Is it ever too early or too late to plan for your retirement?

Expert financial planner and chartered accountant, Claire Mackay, explains why it’s never too early or too late to start planning for your retirement. 

In this week’s episode, award winning financial planner and chartered accountant, Claire Mackay, explains why it’s never too early or too late to start planning for your retirement. Claire talks host Alex Whitlock through when, how and why you should start planning for financial success.

Joined by co-host Phillip Tarrant, Ms Mackay shares the invaluable lessons she’s learnt at the helm of her 23-year-old successful family business, a financial planning practice in Sydney’s north-west.

Get expert insight on:

• When you should start planning for your retirement

• Handy resources for managing your own investments

• How you can create a balanced retirement portfolio

You’ll hear all of this and much, much more on this episode of the Nest Egg podcast. Tune in now!

 

See the full transcript below:

Alex Whitlock: Welcome to Nest Egg. I'm your host, Alex Whitlock. Joining me today is an old friend and colleague, Phillip Tarrant. Phil, how are you going?

Phillip T: Good, man. How are you going?

Alex Whitlock: Not too bad at all. I thought it would be a good idea today to have a chat with a planner. Her job is to guide and advise her clients as to how to build a sustainable and a wealthy future. Joining me today is Claire Mackay, principal of Quantum Financial. Is it Mackay? Did I pronounce that correctly?

Claire Mackay: You have, indeed, Alex.

Alex Whitlock: Fantastic.

Claire Mackay: Awesome start.

Alex Whitlock: That's a good start. Claire, it'd be good for you, just to give us a bit of an overview about your business and perhaps, how you got into planning in the first place.

Claire Mackay: Certainly. I'm a principal advisor and director at Quantum Financial. We're a family business started by my father 23 years ago on our dining table, I've been involved ever since. I joined the business full-time after working both in text structuring and investment banking. I joined my brother. My brother and I are the principal advisors, we have a great team and fabulous clients.

Alex Whitlock: A true family business.

Claire Mackay: Absolutely, yeah.

Alex Whitlock: Claire, it'd be good to get an overview of what kind of clients do you tend to typically deal with in your business? What are the typical client and what's their background?

Claire Mackay: Sure. The typical client of mine has sorted the mortgage out, not stressing about the school fees for the kids.

Alex Whitlock: Sort of older demographic?

Claire Mackay: Yeah. Generally, 45 plus. We have some younger clients who, through inheritance or through selling a business are in that same situation, but the majority of my clients are a little bit older and they very much firmly focused on the dream retirement. We're focusing on putting them in the best position to be able to achieve all those dreams. When they are in retirement to celebrate all those wonderful successes of holidays, family weddings, and all the things that they've really wanted to do.

Alex Whitlock: I'm 50 years old this year, so I'm past the 45 mark. One of the reasons why I want to launch this particular publication is, I'm at a point in my life where I am thinking about structured investments. I own a business I've got with my business partner Phil. We've got quite a good property portfolio. Just to ask you, do you think 45 is the right time to start to think about building a retirement portfolio? I know that's when your clients come to you. Is that getting a little bit on the late side? What would you think about timing wise?

Claire Mackay: Well, it's never too early to start.

Alex Whitlock: Yeah, okay.

Claire Mackay: I've seen the children of my clients. The majority of my clients are business owners like yourselves. I've seen the children and grandchildren of my clients when they first finish university or first finish their trade qualification, and it's all about great habits starting early. Obviously, they have different goals to my clients, but they need to set their finances up so that they can have multiple successes well before they're 45. It's never too early to start. Having said that, it's never too late to start as well.

Alex Whitlock: No.

Claire Mackay: I've had clients come to me six months before retirement. Obviously, there's only so much I can do, but it's better to get planning and advise then than never.

Alex Whitlock: I'm always quite intrigued about whether people start late in life, early in life. I think people who are bought up around money, who are bought up around financial education, which I think is a lack of, by the way, but that's another podcast. People who bought up around... with money, typically, have the opportunity to start earlier but they don't always start earlier. Whereas, people who might come from a different background and money isn't part of the kitchen table conversations might start later in life and an event happens for them to be able to go, "Hang on a second. I'd start thinking about my future." Irrespective to that, what is the commonality, the one or two things that you feel that when people start thinking about financial loss in the future that they have that makes them a better investor or a little bit more proactive in terms of investment?

Claire Mackay: Regardless of the age, it is the mentality that they certainly know that money is a means to an end. If they don't start managing their money just like they manage their career and their household, that they're not going to necessarily be able to achieve the things that they really want. Like I said, what makes a great client or a person who has control of their money is actually thinking about, "Well, what is it that I really wanted to achieve." Some people work and they have a passion and that's great. A lot of people just have it a job but the truth is, we all deal with money. We've been dealing with money since we had our paper runs when we were kids. What sets people apart is, "What do they do with that?" If they spend it all, that's great but what happens to the rainy day, what happens when you no longer want to work?

It's very much that mentality of, "I've got a good position now, but I want an even better position going forward and I'm prepared to make some touch decisions and establish some strategies that were going to get me there closer."

Phillip T: Is it- Sorry Alex. Is that normally like- I don't know if you swear on podcasts. But is it normally an "Oh shit." Moment, as in some life events happen, which has shaken someone up to actually start thinking about their future? Is that typically catalyst?

Claire Mackay: Absolutely. The typical one is July one, and January one, so we all make great resolutions. The question is on one February or one August have we actually done something about those resolutions? So, obviously that's when a lot of people are looking at their fitness, their finance and their happiness. The other thing is, when they see something happen to someone they care about. So, they're seeing a family member who is not necessarily having the last early retirement that they hope for themselves, or a colleague is stressing about things, or they come into a win-full gain, so if they're in inheritance, which is an unfortunate situation where someone's passed away, but you also recognise that you've been given a great opportunity.

Similarly, selling a business and saying "Well, I've worked hard all these years, how do I set myself and my family up for the future?" There is definitely those trigger moments. There's also that idea of turning certain ages, so 40 is another one, 50 is another one, 55. All those milestone birthdays, I think every birthday is a milestone, but those big ones certainly get people thinking. They also get people thinking about "Well, what does the rest of my life look like? And do I have the finances to be able to continue the life that I've got?"

Alex Whitlock: Going back to when I was in Hong Kong, and I ran a publication over there focusing on investment, dealt with the fund managers over there. I'm going back more than 20 years ago now, but the fund managers were then wrangling with how to market their funds, because their research that people are fundamentally put off by the term 'investing', I think for most people, investing is quite a frightening concept. I think people can tend to put off investing money, I think people in the old days liked to save, I think it was a bit of a belief that superannuation will see you through, so i think possibly people get put off by the notion of investing. Property is quite tangible, but I think, going beyond that, it's a bit daunting and that sometimes puts people off.

So when you get you're- just a scenario of the 45-year-old client, for people who are not financially astute and don't have confidence in terms of investments, how do you broach that with them, and how do you provide advice?

Claire Mackay: The first thing I always do is work out why they're having the conversation.

Alex Whitlock: Yeah.

Claire Mackay: Secondly, what they're trying to achieve. Oftentimes I'll sit down with- I did this the other day, I sat down with a gentleman who was managing their family finances, and was a bit nervous about some of the superannuation changes. When we walked through it, I was like "You know what, you can do this on your own, you're a smart cookie, have confidence, back yourself, there's great sources of free information that you can use, and what you're planning to do is not on the edge, it's bread and butter stuff, you've got the skills and the time." For a lot of clients, they don't have the time and they don't have the confidence.

Alex Whitlock: Okay.

Claire Mackay: The first thing is working out where they're at, if they have the budgeting down-pat that's brilliant. But for a lot of people, that's literally the first step. No matter how old you are, no matter how wealthy you are, knowing how much you spend and how much therefore you're saving, to therefore be able to invest, is absolutely critical.

Alex Whitlock: So, budgeting. Having tight control of your cash flow?

Claire Mackay: Now, I've got a lot of engineer clients, so they have spreadsheets going back 30 years, and they know to the cent where everything's spent. Most people are not like that.

Alex Whitlock: My Grandmother had a ledger, an old fashioned leather-bound ledger and she wrote every single transaction, every single cheque, number, everything went in, that was it. 

Claire Mackay: Our grandparents knew this, your Grandmother maybe didn't work outside the home, but she managed that household budget.

Alex Whitlock: Oh she did.

Claire Mackay: Yeah. There's a lot of things that we think "Oh, that's old hat." But those basic things that are absolutely critical, I look at my really successful wealthy retiree clients, they all know where their money goes.

Phillip T: Yeah. I can often get quite cynical around financial advisors, I deal a lot with property investors, and the property investors that I speak to all the time they love it, so property going through their veins. When I've asked them about investing outside of property, you never really heard good stories, you always hear negative stories...

Alex Whitlock: We're not saying there aren't good stories out there, but in term of 

Phillip T: You typically hear the negative stories, so if people go out and ... Look, Nestegg is about discussing the value in creating a healthy future retirement through good money management, that's what we're all about. You normally hear the negative stories when you ask anyone about, "How did you go-" 

You hear about the bad things all the time, yes I was told to invest in X just before the... you only hear the bad stories right? Is there mainly good stories when it comes to- people have been proactive in terms of taking control of their financial future, there's mainly good stories right? You only hear the bad stories.

Claire Mackay: Absolutely. You guys are in publishing, and if it bleeds, it leads.

Phillip T: Yeah.

Claire Mackay: The other thing is, that property, particularly in the Australian psyche is very much tangible, the aspiration to own your own home.

Phillip T: It's in the blood, here you go to any barbecue, whether you're a property investor or not, it's the topic of every conversation.

Claire Mackay: Whereas, I'm an investor.

Phillip T: Mm-hmm (affirmative).

Claire Mackay: I don't care whether it's an apartment with blue walls, or whether it's a share in a blue chip.

Phillip T: Yep.

Claire Mackay: What I'm looking at is the numbers. What I'm looking at is "How does this fit into a diversified portfolio to manage risk for my clients, to get not an arbitrary return, but rather a return that my client needs to pay the bills?"

Phillip T: Okay.

Claire Mackay: To have the dream, not just pay the bills, but to actually have the dream.

Alex Whitlock: You're an advocate of a balanced portfolio.

Claire Mackay: Absolutely.

Alex Whitlock: Some investors will want to- So, Phil for example, myself and Phil, we're property so we're very narrowly invested, but perhaps give us sort of a view of ... Unless you've got to pick a demographic, say for somebody 45, kids are growing up, maybe they're going to university soon, what kind of balance- and maybe they're looking to work until retirement age, what kind of balance do you look to give people of that demographic?

Claire Mackay: That comes down to asset allocation.

Alex Whitlock: Okay.

Claire Mackay: If they've already got existing investments into property, then obviously we need to manage that, and how much in debt they're already exposed to. They key thing from my perspective is, is it a lifestyle asset? Is it a property that your kids might live in when they're at uni? Or is it "I don't really care, it's all about the money."

Alex Whitlock: Yep.

Claire Mackay: Yep. Then it comes down to- you said Phil earlier, about you only hear the bad stories, it's just a bit like a gamble, you only hear their good stories.

Alex Whitlock: Yeah.

Claire Mackay: Investing is actually... I'd say, should actually not be exciting. I get excited about it, because that's my passion, but to my clients that's not the exciting part. The exciting part isn't X Y Z investment, or this share, or that share. It's "We're going to Italy for three months." That's the exciting thing.

Alex Whitlock: Yes.

Claire Mackay: Because, that's what the investment-

Alex Whitlock: The enabler.

Claire Mackay: Be it property, or be it shares, or be it... whatever it is, your bonds, your cash, that is what is going to fund that. Of course, constructing the portfolios and the balance around that, that's where I get really excited, and my clients start to say "Claire, settle down, we're glad you're passionate about it."

Phillip T: I'm quite intrigued, about what actually you get excited about? Is it the fact that you can create something which is going to deliver greater income for someone? Is that the excitement?

Claire Mackay: Absolutely. There's one thing, there the intellectual thing around the different factors that influence movements and investments.

Phillip T: Mm-hmm (affirmative).

Claire Mackay: At the moment we're living in challenging and exciting times, and there's always a downside, but there's always opportunities as well. Looking for that, and constructing an investment theme and thesis to take to my clients, I find that fascinating.

Phillip T: Yep.

Claire Mackay: Most of my clients say "Great, Claire, we're glad you're excited about it because we don't care."

The second part is then seeing how we can then create that out-performance for our clients to achieve what they want to achieve. On our bordering wall we have the photos of the wonderful holidays in Italy, we have the photos of the grandchildren all being taken away on a holiday with their family, or the sold sign on the big family home for the downsides. We have photos to celebrate a success. It's not just the intellectual exercise, it's real people and it's their futures.

Alex Whitlock: How often Claire, when you get clients that come along and see you, and high net worth, people who have good incomes, stable jobs and so forth, maybe business owners, how often do you find that, perhaps a little bit of a shock, that when they come and sit down that they're not on track right now, to be where they think they ought to be. Is that something that's common?

Claire Mackay: For some it is. For some it's ... we know we're on a good wicket, and we're just not making the most of it.

Alex Whitlock: Yeah.

Claire Mackay: There's a bit of tough love involved there.

Alex Whitlock: Okay.

Claire Mackay: There's a bit of, "Look it's not my money, I'm never going to tell you to switch off and stop doing certain things that you're passionate about. But if this is what you want, and this is what you're spending now, somethings got to give."

Alex Whitlock: Yes.

Claire Mackay: I've learnt really early on, from my very first client, never tell a client what they can and can't spend their money on.

Alex Whitlock: Yes.

Claire Mackay: The second thing is, though a lot of my clients have been managing it themselves for many years. 

Alex Whitlock: These are people who are reasonably financially astute.

Claire Mackay: Absolutely, and they're either in their day job are doing it, so they're translating those skills across, or they're just interested and organised, but they become time-poor.

Alex Whitlock: Okay.

Claire Mackay: Other things are more interesting to them. They're looking for someone to partner with them and delegate, so that they're still making the decisions, as all my clients are.

Alex Whitlock: Okay

Claire Mackay: But, they don't have to worry about the paperwork, and the admin.

Alex Whitlock: They've got some advice as well to help them along the way.

Claire Mackay: Exactly.

Phillip T: In terms of planning for long term financial good health, we're very pro-advice, we think advice is cool.

Alex Whitlock: Yeah we do. We take advice on all of our property investments, we don't pick the properties ourselves, we use a buyer's agent.

Phillip T: We're pro-advice for a whole bunch of reasons. For people who wanted DIY, who want to do it their self, I think these days a lot of people feel empowered by having... for a lot of people that's probably the one part in their life where they actually get to make some true decisions about dictating how they grow.

for people who don't want to use advice, and people that want to go about doing it themselves, I imagine they could probably apply exactly the same methodology or rigour as what a accomplished financial planner would do to creating long term wealth. So... what do I need to do, what are the steps I need to take to say "This is what I want to achieve, and this is how I want to achieve it." Is there any step system that they could employ or engage?

Claire Mackay: I think that it comes down to being organised.

Phillip T: Mm-hmm (affirmative).

Claire Mackay: We're all capable of cleaning our own home, but a lot of us delegate that.

Phillip T: Yeah.

Claire Mackay: Yep. If you're going to- and you do it every week. If you're going to look after your own finances, you have to put that same structure around it.

Phillip T: Okay.

Claire Mackay: For a lot of my clients, it's "I have the structure, I have the plan, I have the ideas, I don't have the conviction to implement, or I don't have the conviction to sell." It's that dispassionate- you have to look at it again. It's not "I don't care if it's a property in a nice suburb with blue walls, or it's a blue chip." What I'm looking at are the numbers and how does this work, and how does it work together.

I say to everyone, you earn the money, you work hard for the money, at least know what your money is doing. If you get to a point where you don't feel confident then seek advice. For a lot of people, engaging with an advisor, if you have more knowledge, you actually enjoy the process more.

Phillip T: Yeah.

Claire Mackay: The comments you made earlier about the distrust of advice, is because you cannot blindly trust your advisor, you're ultimately- [crosstalk 00:16:06]

Alex Whitlock: If you're taking ownership, and your clients have already ... you made the point, they are now time-poor, but they know what they're doing. I think these are people that know where they're going, and advice is just a support to something they've already started to build.

Claire Mackay: I also think it's a bit like, you're the CEO and your advisor is your CFO. You're still being paid to make the decisions because it's your money.

Alex Whitlock: Yes.

Claire Mackay: A good advisor will never let you abdicate that responsibility.

Alex Whitlock: Okay.

Claire Mackay: A good advisor is saying "I care about your family, I care about your future, but no one cares about you more than yourself." Yeah?

Phillip T: Is there any ways you can be smarter as a investor, so are some investments easier than other investments, and I'll frame that with property versus blue chip shares. If I'm a property investor, I've got a whole bunch of tools, realestate.com for example, where I can look at what properties are worth, I can benchmark, I can do like for like, I know what stuff is selling for, I know how much debt it's going to cost me to hold a property, etc... would get it in some way, because we spoke about property being in blood. If I compare that to investing in shares, id say blue chips, do I need to be able to read a balance sheet, a profit loss and all that sort of stuff to be a good investor in equities? Does that make it harder or more limited to some investors versus property which is perceived to be more easy and more accessible?

Claire Mackay: I think there's a couple of questions in that, so I'll focus on a few of them.

Phillip T: Yeah.

Claire Mackay: One is, whatever the investment is, knowing what the strategy is for holding that investment, what is its purpose in the portfolio, and the exit strategy.

Phillip T: Yeah.

Claire Mackay: There are a lot of investments out there that are easy to get into, but how do you get out of them?

Phillip T: Yeah.

Claire Mackay: When it comes to equities, we through the GFC, and prior to the GFC, we have a lot of structured finance, which is what I used to do before I joined the family business. I don't touch them with a bargepole, and I can actually understand them.

Phillip T: Mm-hmm (affirmative).

Claire Mackay: So, if you don't actually understand it, or your advisor can't explain it to you in a way that you understand the investment, walk away.

Phillip T: Don't touch it.

Claire Mackay: If you're working with an advisor, you don't have to pull out all the reports, but you expect your advisor to do so. If you're doing it on your own, then there are exactly the same types of websites available for investments. I always send young people, who are interested in investing, I always send them to their own Superfund, because there's great information there, the big Superfund's have that. Websites like Vanguard, i-shares, these are big american companies that, they're not trying to sell you something, [crosstalk 00:18:36] they've got a lot of information. The other website I always send people to is moneysmart.gov.au that's the government financial literacy website, which has got a wealth of information and calculators, and again, it's not trying to sell you something.

Phillip T: What about if I'm paying for long-term growth, and Nestegg, we encourage people to build, we discuss it at length, but how diversified does your portfolio need to be? So going back to your... if you can't understand it, don't touch it, and I completely agree with that. When do you start throwing in some antique cars or some...

Alex Whitlock: Big coins, get some big coins in there.

Phillip T: This is going to be a throwaway remark, but what percentage of people should actually, that would apply to, most people would just ... equities, property, fixed income, should just narrow your focus, because that's going to give you more than enough exposure to a diversified asset class, to achieve what you want to achieve, do you need to step outside that?

Claire Mackay: Well, there's a lot of interesting and exotic investments out there, when clients come to me with those sort of ones, particularly in the start up space as well, I say look, it might be a winner, it might not. Be prepared to lose all that money. How much are you prepared to put in? It's a punt. The other idea is that in our investment philosophy, we're big fans of exchange trade and funds, or following the index.

Phillip T: Okay.

Claire Mackay: And blending different-

Phillip T: Can you just explain that a bit, because I think some of our audience are a little bit confused about [inaudible 00:19:57].

Claire Mackay: Sure, so you can go and buy Westpac, NAB, A and Z, the four banks and some other financials, and you've got the financial sector in Australia, which is a big part of our stock market. You could instead, go and buy a financials ETF. So exchange, trade and fund. So it's a fund that's listed on the Australian stock exchange, and it goes and buys all the financials for you. So instead of having-

Phillip T: Shares on all of them individually.

Claire Mackay: Exactly, you just have one investment.

Phillip T: Yeah.

Claire Mackay: There's an index. The index is the Australian financials. The index could be the Australian top 20, the Australian top 50, the Australian 200, small shares, it could be resources. You can slice and dice it. [crosstalk 00:20:39] Exactly. You can do that both in Australian, with property as well, or you can go internationally as well.

Phillip T: Yeah.

Claire Mackay: It's a low cost investment which is listed, so subject to who's providing it, not all ETF's are the same. Who is the issuer of the exchange, trade and fund, and again we try to stick to the major players, because if you want to sell it there has to be a market for it, just like any other investment. By slicing and dicing different indexes, you can then look to have out-performance in certain ones at low cost core, then you can turn around and say I'm going to put 20 grand in some punt.

Phillip T: Hmm.

Claire Mackay: Knowing that the majority of your portfolio is working hard but nothing flash and it's doing what it should do, so you can take a little bit of fun- 

Phillip T: It's okay to have fun as an investor right? It's not all ... 

Claire Mackay: Well again, that 20,000 dollar start up could end up being brilliant.

Phillip T: Yeah.

Claire Mackay: You don't know. And again, a lot of my clients, through their own networks and contacts, have investments in those sort of things. They also recognise that for every start up that does well, there's a lot that don't.

Phillip T: Hm. It's  matching your appetite for risk as well, and I think understanding when you're investing into small caps, for example, understanding what the risks are around that, I think having that balance of "I understand and I'm prepared to take it on, or I might decide I'm going to put 10% of my investible money into that and we'll see how it goes, if it's gone, it's 10% I can afford to lose."

Claire Mackay: That's what a lot of my clients do, they say to me "Look, you're looking after the family wealth, that's going to start for us and our children, and our grandchildren, that's the generational wealth fund. I'm going to have a bit of a play on the side."

Phillip T: Yeah.

Claire Mackay: Sometimes they'll tell me about it, and sometimes they won't. That's fine, because we've allocated the risk, and we know that they can still pay all the bills, for now and in the future.

Phillip T: How much investible assets do you need to have to make it worthwhile to look towards more formal financial advice, like someone like yourself, rather than thinking that you can do it yourself? Is there a magic number?

Claire Mackay: There's certainly been a decrease in the barrier to entry, with things like exchange trade and fund, so you yourself can go on and buy the top 200-

Phillip T: You can do it direct now.

Claire Mackay: Directly now, with online broker accounts, there are lots of low cost broker accounts out there. It comes down to your assets, so it becomes worthwhile, but also it comes down to your philosophy. I've had people that I've met who on paper look like they would be a great client, but then when we chat they're not prepared to delegate. They want to do it themselves, and that's fine. It's a combination, so different clients- different advisors rather, have different levels of where it makes sense. We don't have an asset minimum level, what we have is a minimum fee. It's up to clients to decide whether that fee is valued to them.

Phillip T: If someone comes and sees you, you say I'm happy to help you out, and we will achieve this, but it's going to cost you this much money.

Claire Mackay: Absolutely.

Phillip T: Most people go "That's good, I'm happy to pay."

Claire Mackay: Absolutely, because given all that you mentioned earlier about concerns around the quality of advice and concerns around the failures, and the common theme that's been surrounding those major financial failures has been in bedded fees that encourage people to invest. You're only going to be paid as an advisor if you encourage a client to invest, then naturally you're always going to encourage them to invest, and that may or may not be the right thing for them.

I've got clients where we've been structuring the sale of their business and repositioning how they do that, I've had clients where it's "You know what, let's pay down the mortgage in a years time." They paid for that advice, they didn't know what they needed to do, they were doing all sorts of things and we consolidated, simplified, focused on the key things that are going to drive their wealth.

Phillip T: Looking at financial advice, what sort of questions do you need to ask a financial advisor, or some other finance manager to make sure that you have the confidence and clarity that you know that they've got your best interests in mind.

Claire Mackay: The key thing is how are they paid? Who pays them? All my clients get sent an invoice and I ask them to pay it. They know who's paying their bill and they know exactly how much I'm going to be paid for servicing them. Who pays the bill? How much is it? That should be upfront, that shouldn't be three or four meetings into the relationship.

The second thing is the investment philosophy. Do you have an alignment in investment philosophy? If you're looking for someone who's going to every week send you brokers style advice, so buy this, sell that, then look for that advisor. I'm not that sort of advisor.

Phillip T: Right, okay, yeah.

Claire Mackay: That's fine, if you're looking for someone who is going to get you into some more of the exotic investments, that's great, but again-

Phillip T: Those guys are out there.

Claire Mackay: Those guys are out there, I'm not that person and that's fine as well. Working out your investment philosophy is similar. Our rule is: Do we enjoy working with you? Will we have fun working together because, through the good times it's all great. When things go wrong, when things in your own family happen, that's when I've had clients write me an email saying "I can't deal with it." Because of health, their family, their jobs, their work. That's when you know you can trust the person to look after you, because you have confidence that up until that time they've done everything in your best interest, and when you need to quite rightly put your energy, time and effort into other aspects of your life, you know they've got your back.

Phillip T: Looking at macro and micro economic forces right now, whether it's global factors or domestic, I know the answer to your question is going to be "It depends." But a little bit of secret sauce for our listeners, is there anything that you particularly like at the moment as an asset class? Is there anything that our listeners should be at least having a look at, over the next 12 months, is there anything which should be part of a diversified portfolio?

Alex Whitlock: That answer is going to be "It depends on what your goals are."

Claire Mackay: You guys already know my answers.

Phillip T: You know what I mean, is there anything good at the moment?

Claire Mackay: There's lots of good things. We write a report every January and July, we've actually just released it this week, it's our investing insights, it's our views around the next six to 12 months. We try to write it trump-free, which obviously you can't, but there are opportunities out there. I think the key thing is that there is a lot of noise. There is a lot of information, and if you invest based on this weeks' news, you're always going to be lagging.

Phillip T: Yeah.

Claire Mackay: It's about having a clear plan. We're still in Australian equities, we're still in US equities, we're still in property, for the defensive component we're still in your fixed income, not withstanding our terribly low interest rates.

Phillip T: Yeah.

Claire Mackay: You can't ignore any one asset class, ever. It's whether you have an over waiting or not, depending on what's happening. That's exactly what we're doing with our clients right now.

Phillip T: What's the length of view that you want to take on a particular asset class, have you taken a three year view or a five year view, or a six month view? It's going to depend on what your out is.

Claire Mackay: Exactly. Going back to that discussion of getting into an investment is always easy, but what's your exit strategy? What's the timeframe that you've got?

Phillip T: You're right about the news, the news changes on a daily basis, forecasts change and you can make a decision today based on the information you've had, and then a week later it's all changed. I think knowing what the fundamentals are of that particular asset class, and knowing in the long run, medium term when you want to get out, or if it's a short term, if you're looking at doing something for the next week.

Claire Mackay: Also, knowing that this time last year we'd had the worst start to any calendar year, ever. One of the European banks said "Get out of everything."

Phillip T: Yeah.

Claire Mackay: Then, 12 months down the track, 31 December, the returns were pretty damn good if you had a plan around your investment. If you're constantly reacting to the news, A) you're going to lose your hair or go grey, and B) the results won't show.

Phillip T: A lot on the market is sentiment driven, and the media's got a lot to be responsible for.

Claire Mackay: I wouldn't say that about you guys. 

Phillip T: Quick question for you, if you're going to recommend one book for anyone to read, looking to better manage their financial future, what would it be?

Claire Mackay: Wow, that's a good one.

Phillip T: Yeah.

Claire Mackay: One book.

Phillip T: One book.

You know what, or a resource, let's be modern.

Claire Mackay: Well if you're going to be-

Phillip T: Apart from Nestegg.

Claire Mackay: Apart from Nestegg, obviously. If you're going to be about managing your own finances, if you haven't got the basics, moneysmart.gov is a great place to go. If you want to know more about the financial world and know the jargon, then I always recommend our lecturer at university, and I recommend to the third year applied finance students that they always read anything Michael Lewis writes.

Phillip T: Okay.

Claire Mackay: He's ex financial services himself, and he has the ability to translate into things that we understand. He wrote The Big Short. He's a great communicator of financial, and that's the macro issues. When it comes to your own finances there's a lot of great resources out there. I mean, I'm a finance professional, so I'd always say anything written by Jack Bogle, or I'd say to my clients we read it, I'd like them to read it, every year Warren Buffett's letter to his investors is something that we recommend students read. It depends on how intense you want to get with managing and understanding your own finances. Obviously, Nestegg is a great place to start if you're starting out. Then there will be lots of rabbit holes that you can go down the more you want to know.

Alex Whitlock: Keep learning, keep informed.

Claire Mackay: Absolutely, yeah.

Alex Whitlock: Claire, it's been a pleasure talking to you, thank you so much for taking the time to join us.

Claire Mackay: Thank you.

Alex Whitlock: Phil, always good to see you.

Phillip T: Yeah, good thanks for having me.

Alex Whitlock: Thanks for listening in. Don't forget to check us out on nestegg.com.au, site is packed full of news, information... are going to help you build wealth, create wealth and manage your wealth better.

You can also connect with us on all the usual social media, and if you'd like to get in contact, if you've got any questions please don't hesitate to contact me, Alex Whitlock, you can reach me at This email address is being protected from spambots. You need JavaScript enabled to view it.

Thanks for listening, and we'll see you next week.

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