Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 138

A lifetime of investing insights

Looking back over the last quarter of a century, the main theme – despite the enormous changes during the period – has been history repeating itself. Bust follows boom, boom follows bust, and today’s investment fashion is quickly replaced by another.

In fact, when I was at the State Library of Queensland researching newspapers back to 1988, I was struck by how often the same headlines kept popping up.

But there are two crucial factors that are unique to the world we live in today – rising life expectancies and record low interest rates. It is the perfect storm, because people retiring now face the daunting prospect of making their money last as long as they do. Many are averse to growth assets like property and shares, which they regard as ‘risky’, but the grim reality is that sticking with low-earning cash may be the riskiest strategy of all over the long-term.

By 2017 a couple with assets in excess of $823,000 (excluding the family home) will not be eligible for the aged pension. Yet, if all they have is $900,000 in bank accounts, their income may be just $18,000 a year – not much more than half the aged pension that is paid to a couple with no assets. And running down capital to become eligible for the aged pension is a dangerous strategy indeed. The present rate of aged pension is unsustainable in the long term, which means further tightening of pension eligibility is a certainty. There may well come a time, sooner rather than later, when the question will be asked “Why should a couple with $500,000 of financial assets be eligible for welfare?”

And there’s more. Already there are moves to remove the asset test exemption for the family home currently enjoyed by age pensioners, to bring in universal land tax on the family home, and to tinker with superannuation even further. These ideas will gather momentum as the number of retirees grows, and government budgets come under further pressure. All spell tougher times for senior citizens.

Fortunately, there are lessons to be learned too: one for each main stage of life.

If you are young it is surely obvious that you will need to rely on your own investments when you retire; governments around the world are running out of money. Understand that you have one unique advantage – time – and start a savings and investment programme now to give compound interest time to work its magic.

If you are middle-aged, medical advances sure to occur in the next 30 years make it an odds-on bet that you will make it to 100. Therefore, it makes sense to form a relationship with a good financial adviser as a matter of urgency and get yourself a quality growth-orientated portfolio. It is my strong belief that shares are the only asset that will give you the returns you are going to need and the sooner you get acquainted with them, the less scared you will be when markets go through their regular down periods and the papers have a field day with scary headlines.

If you are elderly, dramatic medical advances may come too late for you. It is quite likely that you will face the challenge of running two homes, with one partner in care. It’s natural to dodge this issue of accommodation but the sooner you face it the better you may be able to cope. Home care is becoming the norm and will be much easier if your home is able to be equipped for people who need assistance.

For everybody, building or retaining wealth is an important part of achieving a comfortable family lifestyle now and in the future. This means being aware of probable futures and having the resources to cope with whatever challenges lie ahead. It is my fervent hope that my new book will make a significant contribution to helping you take control of your future, and achieve your goals.

 

Noel Whittaker has been a great supporter of Cuffelinks since the day we started. He ran his own financial advice company, Whittaker Macnaught, for 30 years, and in 2011, he was made a Member of the Order of Australia for raising awareness in personal finance. For more than 25 years, his articles have been published in leading newspapers and journals. He has personally selected his highlights and brought them together in one book, ’25 years of Whitt and Wisdom’, which can be ordered on the link here.

 

RELATED ARTICLES

Should I maximise my pension by investing in the family home?

OK Boomer: fessing up that we’ve had it good

Time to build a super system fit for retirement

banner

Most viewed in recent weeks

Which generation had it toughest?

Each generation believes its economic challenges were uniquely tough - but what does the data say? A closer look reveals a more nuanced, complex story behind the generational hardship debate. 

Maybe it’s time to consider taxing the family home

Australia could unlock smarter investment and greater equity by reforming housing tax concessions. Rethinking exemptions on the family home could benefit most Australians, especially renters and owners of modest homes.

100 Aussies: seven charts on who earns, pays, and owns

The Labor government is talking up tax reform to lift Australia’s ailing economic growth. Before any changes are made, it’s important to know who pays tax, who owns assets, and how much people have in their super for retirement.

The best way to get rich and retire early

This goes through the different options including shares, property and business ownership and declares a winner, as well as outlining the mindset needed to earn enough to never have to work again.

A perfect storm for housing affordability in Australia

Everyone has a theory as to why housing in Australia is so expensive. There are a lot of different factors at play, from skewed migration patterns to banking trends and housing's status as a national obsession.

Chinese steel - building a Sydney Harbour Bridge every 10 minutes

China's steel production, equivalent to building one Sydney Harbour Bridge every 10 minutes, has driven Australia's economic growth. With China's slowdown, what does this mean for Australia's economy and investments?

Latest Updates

Economy

Why we should follow Canada and cut migration

An explosion in low-skilled migration to Australia has depressed wages, killed productivity, and cut rental vacancy rates to near decades-lows. It’s time both sides of politics addressed the issue.

Investing

Simple maths says the AI investment boom ends badly

This AI cycle feels less like a revolution and more like a rerun. Just like fibre in 2000, shale in 2014, and cannabis in 2019, the technology or product is real but the capital cycle will be brutal. Investors beware.

Property

Australian house price speculators: What were you thinking?

Australian housing’s 50-year boom was driven by falling rates and rising borrowing power — not rent or yield. With those drivers exhausted, future returns must reconcile with economic fundamentals. Are we ready?

Shares

ASX reporting season: Room for optimism

Despite mixed ASX results, the market has shown surprising resilience. With rate cuts ahead and economic conditions improving, investors should look beyond short-term noise and position for a potential cyclical upswing.

Property

A Bunnings play without the hefty price tag

BWT Trust has moved to bring management in house. Meanwhile, many of the properties it leases to Bunnings have been repriced to materially higher rents. This has removed two of the key 'snags' holding back the stock.

Investment strategies

Replacing bank hybrids with something similar

With APRA phasing out bank hybrids from 2027, investors must reassess these complex instruments. A synthetic hybrid strategy may offer similar returns but with greater control and clearer understanding of risks.

Shares

Nvidia's CEO is selling. Here's why Aussie investors should care

The magnitude of founder Jensen Huang’s selldown may seem small, but the signal is hard to ignore. When the person with the clearest insight into the company’s future starts cashing out, it’s worth asking why.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.