07 Nov 2024 Podcast: Guest – Practical Financial Planning with James Wrigley

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In today’s episode, Evelyn sits down with James Wrigley, a certified financial planner from Melbourne, renowned for his straightforward financial insights. With over 72,000 followers on Instagram and 92,000 on TikTok, James has become a trusted voice in personal finance, sharing practical advice on retirement planning, superannuation, capital gains tax, tax deductibility, and investments.

In This Episode, We Cover:

– Common questions in financial planning, especially around property investments

– Essential tips on retirement planning and understanding superannuation

– Key considerations for managing capital gains tax and tax deductibility

– Practical advice for building a financially secure future

– James’ perspective on a financial decision of his own that he would change

Tune in to gain valuable insights from James’ extensive experience, particularly if you’re navigating the complex world of property and long-term financial planning.

 

Connect with James and dive deeper into his practical financial insights:

Instagram: @iamjameswrigley

TikTok: @iamjameswrigley

 

Find out your next step in property finance:

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https://www.everlend.com.au/

There’s plenty more great content to come … so make sure you subscribe now on Apple Podcasts or Spotify so you don’t miss a thing.

You Have My Interest is brought to you by Everlend, a mortgage and finance broking firm built for the purpose of educating and empowering you to make informed financial decisions tailored to your wealth goals. Find out more and book in your free initial consultation at ​​https://www.everlend.com.au/

Get in touch:

Find out more about You Have My Interest at everlend.com.au/podcast and connect with us at podcast@everlend.com.au

You Have My Interest provides information and educational content relating to mortgages, finance and property. You Have My Interest‘s content is general in nature and does not take into account the individual financial, legal or tax needs or objectives of its audience members.

It is not intended as a substitute for professional advice. Listeners should seek out a licensed professional to discuss their individual financial, legal and tax requirements.

If you need mortgage or finance advice tailored to your own personal situation, contact Everlend today for a free consultation. Everlend are authorised credit representatives of Loan Market Pty Ltd, Australian Credit Licence number 390222.

Podcast produced with Apiro

Please find a Podcast summary below with the interview highlights:

James Wrigley, a Melbourne-based financial advisor with First Financial, joined the podcast to discuss key financial strategies, insights into property investment, retirement planning, and lessons from his personal experiences. He also touched on how his growing social media presence on Instagram and TikTok has allowed him to share financial education with a broader audience.

Key Takeaways

1. Social Media and Client Engagement

  • Growth of Social Media: James shared how his TikTok and Instagram accounts have grown, with Instagram now outpacing TikTok in followers. He posts financial advice videos that resonate with a wide audience.
  • Client Interaction: Many clients reach out directly through social media, booking consultations or seeking quick advice via direct messages. James and his team offer 15-minute calls to address questions and provide guidance.

2. Typical Client Profiles

  • Younger Clients (30s-40s): Often homeowners with steady incomes, looking to maximise their financial position and plan for the next 20 years.
  • Older Clients (50s-60s): Preparing for retirement, restructuring assets, and transitioning into life post-employment.

3. Property Investment Insights

  • Loan Structuring Tips:
    • Use offset accounts rather than aggressively paying down a mortgage to retain flexibility for future plans, like converting a home into an investment property.
    • Avoid borrowing against an investment property to fund a personal residence, as this debt is non-tax deductible.
  • Redraw vs Offset Confusion: James clarified that while redraw facilities allow access to paid-down funds, they can create issues with tax deductibility if used incorrectly.
  • Debt Recycling: A strategy to convert non-deductible mortgage debt into deductible investment debt by leveraging investments, though it works best for those not planning to convert their home into an investment property.

4. Superannuation Strategies

  • First Home Super Saver Scheme: A great tool for young Australians to save for their first home through voluntary super contributions. However, James highlighted the importance of understanding that employer contributions cannot be accessed.
  • Salary Sacrifice:
    • Effective for tax benefits and long-term growth, particularly for those in their late 30s and 40s.
    • The “carry-forward” rule allows individuals to use unused concessional caps from the past five years to make larger tax-deductible contributions.
    • Contributions are limited by a $500,000 total super balance cap.
  • Super in Retirement: Investing surplus funds in super can provide tax-free income in retirement.

5. Managing Capital Gains Tax (CGT)

  • What is CGT? Tax on the profit made from selling an asset. Only 50% of the gain is taxed if the asset is held for more than 12 months.
  • Strategies to Minimise CGT:
    • Sell assets in low-income years (e.g., after retirement).
    • Use superannuation contributions to offset taxable income.
    • Maintain detailed records of expenses and improvements to adjust the cost base.

6. The Six-Year Rule

  • Allows individuals to move out of their home and rent it for up to six years while retaining primary residence capital gains tax exemption.
  • Land tax and other investment property costs still apply.

7. Insights into Negative Gearing

  • James noted misconceptions about negative gearing, emphasising that it involves losing money year-on-year, offset by future capital growth.
  • While it’s unlikely negative gearing will be scrapped entirely, he suggested that introducing limits may be beneficial.

8. Buying Property in Trusts

  • Investment Properties: Trust structures can work for property investments to optimise borrowing capacity, but they require significant upfront capital.
  • Primary Residence Risks: Owning a home in a trust may forfeit capital gains tax exemptions, creating complications in the long term.

9. Retirement and Property Portfolios

  • Clients often need to sell investment properties to generate retirement income due to low rental yields and high associated costs.
  • Proceeds can be reinvested in liquid, income-generating assets or superannuation for tax advantages and flexibility.

10. Personal Investment Reflection

  • James shared a regretful decision about purchasing an off-the-plan apartment that resulted in financial loss and lost opportunity for long-term growth. He emphasised the importance of making rational, not emotional, investment decisions.

Conclusion

James highlighted the value of planning for long-term financial goals while remaining flexible to adjust strategies as circumstances change. Whether navigating property investments, superannuation, or retirement planning, working with a financial advisor can streamline decisions and maximise results.

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