For many years now, my ‘go to’ present for my wife’s birthday has been a cookbook. As far as I am concerned, cookbooks tick all the boxes. They are simple to find and sold almost everywhere. They’re easy for me to wrap. They can be both expensive or inexpensive, depending on the occasion and my budget. And lastly, they might have been a gift for her, but I was also going to be a beneficiary when it was put to use. Recently however, it occurred to me that perhaps my fondness for cookbooks as gifts may have reached its limits. This came to mind as I happened to be looking at the entire bookcase of cookbooks which we have in our kitchen. It seemed hard to believe that there was a cookbook published in Australia which we did not own. Jamie Oliver’s 30 Minute Meals, Maggie Beer’s Summer Harvest, Luke Nguyen’s Songs of Sapa, and even Pete Evan’s weird paleo caveman diet book. We have them all.

What is interesting though, is that even with this veritable library of recipes on hand, there’s probably only about ten meals we tend to cycle through with regular predictability. They’re all the usual suspects: spaghetti bolognese, roast chicken, various forms of stir-frys, bbqs and the odd casserole. Nine times out of ten, dinner comes from one of those meals on that list. Yet mere feet away sits a treasure trove of carefully designed and worded recipes. Why weren’t we having mustard chicken with seasonal greens, dauphinoise and a black forest affogato? The reason of course, is that in the real world, nobody has the time to make those sorts of meals on a regular basis. Having a recipe book is one thing, having the required time, desire and skill is another. There are some obvious similarities with the investment process. You can buy many books on investing. If you’d prefer not to spend any money, the internet provides plenty of free investment ‘advice’. But do you have the time, desire and skill to be looking after your own retirement? Navigating the murky waters of global financial markets? Weighing up the relative strengths and merits of literally thousands of investment alternatives? For some people, it’s a resounding yes, but for most of us such an approach is either too boring, or worse, too risky. For it’s one thing to pull out the recipe book and make an absolute mess of the croque en bouche – your family may laugh, but it’s unlikely to end up with you losing your house. The same mistake, however, with your savings or superannuation, could have very severe implications. No need for fancy cookbooks when all you can afford is bread and potatoes.

This article, by Justin Baiocchi, was originally published in The Northern Daily Leader on 29 July 2017.

We recently became the proud owners of three kittens. It was one of those situations where the kittens needed a new home as a matter of life or death, so they ended up with us. The kids, of course, are thrilled with the new family members and now spend their days hunting them down and trying to force them to fall asleep on their laps. The kittens, being a little wild, respond with scratches and bites, a tactic which has little effect on the overly-affectionate children. Not wanting to spend an hour de-furring myself prior to work each day, I gave strict instructions that the kittens were to be restricted to the boot room, where all the mess could be easily contained. At least, that was the plan. By day three they had extended their territory to the kitchen, by day four they were making themselves comfortable on the lounge sofa and by the end of the first week I was having to move the kittens off my pillow when I went to bed.

If the kittens were a military operation, it would have been called mission creep. If they had been a software project, it would have been called feature creep and if they were a tax, it would have been called bracket creep. Which is a nice little segue into a quick discussion of bracket creep, which of course is little more than a tax hike by stealth. Governments know that income tax revenue can be counted on to increase over time as workers’ wages simply keep pace with inflation. Left unchecked, eventually the entire populace ends up on the highest marginal tax rate – a disincentive to hard work if there was ever one. That said, making investment decisions solely on the basis of the tax outcome should also be avoided. Aggressive tax minimisation schemes, such as the plantation schemes of last decade, often resulted in people spending $1.50 in order to save $1.00. That is not a strategy which leads to wealth creation. Too often however, we see people making an investment decision based on a desire to pay less tax. There is of course, one foolproof method to paying less tax: make less money! Or even worse, lose all your money. Making sound investment decisions should be your first priority; the tax implications are an important, but secondary consideration.

Naturally, not every decision needs to make sound financial sense. Adopting three kittens comes with paying for three sets of vaccinations and three visits to the vet to prevent our three kittens becoming thirty kittens. Perhaps becoming a veterinarian would have been the soundest financial decision of all.

This article, by Michelle Higgerson, was originally published in The Northern Daily Leader on 3 June 2023.

I caved into the pressure of Channel 9 programmers and have found myself watching their program ‘The Summit’. Not just watching it, but thoroughly enjoying it too. For those not in the know, the basic premise of the show is a challenge where 14 people attempt to ascend a mountain within 14 days. If they reach the summit on time, they each share in the prize winnings of $1 million, but if they don’t, they go home empty handed. Along the way not only do they have to complete tasks that are physically and mentally challenging, along with braving the harshest of elements, they must also survive the personalities and scheming of their fellow trekkers. The show is a fascinating study in group dynamics, and the pursuit for fast wealth.

As I watch the trekkers all undertake their climb up the mountain, in the snow, wet from crossing waterways, and sleeping on the bare ground, I often find myself thinking that there are easier ways to make money. Yet funnily enough, the process is not too different to how many people choose to pursue their wealth creation journey, by engaging with a financial adviser or investment professional. This person is similar to the mythical Mountain Keeper character on the show, the person who oversees the progression, knows what it takes to succeed, and provides guidance on how to achieve the end-goal. The checkpoints that the contestants reach, whereby they review their progress, and discuss any changes that need to be made to their strategy, also where they remove the weaker contestants from the group, can be thought of as review meetings with your adviser. This is where a review of your progress towards your stated goal takes place, including potentially a decision to change the line-up of investments you hold (perhaps removing those investments thought to perform weaker moving forward, and hanging onto those that are stronger). Together, these two factors should help you make you way to the summit, or your financial goal. However, the main point of difference between entertainment television and a real-life financial advice relationship is the timeline; in no scenario will you be able to make $1 million in 14 days, or even a large share of it (unless of course you start with $1 million). If your adviser is telling you this is possible, you need to run for another hill. Creating wealth takes a long time, and if you aren’t prepared to play for this amount of time, you need to reassess your goals. That is, of course, unless you’d prefer to climb 2,500 metres upwards, risking your life all while carrying a heavy backpack of essentials. In my opinion, it is more entertaining watching other people do that.

This article, by Justin Baiocchi, was originally published in The Northern Daily Leader on 15 July 2017.

They say that life is a journey of learning. Even American Civil War general Robert E. Lee rather sternly said that “The education of a man is never completed until he dies.” In that regard, I have learned much in recent years. I have learned that small children, milkshakes and windy back roads are not a good combination. I have learned never to stick my finger in a candyfloss machine again. I have learned that any item of furniture which is cream, bone, white, off-white, ivory or beige, should not be purchased until all your children are at least 20 years old. I have learned that a small fire intended to burn some long weedy grass, can quickly become a much larger fire which can threaten to burn down the entire district (though to be fair, this is really something my wife learned – I warned her that it was going to happen). During the same incident I also learned that, when there is nothing else at hand, a $150 sweater makes a fine tool for beating down rapidly spreading flames. A wet piece of sack cloth may well have been cheaper and more appropriate, but I probably wouldn’t have looked quite as sophisticated as I ran around in a panic, trying to prevent all of Northern NSW from going up in flames.

Over the years I have also learned a lot from managing investments and watching markets. One crucial lesson which I learned a long time ago, is to pay careful attention whenever I hear the words “This time’s it’s different.” It’s usually said in tandem with statements like: “Of course the stock market will keep going up, this time it’s different”. Or it might be “Of course house prices won’t fall, this time it’s different”. Newsflash: none of it is ever different. We’ve seen it all before. The hype, the mania, the greed, the bubbles and the delusions. The belief that this share, or this property, or this commodity, is going to go up indefinitely. That it’s not going to end like it did before. Or the time before that; or the time before the time before that. Don’t believe it. Whatever the hype, fad or mania, it will end. Your job is to ensure you see it for what it is, rather than to blindly follow. It can be difficult of course, to be the naysayer or the one who refuses to be carried away by the promise and the excitement. Don’t worry about that. Like a man wearing an expensive sweater to a bush fire, your time in the sun will come.