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.

 

  •   11 December 2015
  • 2
  •      
  •   

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

It’s time for LICs to die

A high-profile dividend cut and a prominent fund manager’s apology have reignited a long-running debate. If investors can access similar exposures more cheaply and efficiently elsewhere, what exactly is keeping LICs alive?

Testamentary trusts survived the trust tax. The drafting battle has just begun.

The fight over testamentary trusts looked settled. Then the draft legislation arrived. Hidden in a technical detail is a question that could force many families to rethink wills they thought were already future-proof.

Is it time to bail on Australian stocks?

For generations, Australian investors have backed banks, miners and dividends. But has that loyalty come at a cost? A look at the numbers raises an uncomfortable question about where future returns will come from.

The new capital gains tax trap for your portfolio

Investors have long accepted one portfolio rule without much question. A major tax shift could change that calculation entirely, forcing difficult trade-offs between risk, discipline and an overlooked cost lurking beneath.

How the typical Australian Family could save $844,350 in taxes

The value of a testamentary trust is not determined by wealth alone. Depending on circumstances, it can reduce the tax burden on inherited income, create efficiencies and help build intergenerational wealth.

The housing slide could become a crash

House prices are sliding across Australia, yet the most dangerous ingredient for a housing crash is still missing. If job losses surge amid growing economic risks, today's correction could become a historic property downturn.

Latest Updates

Retirement

The retirement scorecard: how many of these questions can you answer?

From the maths of retirement, estimating spending and picking the right asset allocation to survive a poor decade, here are the questions every retiree – current or future – should be able to answer for themselves.

2026 is not 1999

The US market looks eerily similar to the dot-com era with soaring AI spending and tech giants dominating returns. But one difference separates today’s boom from the dot-com bubble and it could determine what happens next.

Planning

Taxing time for trusts

Trusts are facing a shake-up, but an overhaul may not be necessary. Families can explore restructuring strategies that preserve succession and the asset protection benefits that have made these structures valuable.

Economy

Why the US economy is stronger than you might think

War, inflation and higher rates were expected to derail America. But has the market got it wrong? Three forces are driving the economy beyond expectations, revealing implications for stock prices and portfolio positioning.

Gold

How much trust is in your portfolio?

Everyone talks about diversifying assets. Far fewer think about diversifying trust. As inflation, debt and market assumptions collide, the question is whether portfolios need greater protection from unexpected outcomes.

Retirement

Retirement in reality - 7 months in

Seven months into retirement, I'm still uncovering surprises. This month was spent reflecting on the slow pace of health change, the myth of neatly scheduled part-time work and the unexpected persistence of retirement guilt.

The new geography of technology leadership

The next chapter of technology may not belong to the companies or business models many expect. As the landscape shifts, some opportunities are emerging in places that remain surprisingly overlooked by global markets.

Sponsors

Alliances

  • ASA-Logo-RGB-ActiveGreen-web.png

© 2026 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.