Marcus Tells It Like It Is – Super, Shares & Settling Down

 

Should Parents Push Their Kids Into the Market?

Audience question: What would you say to parents pushing their kids to ‘get into the market’ now?

I think kids need to make their own minds up rather than their parents.

There are a lot of — this is probably the wrong thing to say — there are a lot of well-meaning parents, but also a lot of ignorant parents around. It’s not necessarily the right thing to do — especially if they are natural gamblers and they’re telling you to have a punt on a lithium stock. That’s bad advice.

So make your own minds up whether you want to be in the stock market or not.

 

Is Super a Better Long-Term Builder Than Property?

Audience question: Can superannuation really replace property as a long-term wealth builder?

Well, it’s not replacing property. It is another structure that is a long-term wealth builder.

It’s not one or the other.

And I think younger people have got a much longer run-up on super. There will come a time — in the 2030s — where everyone will look back and go, “Well, my retirement’s sorted, because I’ve got 3 million,” or whatever it is, in super. Because you guys — some of you younger people — have a much longer run-up than the rest of us.

It only started in 1991 and only turned up in 1995. I was paid on commission half the time, so I didn’t have to pay 12% on that. Anyway, I have inadequate super compared to what you will have, as you’ve got a 30–40 year run-up.

So you really should use that.

Australia is quite unique in the trillions that have been shuffled away into super. Our savings are fantastic. Use super. It’s a forced savings as well as a bit of a tax break.

Will it replace property? I think it’s probably better than property. And if you can’t make up your maximum contribution every year — ask your grandparents or your parents to give you some money every year. Chop it up.

And if you are a grandparent, stick some money in your kid’s super. Well, they can’t touch it till they’re 60, so they may be irresponsible now, but they’ll be okay by the time they get their hands on it.

 

Is Buying With a Partner Smart or Risky?

Audience question: What’s your view on buying with a partner — is it smart or risky to do that early?

No — you should really do it on your own. It gets legally complicated.

You may have a utopian view of you and your partner owning a house and that sort of thing. Fine. Absolutely fine. But I wouldn’t be doing investment properties with a partner. Because, by definition, you’re probably younger. You probably aren’t settling down forever. So do it on your own.

If parents are trying to contribute to your property — pay your deposit — it gets very complicated legally, because the last thing a parent wants to do is give some money to their kid to buy a property, and somebody then moves in with them and wants half of what the parents put in.

So there are legal structures for this. Be smart.

I would say, if you don’t have to buy with a partner — don’t buy with a partner.

 

Starting With $5,000 – What Should You Do?

Audience question: If I’m just starting out with $5,000, where would you suggest I begin?

I would suggest you begin by keeping it in your bank account — not investing it.

If you’ve got $5,000 and you think that’s a lot of money, you haven’t got a lot of money. So keep it.

Your job is not to lose it. Your job is not to make money out of it.

If you’re going to put $5,000 in the stock market, on average you’re going to make 500 bucks a year. It’s a bit immaterial.

Your best option — if you think $5,000 is a lot of money — is to put it in the bank, look after it, don’t lose it, and spend all your time and energy improving your brain, putting it into your career, building a business.

Your job is to make money — not invest money.

 

Is Property or Shares Better If You Already Own a Home?

Audience question: If I already own a property, should I be investing in shares?

Well, it’s entirely up to you, isn’t it?

I would not be investing in shares if you don’t know what you’re doing. Property’s a bit easier to understand, I think.

So everything is about sticking to what you’re good at. If you’re good with property, if you understand property, if it doesn’t keep you awake at night — property might suit you.

But you can’t compare the two — because I don’t know who you are. I can’t tell you which one to be, because I don’t know who you are.

You may be an abject gambler, in which case stick to property — because you’re just going to blow yourself up in shares.

If you like putting money in a pokie machine — property.

 

Does Owning a Home Still Matter Today?

Audience question: Do you think owning a home still matters as much today as it did for previous generations?

Absolutely, it does.

But we’re talking about investment properties versus the share market. And if you remember, the conclusion was — don’t bother with investment properties if you’re young, because it kills your mobility, freedom, fun. And the best thing you can do is wait until you’re settled down before you get involved in property.

Do you think a home still matters?

Absolutely.

It’s not about investment — getting a home. It’s about having a foundation for your relationship. It’s about certainty. It’s about being able to add value to a home — which is very important.

I think it’s about a family. Owning a home. Having that foundation to their whole financial worth and relationship. That’s very important. And it’s as important today as it always was.

 

Avoiding Hype in the Share Market

Audience question: How do I avoid getting caught up in hype when investing in shares?

That’s just one question out of a million questions you could ask about: how do I avoid mistakes in the share market?

All I can say to you is get yourself a subscription to Marcus Today. We will keep you on the straight and narrow.

And if you — as a member of Marcus Today — emailed me and said, “How do I avoid getting caught up in hype when investing in shares?” I would say to you:

The stock market — any Marcus Today member will tell you this — the stock market is about watching the herd lose its head. Watching the herd getting caught up in the hype — and exploiting that.

So the stock market is about spotting shares caught up in the bubble, hype — and spotting shares in a sentiment hole, fear — and exploiting fear and exploiting hype.

So how do you avoid getting caught up in the hype?

Get educated about how the stock market works.

It’s not hard. Just sign up for a free trial.

 

Thank you very much. Thank you for your interest. I hope you can do a few things — which is not buy an investment property till you’re settling down, leave the investment properties to the old and rich, and see if you can get your grandparents to contribute to your super and your parents to give you your house deposit.