Superannuation is not an investment


I was having a conversation with a new client the other day and we were discussing how using superannuation would be the easiest path to building her retirement savings. However, she was conflicted because she also took advice from her sister who said she ‘did not believe in superannuation’. 

Generally, when someone says that ‘they do not believe in superannuation’, it means they believe one of two things:

1. Superannuation investment returns are unreliable and they would rather invest in direct property or some other non-super investment scheme where they have more control.

2. The government keeps changing the rules for the worse, so it’s not worth using super at all.

So lets deal with the above misconceptions of Superannuation.

1. Superannuation is not an investment itself. It is simply a tax structure through which you can invest. Most investments that you make directly are also available in super. So remember, the returns are a product of the investment selected, not super itself. Building wealth in super means a likely tax free retirement. Building all your wealth ‘outside of super’ means you will probably pay income tax for the rest of your life.

2. This year’s federal budget saw the biggest round of changes to the superannuation system since 2006. This was in response to the country’s swelling debt levels (deficit) and the misuse of superannuation by very wealthy individuals.

However, keep in mind that superannuation is just one legislated area in which the government can change the rules. They can also choose to pick on property specific tax rules (e.g negative gearing), family trust rules, company and small business tax rules, income tax rules etc. So there’s no reason to get negative on super just because the rules change sometimes. No wealth creation strategy (super or non super) is safe from rule changes. We simply adjust your strategy and ‘play the game’ as best we can.

In the end, super will always need to be a low tax structure to encourage retirement savings and we should always take advantage of this.

Hope this provided some clarity.

Are credit card and Frequent flyer programs worthwhile?


I think rewards programs (e.g Qantas, Altitudes,Velocity) can be worthwhile if you understand them. The key points being:

  • A rewards program should not have too much influence on your spending. These programs are designed to encourage you to ‘spend more’ by marketing offers to you and tempting you with ‘rewards’.
  • If you are not good with managing your spending, you are best to avoid credit cards all together.
  • Redeeming certain rewards can offer you a much higher ‘return on investment’.
  • Credit card surcharges can offset the value of any points earned. Avoid them where possible.
  • Some cards & programs are better than others.

The ideal situation for someone to take advantage of a rewards program is where you have your own business. This is because you can run all of your business and personal expenses through credit cards that generate reward points. I have a few clients that generate massive points balances each year by running all of their normal expenses through credit cards, giving them free overseas flights every year.

If you don’t have your own business, you can still take advantage of reward programs by running your regular expenses through certain credit cards. Although it will take you a lot longer to accumulate a significant balance and annual fees are more of a concern.

Which rewards offer the best redemption rate?

Something many people overlook is the ‘return on investment’ for different rewards. Unless you don’t fly at all, I would suggest using points for flights. Below you can see why:

1. Return domestic flight Brisbane to Sydney with Qantas. Points required = 24,000. Flight would normally cost $300 (average price). $300 / 24,000 = 1.25%. This means you are getting $1.25 on every 100 points you earn. This can be a higher % in peak seasons where the average flight prices are higher.

2. Business class upgrade Brisbane to Singapore/Hong Kong. One way. Points required = 40,000. Upgrade cost approx $1,500 (average price). $1,500 / 40,000 = 3.75%. This means you are getting $3.75 on every 100 points you earn.

3. Gift voucher/item purchase for $100. Points required = 20,000.
$100 / 40,000 = 0.50%. This means you are getting 50 cents for every 100 points you earn.
‘Cash back’ normally has a similar, if not lower redemption rate.

Travelling in economy class is not fun, so my preference is to target business class upgrades with my Frequent flyer program. Business class airfares are crazy expensive, but working the points programs makes this type of travel a possibility for me.

Hope this write up was of value! Please let me know if you have any questions.

Yours sincerely

Josh D

Note: The above examples are based on Qantas Frequent flyers. 

Property investment experiences we can learn from

In this blog I just wanted to share with you some insights into property investment. I don’t currently hold any investment properties myself, because I prefer investments that are easy to buy and sell (liquid) and investments that I can influence (small business). However, I am definitely not against investing in property, as it can be a great way to build wealth tax effectively if done right.

In today’s blog I’ll share some insights that come from working with clients and friends over the last 3-4 years who have been involved in the property market on a small or large scale. I won’t be referring to anyone’s experience individually (please be rest assured), because each insight/observation on property investment represents multiple people’s experiences.

Hopefully these insights will help you in future.

Flipping properties is not very effective anymore

Every now and then I come across a client that wants to quit work and renovate houses for a living. The plan being to buy a rundown house, renovate the house and sell it for a profit. Unless you’re a builder who can make substantial improvements at a low cost, I don’t find that this is an effective approach anymore. Amateur renovators use to have success with this strategy when housing was cheaper and the entire market was on the rise. With the high costs of buying and selling, you’d probably be better off buying, renovating and then holding as a long term investment. The quick profit doesn’t seem to be there anymore.

Shows like this get people excited about renovation projects. 

Be wary of regional and coastal Investment properties

The vast majority of negative experiences I’ve seen have come from clients investing in regional and coastal areas. When the economy starts to slow, regional property can lose value quickly and can be very hard to sell. Here are some of the more extreme examples;

# Investor purchased property in regional QLD mining town for $500,000. Mine ceased operation and property is now worth $77,000 and is difficult to get rented.

# Investor purchased penthouse beach front apartment on the beautiful Fraser Coast for $1.1 million. After the GFC they were struggling to find a buyer at $400,000.

On the flipside, I have had some clients make good money through regional investments. However, this was during the mining boom. It’s a high risk/ high return game.

I will always prefer clients buying property in capital cities. It’s a much safer play.

Town on 1770 QLD. My favourite place in Australia, but I wouldn’t invest there personally.

Consider building an investment property instead of buying an existing one

When you build an investment property there are 2 main benefits;

  1. You have a chance of getting extra equity in the property. E.g. If you build for $460,000 and properties in the area are worth $500,000 on average, there’s $40,000 straight up. You can’t get this ‘bonus equity’ if you buy an existing property. It can be like buying wholesale vs retail. Please note: I’m not talking about ‘off the plan’ units here, they are a different investment all together.
  2. You maximise tax benefits, as the property is brand new and you can claim a high amount of depreciation on building, fixtures and fittings.

There are obviously risks that come with building (delays, dodgey builder, budget blowouts), but the most successful property experiences I’ve come across in the last few years involved building/ splitting or developing on a smaller scale (1 or 2 properties at a time).

Buying property in a self-managed super fund

Buying properties in your super fund can be pretty messy, especially if you need a loan to do it. I don’t think it’s a great idea to have all of your future retirement savings in one investment either. Property purchase in superannuation works better if you have enough funds to buy the property outright and it forms part of your investment portfolio, not the whole portfolio.

Overall I think that property can be a great investment, but here’s my general advice;

  • Buy for the long term, as entry and exit costs are high.
  • Favour capital cities
  • Lower your expectations around capital growth
  • Make sure the property suits your budget and tax position long term
  • Crunch the numbers and do your homework on the property, once you pull the trigger you might be stuck with that investment for a long time. Never rush in.
  • Explore the option of building instead of buying existing property

Anyway, hope these insights were helpful. Till next time!-

– Josh D

Important notice

The information provided on this website is general information only. It has been prepared without taking into account your individual objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information, having regard to your objectives, financial situation and needs. We can assist you in determining the appropriateness of any product or information mentioned on this website.

Posted by Josh Dalton on September 24, 2015 | Permalink

Investment Highlights 2015 so far……..

Sydney median house (sale) prices pushes through $1,000,000

The Sydney housing market has been red hot on the back of record low interest rates. Melbourne has also experienced strong growth, but not in the same ball park as Sydney. There may still be value in parts of the property market (Brisbane has been fairly flat), but proceed with caution. Interest rates will eventually go up again and I’m not sure how property owners/investors with large mortgages will react. A sharp downturn in our economy could also spell trouble.

Banks are already starting to ‘tighten’ their belts and make it more difficult to borrow. They are especially looking to reduce the amount of investment loans on their books.


(I’m not saying it’s a housing bubble, I just thought this was funny)


The idea of Greece being the first developed country to default on its debts and be subsequently booted out of the Eurozone sent panic through global stock markets. Default was avoided, but talks still go on. Markets have since recovered.

The Chinese stock market Crash

Big news has been made of the Chinese stock market crash. The market lost around 30% of its value in just over 2 weeks. However, this needs to be put into context as the market was up over 150% for the 12 months before the crash happened. It’s funny how the media like to focus on the falls, not the gains. The Chinese government does appear to be tampering with their stock market though, so not really a place we want to invest much moving forward.

Iran deal likely to keep global Oil prices low

Global sanctions (restricted trade) imposed on Iran have been lifted, as long as they promise to never make any nuclear weapons. This is a great win for the citizens of Iran who have been struggling for years. Iran is oil rich and lifting these trading sanctions will mean lower oil prices as more supplies hit the market. Oil prices are already at all-time lows, but unfortunately the big fall in the Aussie dollar against the US means we have not seen the savings at the pump. A fall in oil prices is not great if you are in the industry, but does boost global economic activity via lower fuel prices.

Oil prices act like a tax….and most of the world has received a massive tax break.

Our Mining sector continues to struggle

Demand for our resources has steadily declined in line with China’s slowdown in growth. Australia is heavily dependent on the mining sector and this may have a more obvious impact on our economy in years to come. The mining sector somewhat shielded us from the full effect of the Global financial crisis, but it will be interesting to see how our economy goes over the next few years as the mining sector continues to wind down.


Interest rate Outlook

Today I just wanted to write quickly about interest rates and the current outlook.

Firstly, let us look at the current interest rate ‘yield curve’ for government bonds (government bonds are when you invest in government debt for a set rate of interest). If you are not familiar with ‘yield curves’, just Google the term and plenty of explanations are available. In the chart below, 2.25% is the current cash rate. The below chart also shows that investing in a 2 year bond would only pay 1.92% and investing in a 5 year bond is only paying 2.03%.

With a healthy yield curve, you would normally get more interest the longer you invest. But that’s not currently the case. The yield curve indicates that interest rates are expected to drop further before they start to go up again. This indicates a flat outlook for the current economy.



So what can we take out of this?

We are in a low interest rate environment and it will likely stay this way for some time to come. If you have a mortgage, both variable and fixed rates are attractive at the moment. However, just keep in mind that fixed rates will generally go up in anticipation of future interest rate rises. So it’s a personal preference to fix your rate, but sometimes it can still be beneficial to fix rates even when interest rates are expected to fall a little further.

If you’re thinking of taking out a loan to fund a motor vehicle or boat etc….just be wary that ‘yes’ interest rates are low….but you have to balance going into more debt against the risk of a fragile economy with increasing unemployment. The key message being not to ‘over commit yourself’.

If you rely on investing in term deposits to get income or grow your money, you may have to consider some alternative investments. The current cash rate return will barely keep your money growing inline with inflation.
Till next time

-Josh D

Disclaimer; Please keep in mind that this is general commentary and not to be taken as advice.

Travel more by using new Hotel alternatives

Most people love to travel and see the world, but cost can be a big factor in the amount of travelling we can do. A big part of cost can be your accommodation, as hotels can be quite expensive and you are normally forced to eat out due to a lack of self-catering facilities. Hotels are also generally a very expensive choice for families, who may be forced to pay exorbitant amounts for family rooms or have to pay for 2 rooms to meet hotel rules.

Websites like now offer a genuine alternative to staying in hotels and are growing in popularity. I have been waiting for a service like this for a long time, as I generally don’t enjoy staying in hotels. I prefer a more genuine experience of the places I visit and I enjoy doing the little things like grocery shopping and cooking in a foreign country.

This website lists all sorts of accommodation available from all over the world. You can find short term accommodation in a room in someone’s house, a city apartment, a suburban home or even a whole mansion.


I’m taking the family to the US in January and have booked most of my accommodation through the AirBNB site on recommendation from friends. It has cut my expected accommodation spend in half and I’m actually really looking forward to the places I’ve booked. I’m staying in a modern 100 square meter apartment in LA (refer pic above) that comfortably sleeps 6 and I’ve also booked a Victorian style townhouse in San Francisco that caters for a family nicely. The accommodation is clean and modern, offers much more space than a hotel, has full kitchen and laundry facilities and are in great locations.

To accommodate my family of 4 comfortably in Los Angeles in a decent 4 star hotel, I was looking at about $450 per night and San Francisco would have been over $500 per night…. Then you need to factor the cost of eating out. However, the average accommodation cost for this trip will only be about $250 per night using this hotel alternative.

So with the chance to grab more spacious home-style accommodation at half the cost, I’m in! It means we can travel for longer.

I’ll be sure to update you on my personal accommodation experience after the trip in January.

In the meantime, the link to AirBNB is below if you want to check it out.

Till next time

–          Josh D

Posted by Josh Dalton on November 27, 2014 | Permalink

A Good reason to become Wealthy

I wanted to share with you today some quick thoughts about ‘philanthropy’. I think that wanting to give back to the community and humanity in general is a great reason to aspire to wealth. When you become wealthy, your cup overflows…and you have an opportunity to do some real good.

I’m a huge fan of getting involved with charity at the ground level. One day when my wife and I were doing the tourist thing in Thailand, we decided to try something different and reach out to local charities. We were fortunate enough to make some great contacts and now I travel to Thailand annually to visit friends (who have become like family) and help out where I can. My last trip involved a drive out to the Thai Burma border, visiting ‘stateless’ families living in corn fields and the rubbish tip. It was a real eye opener and reminds you how lucky we are to be Australian citizens.

Fotor0103033437In my opinion, these sorts of trips are so much better than a typical tourist holiday……. When you really get to know people and see a different side of the country. It feels more authentic than the tourist experience.

I believe that everyone is interested in helping others….it’s really just about finding the cause you’re passionate about. I’ve found my passion in helping bright and talented students get a university education by providing direct scholarships in countries like Thailand. My mother grew up on a little island in the Philippines and never got past year 5 because of money….so this is a cause that’s close to my heart.

So as we plan to become wealthy, I ask everyone to think about what causes are most important to you and how you might like to give back in the future…..

Till next time

–          Josh D

Posted by Josh Dalton on October 30, 2014 | Permalink

Recent stock market falls


Recent stock market falls

As mentioned in my last email, stock markets can’t go up forever and I said we should expect a fall of some sort in the near future……and here it is! The Australian and Global sharemarkets have fallen between 5 -10% over the last month. Most forecasts also suggest things will be fairly choppy (up and down) over the next few years……

Remember, stock market investments offer a historical long term average return of about 10 percent per annum. However, those returns vary from year to year. 20% return one year, negative 10% the next and then maybe 5% the next year. The returns are all over the place, so that’s why we need to focus on a longer term timeframe to give shares a chance to perform.

Further falls in the stock markets give us an opportunity to buy quality shares at lower prices. There is also an opportunity to ‘Gear’ (borrow to invest) at safer levels for those of you that are interested in trying to give your Wealth Creation a boost. Most advisers will only recommend borrowing to invest in a strong share market, but the best time to do it is when prices are low (falling stock market).

So forget about the ups and downs of the sharemarket, ignore the news and remember… are building a portfolio of shares in high quality businesses for a long term investment. If that’s good enough for Warren Buffett it’s good enough for us!

Till next time

-Josh D

Posted by Josh Dalton on October 16, 2014 | Permalink

Stock Market crashes; Disaster or Opportunity?

Considering how friendly share market returns have been of late, it’s not a bad time to reflect on the events of 2008 with the GFC (Global financial crisis). It seems like everyone has a war story about the GFC….. ‘My neighbour lost all his super’, ‘my friend lost $100,000 etc etc….I’ve heard it all. I believe that a lot of people who got burnt badly in the GFC were done so by bad strategies or an incorrect spread of their investment assets. 

But do you ever wonder who actually made money in the big market falls?? One person’s loss is always another’s gain and believe you me there was big money to be made. When the stock market crashed, share prices got rediculously low. For example, you could have bought Commonwealth Bank shares for less than $25. They are now worth over $80. That’s more than tripling your money in a Blue chip investment in 5-6 years without counting the dividend income!



So there’s really 3 outcomes you could have had in the Global financial crisis for your share/ super portfolio.

1.      You freaked out and sold for a loss.
2.      You stood strong, held on to your investments and are now ahead again.
3.      You saw an opportunity to buy quality assets / add to your portfolio at very cheap prices and now your bank balance is thanking you. 

It’s easy to get caught up in the news and panic of a falling stock market, but keep in mind that thinking different to the crowd (having a contrarian view) can be very rewarding.

Till next time

– Josh D

When the money loses its shine

A couple of years ago I was in a cushy Bank job earning over $200,000 a year with a company car and assistant. The job was also in a beautiful location on Queensland’s Sunshine Coast. I couldn’t have asked for more. But something was missing….I did love the people I worked with, but I was bored and I hated the job. It felt meaningless.

For career driven and ambitious people, I think we all go through a phase when we’re really motivated by money. It’s the appeal of the lifestyle you could achieve and the things you can buy. When you achieve your monetary goal, it’s just like you imagined and life is great, however……..the money eventually loses it’s shine and we need something more to keep us going.


I believe that’s why I quit my cushy job and decided to start a business. Everyone needs a purpose and I wanted to build something meaningful for myself and my clients. Yes, it was very hard work at first, but now the business is gaining traction and I’m loving what I’m doing again. I feel so proud of what I’ve built so far and how much I’ve had to grow over the last 2 years. Eventually a good income will arrive again, but now it comes with a job that fills me with purpose and the satisfaction that I’m making a significant impact on the lives of my clients. It’s great!

So to those out there on a big income who are miserable in their careers. Start working on a game plan to initiate change (even if it may require some drastic moves, e.g. downsizing your home). Don’t spend your life going through the motions, do something you love. After all, money isn’t everything!

–  Josh D