, and whether it's, I suppose, a bit of a loophole, I would say, that's going to benefit customers moving forward. But you know, we've all been talking about negative gearing and how, you know, negative gearing is certainly unavailable from what it's saying, but it's not the case with shares and investments. So that is very much the topic of today, why high-income earners may ditch properties for shares. Now, Rod, I know with our experience and with what we do with our customers, and we've done this for some time now, commercial debt recycling has definitely been a big, big topic for our customers over the last couple of years. Because, I mean, at the end of the day, look, we're in the insolvency space, and in most instances, we're extracting equity from a director's home and we're using that to pay out legacy debts. And if there are some working capital that remains, ultimately they can use those funds as working capital. And post-restructure, if they were to receive a profit and pay tax on that profit and they receive a dividend, well, then obviously they can recycle those funds back into the home and pay that down a little bit faster. And, you know, that's always been sort of our strategy over the last sort of couple of years. But I'm assuming that's going to change a little bit. You know, if there's a bit of working capital left over, why not put a little bit of money in shares? Because it seems as if there's a negative gearing opportunity there. Do you want to quickly touch on that before we get onto the podcast?

SPEAKER_02 3:26

Yeah, look, good point. I mean, we deal at both ends of the spectrum, Peter, as you know. And the equity that one works so hard to build up in their property, often it sits there unutilized and it's a latent asset which we can take advantage of. And unfortunately, a lot of that time we are uh accessing that equity to deal with positions such as DPNs or ATO debt or other things. And I think you're right, with the exit strategy, it's about regrowing the business without those legacy issues. But there's always uh the passive investments or the investments uh without personal exertion. And up until recently, I mean, we are a property-centric uh country without a doubt about it. The existing properties, unfortunately, have got the best locations, you know, the people building the best areas first before they go wider. And I think the government's pushing people in the property space to outer areas, which you know are a lot riskier, a lot smaller, aren't as desirable. So new properties will become the hottest property in the market. They'll be followed by investors, high net worth individuals, as well as first home buyers. So grief, unfortunately, happening there. And I think the liquidity which shares offer, I think the easy access to shares hasn't been as understood as before. And I think in this budget, negative gearing and capital gains have been intertwined. And I think the negative gearing, if you just shelve negative gearing out by itself, I mean, people are now saying, well, I've got to buy a small new property in a location. That's not the case. Shares, they're liquid, they offer good yields. Obviously, as property prices have increased dramatically, the yield on property has decreased significantly. So the yield on property, blue chip properties, uh yield properties is quite high. And I feel that with moderate growth, the uh the returns, rather than sitting on equity and doing nothing, the returns, it's definitely gonna be an area which uh it's gonna be focused upon. I'd be very, very surprised not to see this as a growth area. And I did read an article uh recently that the number of people going into investment properties now, sorry, into negative geared share portfolios has increased significantly. That's only gonna get more and more as people become aware of what their obligations are. Yeah, our phones have blown up, Peter, uh post-budget between trusts and now obviously of negative gearing. So this is also the younger people, which the budget was meant to aim for, they can afford to buy a partial share portfolio, but can they get the deposit together for a significant equity? So I think shares in in general are gonna be a more desirable asset class.

SPEAKER_00 5:46

That's why a lot of the young kids were upset because I mean, one of the paths of wealth creation is through shares because properties are so expensive to be able to get the younger generation to be able to compound and accumulate that wealth, which some of the older folks have been able to do in respect to that negative gearing component. Uh, Steve, before we get into the podcast, we haven't even started, we've already gone off on the tangents. Welcome to Good Bad Business Podcast, ladies and gentlemen. If you're new to this, is what we always do. If you're a regular listener, you know we go off on some significant tangents. But I suppose from our perspective, I mean, we're converting a non-deductible home loan debt into a tax-deductible business debt. And if they're extracting equity and it's going into a company and they're using that to be able to invest into shares, is that something that you're seeing more of? It seems as if there's going to be a lot more sophisticated company structures to be able to really try and take advantage of potential advantages in regards to negative gearing when it comes to shares. What's your thoughts on it, Steve?

SPEAKER_01 6:50

I think there's two things there. They're going to have their work cut out for them with the structures that needs to be rethought and will come to light over time, as the experts uh put their heads together for those things. And once people know what structures to be used to hold investment, both for negative gearing, for tax now and in the future, then we can start talking about the beauty and what to invest in. There is so much opportunity, as you've said, with shares, with gearing, using that lazy equity in your home, which I think a lot of Australians are very cautious with shares and apprehensive. But now that the spotlight's off property and onto shares is probably the leading way to create wealth outside of owning and running a business, people are going to want to get educated and want to know what to do. And that's where your accountant and your financial advisor needs to be up to speed with this. And it will take some time to get the new structures figured out, but the investments are there ready. And it's going to be about really making sure you're getting the right investments. Whereas before it was be diversified and go long term, whereas now there's going to be a real switch between growth-focused and income-producing, franking credits, all the rest. So all that needs to be factored in and tailored to the business, to the structures you've got, to your tax situation, to the longevity you've got, the time frames you've got as well.

SPEAKER_00 8:16

Yeah, absolutely. And I think the operative word there is your lazy equity. There's no point in having sitting there and doing nothing. You may as well convert it and get it working for you. And I suppose, Rod, in our space, it's converting that lazy equity, be able to pay out some of that legacy debts. And if there's anything left over, reinvesting that or investing that into shares, I should say, was definitely going to be beneficial for a lot of our customers, which essentially becomes a part of that overall sort of holistic turnaround strategy.

SPEAKER_02 8:41

Absolutely agree. In this little conversation, I think probably we identified sort of three areas here. The first one's about the appropriate structures, and that's something with the rollover divisions and we're still coming to terms with the appropriate structure. It's about receiving the appropriate advice. And as Steve mentioned, between yield and growth stocks now will probably stand out, especially with the tax benefits that will come. And then obviously having the right financial in place to be able to access that equity and be able to, you know, turn, as you say, to non-deductible debt into deductible. So rather than be lazy, yeah, grow and and and shares in property, as Steve said, I mean the biggest uh asset classes here. And I guess there's probably an underlying thing that only the wealthy buy shares, but that's not the case. The mediums these days a lot more. If you feel uncomfortable, reach out to Steve and financial planners to get that advice and take advantage of opportunities that are there.

SPEAKER_00 9:27

Because if you're running a business, and I think we just need to touch on that point just before we before we've been trying to get into it for the past 10 minutes now, but we're all ladies, we're about to we're about to get into the podcast. But there's one point that I wanted to make before we get into it. That if you're running a business and the company is the borrower and you've been able to extract equity, let's call it $100,000, and you've put that into your company, the interest in what you pay on that $100,000 is tax deductible. So it's reducing your overall net obligations. Would I be right in saying that, Steve and Rod? I'll start with you first, Steve.

SPEAKER_01 10:05

Yes. I mean, Rod obviously from the accounting side will have a bit to say about that. So I might actually just hand it over to him.

SPEAKER_02 10:13

Peter and I, we work on a number of clients of this nature all the time to help them deal with business issues. Absolutely deductible. And we can structure both business and personal deductibility here for overall return. And what's the old saying? It's not what you earn, it's what you take home. We can structure it full deductibility, uh, Peter. So 100% correct, mate.

SPEAKER_00 10:31

If there's caveats that are registered against your title, you've got that removed first and foremost. So you've rebalanced your property title. You might have some available equity remaining that you can sort of convert that lazy equity as Steve mentioned before and utilize that into the actual uh share market or within a portfolio. And to me, that becomes a really good sort of turnaround strategy for a lot of companies that are in distress. But more importantly, your mum and dad business owners that want to double into that component where they can utilize negative gearing to their advantage. So, all right, enough of that. Great intro, thank you, gentlemen. The tax deduction didn't die, it actually moved. Now, for decades, Australia taught high earners one thing: buy property, borrow heavy, negatively gear it, and then sit and wait and wait and wait. A lot of waiting with this bad boy. This was the wealth formula. Then Canberra changed the rules. From July 2027, negative gearing on future residential property gets limited to new builds. But here's the part that almost nobody is actually talking about. The deductions actually didn't disappear, they actually moved because shares, ETFs, leverage investment loans still sit under the existing rules, and that actually changes behavior, which is what we just touched on within our opening. And it's really the the changes of behavior, it's going to move pretty fast from my perspective. It's all about psychology. And if you're a high income earner and earn a strong wage or paying huge tax, and you're sitting on the home equity, as mentioned before, the old sort of lazy equity that a lot of people have been able to accumulate over the years, you're actually losing property deductions, ladies and gentlemen. And so, where do you go next? And so that's the real story. It's not property versus shares, this is a tax strategy meeting the leverage and meeting investor psychology. And there's billions of dollars attached to it. And so that's why we've got the special guest on here today to be able to do a bit of a deep dive into that conversation. But the real shift is why is this bigger than actual property? Because, as mentioned a moment ago, the mind shift and the behavior has actually changed. So let's zoom out. This isn't really about a property episode. I mean, this is more of an incentive episode. Treasures and Treasury owns data. We've looked into that, so we wanted to make sure that we just sort of get a really holistic understanding of where things are at. 25.1 billion in rental and interest deductions, but there's 78% of rental deductions that benefit and flowed to the above medium income earners, and that's actually quite interesting, that point. But 37% had flowed to the top income desile. And a quick sidebar that actually means that the people that are most affected by the changes are the exact people that most capable that are actually are able to pivot, go from one extreme to the other, and really sort of take advantage of this potential loophole that we've actually found with negative gearing. And that's where we really want to try and sort of understand the leverage. So, Rod, Mato, over to you.

SPEAKER_02 13:56

This is not a change. It's a the strategy still exists. And our phones at Naked Accounting have been running hot. Investors, high net worth, the people that seek advice from professionals, they're not going to sit in their hands and do things. They're looking now for ways to maximize opportunities. And it's not a property versus shares syndrome, it's a tax deductibility versus non-dactive tax deductibility syndrome. And that's exactly what we're saying. We're saying that the laws haven't changed, they've just been refined on the property sector. But the opportunity in shares and ETFs and other liquid assets still exist. So high net worth owners will, you know, we've obviously got the time frames here. We've got until 1st of July 27 before the indexation capital gains comes in place. So a lot of people may sell before then. Then you've got the other side of the fence where because there's a capital gains tax before 12th of May, you know, 26, they'll always have forever invest. Will they ever sell that property? And will that sort of tighten the property market? So the whole dynamics in one class have changed. And I think now investors, the key is investors haven't become more conservative. Investors haven't done anything at all. What they've done is they're now looking for another deductible growth asset. So utilizing that equity that they have built up all these years by utilising the strategy you referred to. Buy property, negative gear it, long-term, build it. That wealth is sitting there right now. They're not going to reinvest in property and all of a sudden get indexed or not be able to claim negative gearing on existing property. They're going to look for alternatives. And shares are, without doubt, a very, very appealing alternative. They're liquid, they're high yielding, and they have the same characteristics and benefits of negative gearing as property had prior. So there's no question they're going to be brought on to. So they're fast, they're accessible. I think the ASX says that 10.2 million Australians invest outside of their home and super. So it's quite a significant number, Peter, and shows that there's a market already there. The 7.7 million already hold on exchange investments. So we're talking at our population, it's a large people who are taking advantage of this opportunity. But now we can supersize that by debt recycling, by accessing equity, we can turn that down that non-deductible into deductible, and that growth that we've experienced over property over the years can continue within a different space.

SPEAKER_00 16:09

Yeah, and that's the point because I mean the great Australian dream is to be able to pay off your home as fast as possible. And negative gearing was one way to be able to do that if you're a high income earner. And if that has been taken away, what's the alternative, which is what we just sort of touched on. Now, if you're investing in shares and you make a loss on those shares, you recycle that back into your home. Or if you make a profit and you've received a dividend and you've paid tax on that dividend, well, then obviously that's fully franked, and then you're then recycling that back into your home to pay down your home loan even faster. So hence the analogy of debt recycling, and that's definitely the point that we want to drive at home today. So, Steve, over to you. Why high earners may prefer shares over houses, Steve?

SPEAKER_01 16:53

That's a really good question. And for high earners, they need to be asking that obvious situation. I mean, if we talk about the mechanics of it, why would high earners choose leverage shares instead of doing another property? Well, obviously, because of the changes, negative gearing, capital gains tax, all that sort of thing. I mean, we've always said that shares are a lot simpler. Okay, they're easy to buy. You can buy small parcels off of them. You don't have to have a massive deposit like you do for property. You don't have to utilize a lot of your equity and tie it up for a property. And also property consumes cash flow. If it's a negative property meaning it costs you, then it's going to consume cash flow, whereas shares. There's several advantages. Before we talk about that, I just want to make it clear that when we invest, and whether it's borrowing or using cash, we're doing it not for tax. Our number one reason is for growth and income. A tax benefit is a secondary benefit. Okay. So we need to make it clear, and accountants are great at saying, oh, you need to invest for tax savings. And they're absolutely right. But why do we invest? We invest for growth and income. And if we can get a tax benefit as a result of it, great. And let's structure it so we can do that. Using our equity in our home, you know, debt recycling, all that sort of thing is a secondary benefit. So going back to shares, they're simple. You can buy a few, you can buy a whole lot, you can be very diversified. But the speed at which we can get into shares, get out of shares, we can do it at a moment's notice. And that's one of the great things about shares. We can be so well diversified, but they're so liquid. And I always use the example of if your business or you suddenly need 50 grand, you can't sell a bedroom or a bathroom to get that 50 grand out of your property for a year. That's exactly right.

SPEAKER_00 18:50

So let me just sell the garage. We don't need it. No one's using it. Yeah what? Let me sell the kitchen. The wife doesn't use the kitchen, she doesn't. Cook, let me sell that. We can get some liquidity that way.

SPEAKER_01 19:00

That's right. Can't sell the man cave. You can't sell the man cave.

SPEAKER_00 19:03

Sell the kitchen for keep the man cave there. Love it.

SPEAKER_01 19:06

That's right. So you can sell 50 grand of your share portfolio if you need it. And also proportionally selling shares limits the amount of capital gains tax there is as well, rather than selling the whole investment.

SPEAKER_00 19:17

So that's really good. So I've always used the analogy of a business is a small to medium enterprise that works without me. And you want to be able to generate passive income as fast as possible. You want to strengthen your cash flow, you want to have strong cash flows, and you want to be able to have a very strong balance sheet moving forward. You want to be able to get a very clear indication of what my work and capital ratio is, which a lot of people don't understand. Assets divided by the liabilities, what's the number? If it's under one, you're trading insolvently. Do you have to add more assets onto your balance sheet to be able to strengthen that? And it's really just the fundamentals of business from my perspective, of what we see on a daily basis with the businesses that are trading insolvently. So my mindset when it comes to property, and there's always, you know, my background is actually sort of the macro component of business. I understanding property and research and advisory, which is what I've done in a previous life. And so I've experienced a lot of the property. What's the word I'm looking for? I'm trying to be kind, but you know, the guys that get out there, the guys and girls, like you know, I've purchased a hundred properties in five minutes, those types of companies. And the operative word there is a company. Those types of people are selling a product, and it's not property, it's probably a course. And so if they're using the wealth that they've generated via their company to buy property, well then they've got the cash flow from their business that supports the property. But if the typical mum and dad, that's P A Y G, there's only so many properties in which they can purchase because eventually they're going to get maxed out because of the servicing component. There's only so much income in which you can earn. So therefore, my portfolio is determined by my income. So therefore, at some stage, you may have to convert that into some form of company structure to be able to increase the portfolio moving forward. But that's a sophisticated structure, and that's probably for another day. But the point that I'm getting at is if I'm going to buy a business, I want that to generate passive income. So therefore, you want me to buy a property and make a loss. Okay, I've I'm not I'm not understanding. So, you know, even negative gearing, like I don't have a problem with negative gearing not being around anymore because why would I want to buy something that's going to make a loss? You know, at some stage you want to make a profit to be able to pay that down or to be able to pay down your primary house of residence. So, you know, that's sort of my little my little tangent, I suppose, and all of that. But yeah.

SPEAKER_02 21:52

We don't take uh we don't make tax deductions to lose money. And the I think the impact is that the government essentially is like a put option, they've always had a So if if we have had cash flow loss or even capital gain loss or capital losses on investments, the government has always supported the property industry is a main vehicle to do that. But what we're saying here is that same support is available under shares, which are more liquid, as Steve said, and we still want growth 100%. We're not doing this to get tax deductions. You know, that's not that at all. I mean, that's the that's the benefit for it. And if we can de-risk by having tax write-offs in those investments for long-term growth, that's the key. And I think you've hit the nail on the head. It's about using using the equity, using the debt uh availability to create that passive income stream to continuously grow.

SPEAKER_00 22:39

That's right. Because if you've got a large portfolio, eventually at some stage over a certain period of time, it's going to compound, you're going to take advantage of the capital growth. You might sell a couple to pay down your primary house of residence. We're talking about exactly the same thing, it's your shares. And that's really the killer point. You know, when it comes to shares, there's no tenant, there's no leaky roof, there's no bloody tradies that you've got to deal with, you know, waiting for these guys to rock up. No property manager. And it's just, which is the point that you use, Steve, it's the liquidity component. And you don't have to sell a portion of the house to be liquid to be able to support your business moving forward. So now, if we are to compare the emotional profile, property prices move slowly. Share prices move immediately. I mean, have a look what's happening at the moment with the AI stocks. I mean, it's just unbelievable. And that creates two different investor experiences. And for the sophisticated investor, it's that immediacy that can actually become very attractive, which is the points that we made earlier. Rod, over to you, mate. The debt recycling and leveraged ETF, did you want to touch on that a bit, mate?

SPEAKER_02 23:44

Yeah, absolutely. And I'll probably just make a general point on that. And my son is one of those who's is starting a share portfolio to build up a deposit for a home. And we talked about the should he be indexed and taxed unfortunate. Unfortunately, the government hasn't sort of really thought that through. But one thing I do note is with share investors, and this is where the sophistication and the products are so important, when you look at your house every morning, you don't say, oh yeah, it's gone up by a thousand dollars today. There's no liquid market, no transparency there. Whereas uh with the share market, for the novice, they get a bit emotional and reactive when they see prices move. They've got the war in Iran, you've got all these geopolitical issues, tax issues, and longer term they they grow. But unfortunately, that's where sophistication and products are so important. And I think that's where the new game is. I think is that where it gets interesting, mate, and the and the strategy stack is evolving and it's evolving fast. You've now got debt recycling where you can literally access equity, which is not making any deductible gain, or it's latent and passive. And there's products designed to access that equity very easily, uh, take the risk and take the control and knowledge factor out of it so that you can have professionals who can do that for you. With Peter with A Pickle, but also with uh the investment advisors, Oasis. And I know that Steve would access a number of product providers, Macquarie Banks and the G and others in the market who have products out there. The home equity investment splits, you know, where you can apportion a certain amount of equity across the investment cycle and some to the non-deductible parts, uh, because obviously it's a balance of risk and reward, and everyone understands that. There's NAB Equity Builder, which is obviously a specific product, which is very, very active in this space. There's the geared ETFs, and ETFs probably the fastest growing investment share class because they are diversified and they are managed by managers. So you don't you don't need like if you if CBA goes down that's 100% of your portfolio, well, that's not good. But if you've got a diversified ETF exchange traded fund, of course, that's significantly better. Margin loans have always been the bastion of high income earners and sophisticated investors, yeah, where like if the market does come down, like during the GFC, people were using margin loans to have three times the exposure to their growth upside as opposed to what they could afford at the time. Obviously, and you need to talk to people like Steve and stockbrokers to look at the risk management side of it because you don't want to over-leverage, there's got to be a reasonable assessment made of that. And then structured investment lending. So each product solves like different emotional problems, and I think that's the key. It's about getting good advice, but both for non-sophisticated, but also even sophisticated investors, and making sure the structure's right, the risk profile's right, but also it's no good sitting there with a large lot of equity and doing nothing with it when there's so much opportunity there to diversify and to make that money not only deductible, and I will, it's probably Steve and I knocking heads on this one. I mean, obviously, I look at two things. I my in my role as an accountant, I'm looking to minimise the tax, and Steve, his role as an advisor, is looking to grow the portfolios, and Pete's fitting in and accessing that equity for us. So it's a good synergy. We each have different focuses.

SPEAKER_00 26:40

That's why we're all on here today.

SPEAKER_02 26:41

Yeah, yeah. We all play part, and I really feel that this debt recycling is untapped. I feel that the market's not aware. I always say to people, Pete, I said, blinking your property's probably gone up $100,000. When we access clients' property and we do valuations, I think a lot of the owners are surprised at how much equity they actually have in their properties and how much.

SPEAKER_00 27:02

Don't let it sit there. Convert that lazy equity into a passive income stream. That's the point that we really need to hammer home.

SPEAKER_02 27:09

And from an accounting point of view, from not from non-deductible to deductible.

SPEAKER_00 27:12

It's because if it's under your personal name, it's a non-deductible home loan. If it's under your company, well, it becomes a tax-deductible business loan. So that's the key.

SPEAKER_02 27:20

And you can have your cake and eat it too. We've still got the principal place of residence exemption. So you're still getting the tax-free income from the PPI, but we're now converting that equity to deductible. You're getting capital gains tax ex free.

SPEAKER_00 27:32

You're not paying capital gains and you're paying down your home loan even faster. So that's the key. Steve, traditional margin loans. Did you want to touch on that?

SPEAKER_01 27:40

Sure. Yeah, they used to be quite prevalent. A lot of people used them. There were several companies around Australia that were getting people to do massive margin loans. They're actually doubling up, they're borrowing equity out of their home, using that to buy into the share market and then taking margin loans over those shares. That's now not allowed. It's illegal. So margin loans aren't used as much, but they still, for the sophisticated investor, for someone with a good amount of experience with the right margins and conditions put in place, margin loans provide fast leverage, they accelerate how much you can invest and then your potential growth and income over time. But isn't this there before they're dangerous? And why are they dangerous? Well, if the market falls, if the shares that you're in fall, then there's certain trigger points. And once you go below that, the lender then requires you to top up the investment or top up the loan. And the danger there falls that, like we had in the GFC, a lot of people had to sell their investments in its entirety because the lender was requiring them to pay down the loan because the loan ended up being worth more than the investment. And people didn't have the money to pay it down. So they had to sell the investment, which means you're selling it at a loss. And as we all know, you avoid selling at a loss where possible, unless you're trying to offset other gains that you've got. So you know, margin loans are probably one of the last things that we would use, which certainly look at your equity in your home, get that debt recycling really working. What other assets do you have that we can leverage? What's your cash flow like? All those sorts of things. And then once you've done a lot of that and built a portfolio, then we can potentially use margin margin lending. But be very careful, don't just run into that. Now there are other products, as Rod mentioned before, the Nab Equity Builder, and there's other products there. Obviously, I can't recommend in this podcast that you use the NAB equity builder. I'll just put my disclaimer there. But it may be suitable for you. There may be other things. And then we avoid margin calls then. And that's what I was talking about before when the investment falls. You have to throw money at either the loan or top up the investment, and you may not have it. So it's important to get someone to explain your options. As Rod was saying, get advice around this. Don't just jump in, borrow money, throw it into investment. You need the right structuring, you need the right loans, you need the right products, and you need the right investments, all to suit your time frame, cash flow, equity position, debt position, etc.

SPEAKER_00 30:22

It's got to be a holistic solution. Absolutely. Yep. Absolutely. And so if the industry is selling confidence, which I think is the point that you're getting out there, Steve. And you did articulate that very well. Thank you, mate. It reviews and it also tells the story because when people feel safe, then they want to be able to move forward, they get a little bit of confidence, and they want to start looking at other holistic solutions. Because we've always said you need to diversify your overall strategy. But this category, it's not about selling investments, it's about selling certainty, clarity, and obviously that emotional stability during that volatility. And when there are winners, they won't always be the loudest educators. And that was the point that I was getting at before with a lot of the property educators that are out there. There's a business behind the property educators, ladies and gentlemen. Their portfolio may be large, but their business is also larger. So therefore, the cash flow that they're generating is obviously through the business, which enables them to buy more property. The key to success is to be able to generate wealth through a business, which enables you to not only have a diversified portfolio, whether it's property or it's shares. And that's just the point that I wanted to make with a lot of the property educators in respect to this particular podcast.

SPEAKER_01 31:46

Peter, I think you're absolutely right. The at what we do, and I know you guys too, is multiple sources of cash flow, of income. And a lot of business owners just are focused on growing their business, which they should be. That's where they put their time and effort in to produce income, but then they don't go and diversify their investment to produce other sources of income. So multiple sources of income, that's the goal, and then you're covered on several bases. Correct.

SPEAKER_00 32:11

You need the passive income to be able to support a portfolio, whether it's shares or property, it's got to come from somewhere. Okay, so let's get into it. Margin, M for margin, which is the point of this podcast. Rod, let us know about the margin, mate.

SPEAKER_02 32:25

Well, well, Philip, probably start with this one. I don't know where I read this, but I've read it a few times now. But apparently 40% of Australians own their own property outright, which is quite incredible to think that. I mean, we all complain about interest rates and inflation at the present times and how businesses and homeowners and cost of living pressures are impacting this all so so dramatically. But and I've said for a number of times that there's a two-speed economy. There's some very high net worth people, and we've never had you know higher uh asset values and net worth than we have now. But the margin, without a doubt, look at the economics in this, and you can get seduced. There are, as you say, product sprookers out there and property sprookers, and I shouldn't probably use that you're in sprukers. I wasn't going to use that word. I said property educator.

SPEAKER_00 33:06

I was trying not to use the spruk word, but there you go. We've said it, ladies and gentlemen.

SPEAKER_02 33:12

And I mean, and and they are product sales, and look, and and and property, I guess it doesn't offer the flexibility of what a share does. If you need to sell something down to make cash or you can sense the market turning. If there's some event today, COVID number two, whatever it might be, trying to sell a property takes time. It costs a lot with uh real estate commissions and advertising and all and all the potential CGT. Whereas with the shares, it's T plus two. If you're owning direct shares, sell on Monday, Wednesday morning the money's in your clean in your cash management account, you're you're rough off the run. So it does off that flexibility which you can't otherwise get. Why don't I maybe run through just a little example? But if you've got a quarter of a million, a $250,000 portfolio, and you put $100,000 worth of equity in and you access $150,000 of the debt, whether it be from a debt recycling uh strategy, Peter, or otherwise, we've just done some rumbers here. The best return on the equity would be around the 20.5% mark, and the worst case would be 30, 32%. So have a look at that. That's a leverage trade. I mean, you've only put $100,000 in, but you can potentially, you know, you're putting a third of that at risk by this and 20%. Now, what it does, the leverage trade, it magnifies the upside, but it also magnifies the pain. So what we talk about here is having products where they have the cash flow to service them. When we work with advisors like Steve, we can actually look at the cash flow. And as accountants, we can run cash flows for our clients, but they've got the business income to support, they've got multiple passive income sources to support. And over time, history has shown us that assets always rise. Now, I mean, I'm I'm not an Ostradama, so I'm not going to put down any prediction on what the markets are going to do. But uh, if history repeats, which I believe it does, then longer term, these fluctuations, you take away the need for margin calls, you take away the need for excessive leverage, it's diversification, seeking professional advice, and utilizing that equity in a conservative but considered manner. And I think that's where the margin, that's where the opportunity lies, Peter. We now have 40% of people own their property outright. I mean, when we the gold cast has now got a higher median unit price than than Sydney. And we're talking of some phenomenal uh equity amounts there, which are essentially sitting there doing nothing. And not only do they help the individual, they help the tax situation and they help the overall economy. We want money invested in shares who are employing people and companies and moving, you know, we don't sitting in pre-existing property doing nothing. It's not helping anybody, it's not helping the economy. So, yeah, there's a lot of advantages, and that's where the margin, I believe, lies better.

SPEAKER_00 35:50

Sure. Steve, before we close off, your thoughts?

SPEAKER_01 35:53

No, with the current interest rates, I mean, all of us can barely remember when interest rates were this high. It's been a number of years. And will they go higher? That's a big question, and no one can really answer that at the moment. But with many of these leveraged portfolios and property in particular, they start out from day one being negative, negatively geared, and that consumes your cash flow. And as you've uh addressed before, you've got limited borrowing ability. You can't keep adding properties like zero to a hundred properties in ten years. It sort of says that. And what does this mean? That's exactly right. Practically, completely different story. So if we're negative from day one, then this means that investors have to rely on capital growth, tax offset, it's future compounding, and time. It really does take time. And all of that supported by their personal or business cash flow for a long period of time, which then limits you expanding businesses, doing other investments and that sort of thing. So your actual opportunity to grow your wealth is limited. Now then we come and see these changes in the budget. And that has flipped us all on its head as we've been talking. And that's yeah, absolutely. And that's assuming, you know, the old way of doing it, which is now being re-examined by us and many, that's all assuming that the market grows steadily. What if the market stalls? Okay. What if we have a downturn for a period of time? And this is where we've really got to ask that question. And the old strategy really is emotionally brutal. And this is where a lot of people, as we've said, won't invest because we're psychological human beings, we can't handle the stress. And that's where, as Rod said, yes, there will be ups and downs, but you need to get that advice. You need to get that advice from a team like you're talking to now. And it will become over the next few months as things get ironed out with the budget changes and and see if they get passed and implemented and and who knows what a future government will do to them. But we can still keep pushing forward. We've been talking about some really sound long-term good strategies that will produce that growth, will produce that extra income you need in light of the changes. So I think it's not a negative season, it's actually quite positive. It's just getting us to refocus. And any business owner will know you have to adapt with the changes. There's always opportunity.

SPEAKER_00 38:22

There's always an opportunity. And that's the thing. So even from an investor's perspective, and just before we score this off, but sort of my lasting point is as a financier, if negative gearing has been removed, that means the servicing has also been affected. So, and what do I mean by that? If I'm an investor, I've got X amount of dollars, I now don't get negative gearing. So that's going to affect my servicing. So therefore, that means I I have to borrow less. And if I'm borrowing less, when it comes to an auction, I'm offering less. So that in itself is going to have a significant impact on property prices in its most simplistic first principles component. So I just want to put that out there. But Rod, over to you, mate. Margin. You went through the numbers. What do you score it out of 10, mate?

SPEAKER_02 39:08

Yeah, it's on that point really quickly. Macquarie and Westpac have already uh changed their uh serviceability based on the negative gearing policy change. So it's so it's very true. Look, I think in the margin, this is a huge opportunity, Peter. Obviously, subject to professional advice and and and and personal circumstances, but I rate it a 7.5 out of 10 better.

SPEAKER_00 39:26

7.5 for Rod. Steve, what do you score at a 10, mate?

SPEAKER_01 39:30

Yeah, I think what Rod said there was make sure you get professional advice. Once you do, I'd I'd give this an 8 out of 10.

SPEAKER_00 39:37

8 out of 10, fantastic. 8 out of 10 for Steve for margin. All right, well, it's over to you, Steve, for operation. Can you for operation? As the audience know, we go through our moat strategy. We want to really sort of break this down. So margin, operation, advantage, and total addressable market. Steve, tell us about the operation. Okay.

SPEAKER_01 39:58

So it's this is not a simple advisory business. You know, workflow includes debt tracing, responsible lending, lender structuring, you know, portfolio implementation is is very important. There's compliance and ongoing reviews. So it's not just about stepping out and going, yep, let's go and get it all. It will take some expertise and calm down everybody. Absolutely, that's right. Don't rush in. You need to do all these points and get it reviewed by other professionals. As we keep saying, it's very important. The number of people that I talk to that show me what they've done, they come in for advice and say, Oh, this is what we've done. It's like, well, why didn't you come and get advice off your accountant and me and whoever before you actually stepped out to do it? Because now we're going to undo it all. Yeah. And that's just often we have to, and that's going to cost them.

SPEAKER_00 40:48

A bit like a builder, hate hate redoing extensions. They don't know what you've done. Let me start from scratch. It's always a lot easier. Yeah, no, absolutely. And that's where this becomes a trust business. The the customer is effectively outsourcing financial confidence. So to be able to implement this strategy, the operations component, there's a lot that goes into it. If this isn't something that you can Google or get on the Chat GPT and ask it to print you out a PDF, you need a human in the loop to make sure that you are on the right path. So, Steve, because you gave us a quick rundown on the operation, what do you score it out of 10? How complicated is it? Is it complicated or is it not complicated? And what do you score it out of 10?

SPEAKER_01 41:37

Yeah, I mean, for the three of us, it's not complicated. Um, because we understand it. And I think that's what everyone needs to take away that's listening is it isn't complicated. Don't be scared by it. You just need to get educated. We're not educated on these things when we go through school uni, starting a business, first start investing. Get the right people around you and they will educate you. They're not selling you something, they're educating you on what's best for your situation and what you are able to do. The the score on this, I would give it once again an eight out of ten. It's actually not that complicated. It's essential that people start to understand and learn this, and it doesn't take a lot to get up to speed.

SPEAKER_00 42:18

It's interesting, yeah. Easy to understand. I thought you would have gone the opposite. But yeah, look, it really that isn't. I mean, operationally, it's not, and and I and I do agree with you, mate. It's not something where you've got to go out there and start a business, you've got to build a brand, you've got to build systems and processes and get customers and things like that. You're literally just sort of reading up on it, go speak to your advisors and implementing this process for you operationally. So I actually do agree with you. Rod, what do you score at out of 10 operations?

SPEAKER_02 42:48

I actually agree as well, but and I think there's a lot more sophistication and products being developed and put out to the market now, and you know, and the product providers have are certainly moved in line with you know they're going in. I think now that the negative gearing laws have ch are changed and changing, that these products were even more sophisticated, even more attuned to the uptick in demand, which I think we're all agree on this in this podcast we're expecting. But at the moment, I think it's probably just due to the lack of people taking advantage of financial professionals. I'm probably thinking it's a bit lower. I'd probably give it a six at the present time and and hoping it will probably move a bit higher as knowledge and awareness becomes available.

SPEAKER_00 43:26

You're gonna have to, because I mean, if negative gearing's been removed, then this is an opportunity to be able to invest in shares and focus on debt recycling. You're gonna be a lot busier moving forward, Steve. So congratulations. Good stuff. And the next is a for advantage part of the moat strategy. Rod, over to you for advantage. Yeah, absolutely.

SPEAKER_02 43:48

Well, look, the moat is not the idea, it's the execution. Anyone can sort of make a simple post and say, well, debt recycle your mortgage now. Yeah, in it. So that sounds pretty easy. Let's let's just jump on board and Do it, but as we all know, and Peter, you and I have spent a lot of time helping people out with investments and distress through distress sort of situations. Structure is absolutely important. It's going to be structured correctly. It's got to be remained compliant. Clients need to be aware that markets go up and down and how they need to be managed and dealt with and be able to attune to what to do in market falls. That's I guess it's building long-term trust. That's the real mo. It's about putting in place working with good people, putting in place rigid and strong strategies or that last the test of time.

SPEAKER_00 44:32

I couldn't agree with you more. And just to expand on that point, when we're talking about recycling and equity extraction, in its simplest form from a mortgage broker's perspective, that would be a top-up. I'm just topping up my home loan. And you get a top-up and you go on a holiday. This isn't a top-up. This is equity extraction to be able to help wealth building in the future. And I just wanted to really just sort of hammer home that point, mate. So thank you for thank you for bringing that up. I just wanted to expand on that just a a little bit further.

SPEAKER_02 45:05

Yeah. I mean, I think it's we'll all agree. I mean, if your property's gone up and you've got to buy in the same market, you sort of haven't really, you know, you've got more equity, I guess, but you're sort of you're you're sort of shuffling it into the next property. Whereas if you've got equity extraction and debt recycling, where you actually like you've got two properties and you sell one or or you keep that in the capital equity uh increase, you've made real gains. And uh I think from properties done has been exceptional in the past. No one denies that in this room. It's been an amazing asset class. And we're just saying now that the laws have changed, those the same premise of you know getting non-deductible equity out and and growing your overall portfolio is a sound strategy other long term.

SPEAKER_00 45:46

But that was a strategy before. So I've gained a lot of equity, I've I've taken out that equity and I've used that to buy another property. And the other property that I buy, I'm on a I'm a high-income earner, so I want to negatively gear that. For me, from my perspective, it would be like me selling my business to an investor, and I haven't proven the business model, and now I've been diluted, and now my shares have gone down to zero. Like it's just that there's little analogies that I think about from a holistic business perspective where the strategy of taking equity out to buy another property that's negatively geared, you're actually diluting the value of your primary place of residence if you haven't had the right structure. Steve, would I be right in saying that as a financial advisor? I'm going off my tangent here as per usual.

SPEAKER_01 46:30

Yeah, yeah, absolutely. Absolutely. We've been touching on this the whole podcast. It's wasted and the game's changed. And I you've said before that Australia is very property focused and it and it still will be for a while, but if you look around the world at other countries, a lot of people don't own property in other countries, they have businesses and shares and do extremely well out of it. So yeah.

SPEAKER_00 46:53

Because they're liquid. All right, Rod, out of ten, mate, what do you score at advantage?

SPEAKER_02 46:57

Well, I think the advantage is high. I think there's a huge opportunity here. Nine. Nine for you, Steve.

SPEAKER_01 47:04

Yep. Yes, I think both. I agree. I think that the the game has changed, where to get the advantages changed, and so this particular opportunity I'd I'd give a nine as well.

SPEAKER_00 47:16

Now, the next part of the pod is total addressable market, TAM, for those that don't understand the breakdown. And this is a big opportunity, it's also a big marketplace, but we've got to be pretty conscious about how we explain this being a total addressable market. Typically, when people are talking about a TAM, they're trying to raise money and they say, Oh, it's a billion dollar industry. And it's like, okay, great, but what's your theory? What's the facts? I mean, what's the thesis in respect to that total addressable market? You know, when Rod and I are talking about a total addressable market to help businesses that are in distress that have a large ATO debt, we know that the total addressable market is over $60 billion because that's what the ATO is collecting. So that's the type of thesis that we want to try and sort of break down. So, Steve, did you want to give us a quick rundown of the TAM? Over over to you, mate.

SPEAKER_01 48:07

Yeah, certainly. The TAM here is enormous. I mean, Treasury estimates that 230,000 individuals acquired negatively geared property in one year alone. I mean, that's massive. Now let's assume that 20 to 30 percent of those people that are doing negative property move away from that and explore leveraging and buying shares instead. Okay, one, what's that going to do to the property market? We don't know. It will be interesting. But if a good portion of investors are are moving away from property and leveraging into shares now, then that creates incredible opportunity. And there'll be billions of potential asset flow. So you might see on the news from time to time, remember over the years when they talk about how much money has gone into the share market. Well, what happens when people start buying up more shares? Price of shares go up. Yes, and the share market increased. And as you've already already said, Pete, the businesses benefit. They can employ more people. And that the flow on effect is massive. If the unemployment rate comes down, people are earning more, businesses are doing better, then people have more cash flow. And that only supports more businesses, which creates more growth in the share price. So there's hundreds of millions in advice opportunity here. I mean, this isn't shares aren't a, for many people, a fringe topic anymore. This has been brought into the spotlight and becomes the barbecue chat has changed.

SPEAKER_00 49:35

It's no longer talking about property anymore because you can't negative gear the the barbecue chat is about shares. I love it. Love it.

SPEAKER_01 49:43

Absolutely. So if you're not considering this, uh because it has been brought into the spotlight, it is front and centre for wealth creation and for many other areas, then you're going to be left behind and you really need to start thinking about it.

SPEAKER_02 49:55

Can I add two points to that, Sig? That's I couldn't agree more than what you've just said. I remember years and years ago uh being an old fart and all, but uh I went to a seminar by Bill Island. I agree with that and um resemble that remark? Yeah, that's it. And Bill Owen from Mariner Financial Services did an analysis back when the SGC rate was a lot lower. And just based on you know compulsor SGC uh contributions alone, he looked at the market market growth and it was doubling in like six or seven years, whatever that uh I come with the exact purpose, just showing how the TAM and opportunity was there. And when you consider things like uh in Australia, like I think it's 40% of the ASX uh 200 is a big four banks, yeah. Prices of those uh assets, supply and demand, uh as we've often talked about, the opportunity for growth in our market and is incredible. Just the market alone. We are a small market, and I think we make up less than one percent of the world's overall equity exposure, which is phenomenal. Yeah, I mean you consider we're such a developed country and relatively wealthy country in comparison to most of our our counterparts.

SPEAKER_00 50:56

Yeah, and that's also one of the things that frustrate me as well is about Australia, because if you have a look at the ASX, the the top four companies are banks, yeah, some of them are government funded, but yeah, yeah, and and you know, and if you look at the American stock market, you know they're all privately owned companies, yeah, Nvidia, Microsoft. So, but that's a that's a topic for another day. Tam, what do we score at, Steve?

SPEAKER_01 51:18

I'm gonna score the Tam at eight out of ten.

SPEAKER_02 51:20

Rod? Well, I'm gonna go nine point five, I think that big and this, yeah, I think it's huge.

SPEAKER_00 51:26

I don't think we've ever had a nine point five on this podcast. Oh well, haven't we? Yeah, you're first, mate. I love to do things differently. Yeah, yeah, no, you've definitely done things differently. Nine out of ten. That's no, that's great. Look, it is definitely a big opportunity, and I hope if our audience get anything out of today, there is a big opportunity to be taken advantage of. Now, the next part of this podcast, gents, is that we typically want to try and sort of work out whether or not if you are to buy a particular business, are you going to earn a million dollars in the first year? This particular topic is a little bit difficult to be able to assess that. But what we want to try and do is assess it that if you are an advisor and if you're starting an advisory business and if you're a financial planner, for example, what would you have to do to earn a million dollars if you were to sort of really hone in on the debt recycling strategy? So we're gonna look at it from a little bit of a different perspective. But Rod, do you want to touch on some of the numbers on whether or not if there are some advisors out there that are looking at this as an opportunity to sort of break into this market?

SPEAKER_02 52:29

Yeah, absolutely. Always come the numbers to the accountant, don't you? That's fairly. Yeah, of course, yeah. Holly, you you know to calculate. So I'm gonna flick you the numbers, mate. Well, depending on what a uh median sort of advice fee might be, I did a quick calculation of sort of 3,960 sort of circuit comes up as a sort of number we particularly typically looking at for an advisor. So to hit the $1 million revenue mark, you break that down, that's 253 clients. So roughly one paying client uh every business day. Now, is this possible? The answer is absolutely. The opportunity here, we talked about the TAM and I said 9.5, so I definitely think it's possible. But you've also got the fact a lot of this is not once you've got the clients here, you've got referral clients, and I always say you know an existing client is a lot easier to deal with than cross-sell to than a new client. So I think that 253 becomes a lot more relevant in that sort of period of time. I think as the opportunity becomes more widely known and publicised, and I think accountants will, you know, we've all been talking together now about what we should be looking to our clients structure-wise with obviously trusts, but also investment-wise and tax deductions. And I think it's inevitable there's only going to be so many new properties, despite the government promising 10,000 hit, and there's no everyone knows that's not achievable. So, where do we go from there? Do we you know pay ridiculous prices for small new developments, or do we look at uh you know growth assets like shares? So I think right now, is it possible? The answer is yes. Is it easy? No, and that's where, as advisors, we need to work together and we need to provide constructive and considered and conservative advice to our clients, but there's certainly a huge opportunity. So those that's the sort of numbers I guess we're talking, Peter, but I think that eminently achievable.

SPEAKER_00 54:08

Great breakdown, as always, mate. Thank you. So we want to we want to try and sort of break down the real risk in all of this. And you know, when the good old tax tale wags wags the dog, we want to make sure that the advice that we're giving and our customers certainly identify the danger moving forward. So if someone only likes leverage shares because of the tax deduction, they probably don't understand leverage because the tax benefits don't they they don't always protect you from you know market crashes, margin calls, panic selling. You know, we we had runs on banks a couple of years back in the US, so you know that's always an interesting one. But bad structuring, emotional decisions, and it's like anything, you gotta be able to have the stomach for it. If you haven't got the stomach for this, then this probably isn't the right strategy. But you know, neither is property. You get your ups and downs within the property market as well, and then all of a sudden, oh, this is this is too bad, or I'm sick of dealing with a tenant, and I end up selling it. So you've got to have the stomach for the right structured advice and also the right process moving forward. So borrowing to invest is a strategy, it's not a personal trait. So the final verdict before we wrap this up, Steve. Do you want to give us the final verdict, mate?

SPEAKER_01 55:25

Yeah, yeah. I think for uh Christians for operators, this really does look like an emerging niche, and not just a niche. Um, I think it goes wider than a niche. There's so much opportunity for us all advisors and clients to take advantage of this. I mean, and especially for for specialist brokers, content lend advisors, you know, structured lending businesses, and ETF of ecosystems, these these are all gonna benefit from this. I just don't think we've yet been able to fully comprehend and think through the actual full opportunity here. So I'm excited. And as you said before, I need to get ready for more customers, clients, and I think we all need to because we're gonna have to have our systems and resources in place to handle it because people are gonna need the advice.

SPEAKER_00 56:16

Yeah, you can only get so much out of Chat GPT, that's for sure. You actually need a real human that knows what they're talking about, believe it or not, ladies and gentlemen. Rod, what about for investors? Very controversial there, Peter.

SPEAKER_02 56:27

Look, I mean, it's a very, very different conversation. Uh, with property prices now and the serviceability and the lending criteria tightening, it becomes, you know, a definite choice now uh to be made. I think any advisor is not having the the discussion with the clients about the you know different asset classes are probably doing their clients a disservice. Certainly is a different a different strategy. It it rewards patience, yeah, it rewards discipline, it rewards liquidity, and probably with the right advice and the right product, it actually rewards emotional control. So it doesn't have to be done, you know, like yeah, but no not no longer the barbecue conversation, but you know, with the right advisors. So yeah, so it's a like I think these strategies always need to be considered. But I think from an accountant perspective, it's certainly going to be an attractive asset class, which we'll be sort of talking, having discussions with our clients about uh where they go. We're looking at structures now and we're looking at investment types. Um, obviously we're not investment advisors and we're further them out, but certainly general discussions need to be held around this area.

SPEAKER_00 57:26

Yeah, no, I agree. Because I mean the the tax changed the the lane markings, it didn't change human behavior. We're still going to have the barbecue chats, right? And high earners will still chase leverage. And, you know, even your your average mums and dads, the middle income earners as well, they're looking at diversifying. So definitely human behavior hasn't changed. Even the younger generation, you know, how do we purchase a property that enables me to be able to achieve that growth? I mean, it's there. We've just got to be able to guide the customers the best way that we can. So the question is whether you can survive it, which is what it comes down to before it's having the right stomach for this particular strategy, and we are certainly here to help. Okay, ladies and gentlemen, the end of the podcast. This is where we add it all up and whether this is a good investment, a bad investment, or are you going to get into a pickle? So for margin, what did we score it, Rod? So for collectively, it was a 15 out of 10 for both you and Steve. Okay, yep. Yep. Operations, we've got a collective score, which is 14 out of 10. Yes. We've got advantage collectively, it was 18. 18, 18 for the both 18 for the both of you. That was a big one. Yes. And total addressable market, a collective score of 17 and a half. So what's the total there, mate? 64.5. 64.5. So, ladies and gentlemen, this is probably one of the highest scores we've had. This is a good opportunity. So, certainly get the right advice, understand the processes, and because it's like with anything, you've got to have the stomach for it, as mentioned before. And if there is a business or an investment trend or industry that you want us to break down, send it in because we don't want you to get into a pickle. And if you like the podcast, send it to a friend because it helps other people find us. Steve and Rod, I appreciate you guys taking time out on jumping onto the pod, and um, we look forward to catching up again.

SPEAKER_01 59:36

A pleasure, Peter. Thank you. Thanks, Steve. Thanks, Peter, thanks, Rod. Great fun.

SPEAKER_00 59:43

Absolutely. Thanks, guys.