89. How to increase returns without doing anything crazy
Notas del episodio
There are plenty of ways to chase higher investment returns. The problem is that most of them also come with more risk, more work, or both.
Dave and Hayden sort the sensible tweaks from the bigger bets, looking at ways investors might improve their long-term results without putting their whole FIRE plan on the line.
In this episode we'll discuss:
💸 Why quitting stock picking could actually improve your returns, and Hayden's two near-misses with Boeing and Qantas
💸 The brutal maths of individual stocks: a small number of huge winners drive much of the market's long-term return, which makes consistently picking them incredibly hard
💸 Why fees matter more as your portfolio grows, from expensive funds and advisers to the recurring costs hiding in your everyday budget
💸 The simple super tweak that could have an enormous impact over 40 years: matching your investment option to your time horizon and risk tolerance
💸 Debt recycling as an optimisation strategy: using money you were already planning to invest while gradually turning home-loan debt into deductible investment debt
💸 Tax efficiency beyond debt recycling, including asset ownership, income versus growth, super, and why your marginal tax rate can change the return you actually keep
💸 Why Dave and Hayden are comfortable holding relatively small cash buffers, and the trade-off between emergency cash and keeping more money invested
💸 The next level of risk: borrowing to invest, geared ETFs, and the questions to ask before adding leverage to your portfolio
💸 Hayden's argument for looking for a discount rather than simply asking what will grow fastest, plus Dave's case for paying attention to mean reversion in unloved markets
💸 Why thematic investing sits somewhere between index investing and stock picking, and why a convincing story about AI, healthcare or any other theme isn't the same thing as a guaranteed return
💸 The case for looking beyond traditional investments, from commercial property and private businesses to earning a profit share or commission by taking more responsibility at work
💸 Hayden's take on outsized returns: there are usually two paths — more effort or more speculation — and owning part of a business can give you more influence over the outcome than simply parking money in an asset
The thread through all of it: there are ways to squeeze more from your long-term plan, but extra return rarely comes free. Sometimes the opportunity is cutting costs or improving tax efficiency. Other times it means taking on more risk, effort or uncertainty. The important part is knowing which one you're accepting — and making sure the potential reward is worth it for you.
Questions, disagreements or your own scenario: [email protected] or reach out on socials at Strong Money Australia and Pearler.
Dave's books on Amazon and Spotify
Disclaimer:
Any advice is general and does not consider your financial situation needs, or objectives, so consider whether it's appropriate for you. You should also consider seeking professional advice before making any financial decision.
Pearler is an Authorised Representative 1281540 of Sanlam Private Wealth Pty Ltd AFSL 337927. Read the FSG available from https://pearler.com/financial-services-guide
Hosted on Acast. See acast.com/privacy for more information.
Todos los episodios de Aussie FIRE | Financial Independence Retire Early