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Summer Series, Guest Editor, Noel Whittaker

At a time when we are overwhelmed with information, getting back to basics is crucial. This desire to focus on the fundamentals has guided the selection of my favourite Cuffelinks articles, mainly from 2017.

Whenever I give a seminar, many of the questions are from people who want to know where the stock market is going, where interest rates are going, where commodity prices are going and where they should invest next. My reply is always that if they focus on things they can control, they won't need to be unduly worried about things they can't.

This is why the article on Howard Marks is so important. It goes right back to basic principles, explains the dangers of forecasting, and how many of them are wrong.

This leads naturally to the next article by Don Stammer. Just before the 2016 presidential elections, I received many emails and calls from people telling me proudly they had cashed in their portfolio "in case Trump got elected". And we know what a bad decision that turned out to be.

In my 20 Commandments of Wealth for Retirees (also available as a PDF by free download from my website) I point out that one of the worst enemies of the investor is the media – it only focuses on bad and pessimistic news.

The Labor attack on family trusts showed a deplorable lack of knowledge about how they work. It also had the potential to scare people away from what has long been one of the most attractive and effective entities for minimising tax legally, and protecting assets. Therefore, Sam Wylie’s article was timely inasmuch as it explained in a simple way how trusts work and the benefits they could bring to investors.

As I have said many times, the main enemy of an investor is not the markets or taxation, it is simply ignorance. Having reached the ripe old age of 78, my focus has moved from acquiring assets for myself to spending my money in a way that enables me to leave a legacy. And all the research shows that giving money to worthy causes produces enormous personal happiness and satisfaction.

After I read the article by Antonia Ruffell, I phoned Chris Cuffe for advice on what my next step should be. This led me to a meeting with Antonia, and subsequently to starting my own endowment fund. I am delighted with the process.

We are now 30 years from the 1987 crash. For many of us old grey hairs it is still memorable, but most Australians who have reached investing age know nothing about it. Ashley Owen has been a friend of mine for many years, and is one of the most knowledgeable people about markets I have ever met. This article is an outstanding contribution to the pool of knowledge that any successful investor needs to have.

Noel Whittaker, Guest Editor

Noel Whittaker is one of Australia's foremost authorities on personal finance and a best-selling author of many books including Making Money Made Simple. See

January 18, 2018

Trusts and Negative Gearing are minor when compared to the spectacular gains made by those who own and/or speculate in land, especially land with a high locational value.
These gains are largely untaxed and contribute to the transfer of unearned wealth to those lucky enough to own land in these locations. The next major collapse (a la 2008) will occur when there is excessive credit fuelled speculation in land - aided and abetted by the banks and other lenders.
Interested - For more information try googling Fred Harrison and Phillip J Anderson.

January 16, 2018

People are just using a structure that is there, to legally minimise their tax. Human nature. Whether the structure is appropriate for use as described is a different matter, and up to governments to determine.

A bit like negative gearing. Can be good for those that elect to use it. Probably disadvantages those that don't, as less tax paid by some yet the amount required to run the country the same. Net winners and net losers.

I believe a lot of politicians use family trusts and/or negative gearing!!!

January 15, 2018

Noel, I'm left a little confused after re-reading Sam Wylie's article on how trusts work.
Not by the maths mind you, but by the appropriateness of such legal structures.
Are you really suggesting that allowing very wealthy people to achieve an effective tax rate of 13.5% (as in the example given) is a good thing for our society? If so, that's a pretty big nod to neoliberal ideology and as a regular reader of your columns it does surprise me a bit.

I understand that trusts may have their place in protecting business assets (farms are often given as an example), and in succession planning, but Sam's article didn't touch on these benefits.

January 11, 2018

Noel, Sam Wylie’s article is fine as far as it goes (i.e. how trusts work), but it doesn’t address why they are allowed. I suggest this be the focus of another article. I expect it will be a very short article, explaining the appropriateness of a trust when an adult beneficiary is incapacitated from decision-making or where children are wards of the state, but otherwise observing the inappropriateness of such structures.

Best wishes, Alex

Fred Randall
January 11, 2018

So people are offended by the truth now. What princesses we've become.

January 18, 2018

Your agreement with Noel Whittaker's opinion does not make it a "truth".It is possible that rather than Labor having a "deplorable lack of knowledge of how trusts work", they fully understand them and that is precisely why they want to remove them.

January 11, 2018

The email you sent out where Noel Whittaker is the guest editor contains the following sentence,
"The Labor attack on family trusts showed a deplorable lack of knowledge about how they work."
I am interested in hearing yours and his opinions on investing, not on politics. Perhaps a more neutral tone might be better in the future.

John Bannister
January 11, 2018

On the family trusts article, costs of set up and operation must be taken into account.
Compliance costs on a company and trust structure will be at least $5,000 pa.

Also there is no reference to the Centrelink Controlled Private Trust or Income Tax Division 7A rules.


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