The BIG Money Problems
Facing Baby Boomers Today
The Problem With Retirement Planning Today.
Hi, I'm Owen, the Founder of The Rask Group and lead advisor of Rask Invest, an exclusive members-only website designed to help all Aussies get the most out of their finances before retirement.
Over the past five years, I have been very fortunate in my career. I’ve appeared on national television, had my finance tutorials viewed for thousands of hours and launched a rapidly growing news website.
However, my true passion lies with educating people to invest and get the most from their finances to achieve long-term financial goals.
Before I founded the Rask network I was an Investment Analyst for a prestigious Melbourne-based research firm and a writer/analyst providing coverage of Australian shares.
Q: What is Rask Invest?
Rask Invest is an exclusive website that includes all of my financial research, which we call the Rask Invest Strategy. It’s divided into bite-sized general advice sections, such as:
- Everyday finances and budgeting
- Superannuation and getting the most from it before...
- Retirement, including pre-retirement tips (inside and outside of Super)
- Insurance (e.g. the names of my preferred health, home and contents insurers), and
- Investing, which includes exclusive access to my model investment portfolio of ASX and international share ideas
The strategies inside Rask Invest took me more than 6 months to research, refine and publish.
My goal with Rask Invest was to create a strategy that can turn everyday Aussies into an investor. Whether it’s a person in credit card debt, a family of four, or someone rapidly approaching retirement. The strategies are designed to be simple to implement, low-cost but effective.
Q: Why should people start investing now?
There’s a finance saying, ‘you’ll never get rich investing in a savings account’. I think that's true now more than ever.
I’d say it’s not impossible to get rich with a (taxed) term deposit interest rate between 2% and 3%, but it's very unlikely. You would need an incredible savings rate!
In my mind, everyone needs to invest to get ahead financially.
Interest rates are at historic lows and relying solely on the family home to appreciate in price is a risky strategy.
Investing is about money making money, or compound interest. It’s boring but it’s true. Little bits of savings invested lots of times could work wonders over 5 years or a decade or two.
It doesn’t matter if you’re saving 1%, 5%, 10% or 50% of your income, everyone needs to invest if they want to escape the rat race. But it’s never too late to start! As use a famous saying, 'the best time to plant a tree was 10 years ago, the next best time is today.'
Q: Rask Invest is the third website of the Rask network. Can you explain why?
My passion and mission with the Rask brands is to empower people financially. It started with educating people via Raskfinance.com. It was fantastic to see how many people responded to our free content. If you asked me when I started I never would have thought the free videos would be viewed for 2,000 hours in the first year. It’s fair to say that learning about finance isn’t at the top of most people’s weekly ‘to-do’ lists!
Rask Media is a separate website to Rask Invest and Rask Finance. It’s a place for free finance related news and analysis from third-party experts. I think the ability to access high-quality information is one of the most important pillars in getting ahead financially.
As I have written before, there are three edges in investing: informational, analytical and behavioural. Meaning, with a true long-term investment horizon (a behavioural advantage) and access to good quality information, I think it's possible for almost anyone to invest their money successfully. I hope Rask Media can fill the informational gap.
Q: Are you more bullish on shares or property?
Both of them have a role to play in a long-term portfolio. However, taking a ‘whole of market view’, I’m more positive about the prospects of investing in shares than Australian property over the next 5 years.
We’re about 9 years into the current bull market and it’s been more than 20 years since the last Australian recession. I’m not predicting doom and gloom – by definition a long-term investor must be optimistic – but I think better opportunities will be available in the sharemarket.
I probably won’t make many friends for saying this but I don’t think property prices will return to their recent price trajectory for a few years. There are good and bad pockets in every market, for sure. And over the long pole, we’ve got population growth and urban density playing their part. But with interest rates, wages and credit growth where they are, I expect property markets to underperform a diversified portfolio of high-quality shares in coming years.
Shares are risky in ways property is not, of course. But I like having the optionality of owning small, liquid pieces of great companies, which I expect to compound my investment over many years. Getting into debt to invest in property may be a good strategy when interest rates are falling but that cannot last forever, so it's important to diversify.
In the current interest rate environment, the dividend yields on some Aussie and international shares are also very appealing. I don’t target dividend yields as a rule per se. But if I receive 2% or more in dividends while holding shares in profitable businesses earning double-digit rates of return on their capital, to me that’s ideal.
When the shares pay franking credits it’s even better!
Q: What do you see as the greatest risks for investors setting long-term financial goals in 2018?
Income is still the big issue, in my opinion. 10 or 15 years ago a term deposit and savings account would be paying more than 5% or 6% interest. That was great for investors, but especially those in or near retirement. Unfortunately, we're now lucky to get 3%.
Meanwhile, yields in property have come down with the fall in interest rates. Many of the investors who were good enough to get ahead of the decline in interest rates are dealing with the effects of being ‘asset rich’ but ‘cash flow poor’.
For investors in a stable high-paying job with a long-term investment horizon, the income issue may not be as impacting. Unfortunately, for anyone who even partially relies on income from investments -- or plans to do so in the next three to five years – finding income is a major financial headache.
In my opinion, the worst decision someone could make would be turning up the risk of investments in an effort to capture better returns. I think some exposure to assets like shares and property will be vital over the coming decade. But investors must set their timeline first, do their research and understand the risks. Only then is it correct to focus on the return potential (dividends, capital gains, etc.).
Another problem would be investors stepping too far outside of what they’re comfortable with. Once again, planning is essential. If you're not comfortable with the strategy now, imagine how you'll feel if the property and share market fell 20%.
That's why Rask Invest sets some ground rules before investing. The first rule is an emergency cash balance. Then, no debts charging more than 10% in interest. After all, paying down a debt with 10% interest is just like earning 10% from an investment portfolio. Finally, 'must have' insurance to cover ongoing expenses.
Lastly, a big risk I see frequently is the issue of people failing to diversify -- but maybe not how you think.
I see singles and one-income families whose breadwinner works in, for example, the construction industry. Then, they have a mortgage and an investment property. That’s a big gamble on rising property prices, in my opinion. If you're right, that's great. But even the best investors can be wrong 33% of the time.
Q: Can you tell us more about how you invest?
I’m not sure if you would call it growth or value investing but my personal investment strategy -- and the strategy I follow for Rask Invest -- is a long-term one. There are a few things I look for in the companies I buy.
Firstly, a company needs high-quality management, who own bucket-loads of shares in the company they run. That keeps their financial interests aligned with mine. As the saying goes:
‘if you don’t have an interest you won’t have an interest’
For the first investment idea I released to Rask Invest members the CEO has an ownership position of more than 13 times his annual salary. Little surprise this tech giant is up more than 300% in 5 years.
The companies I buy also need some type of competitive advantage. This could be a patent on a product, size, technological advantage, contracts or network efforts. Simply put, if a company cannot withstand competition its profit margins will be quickly eaten up by competitors or new entrants.
A company also needs long-term growth prospects. And, finally, I need to be able to buy it for a reasonable price. ‘Reasonable price’ are the keywords.
There are plenty of high-quality companies in the world but successful investing is about having a ‘variant perception’. It’s about asking yourself, ‘what do I know that other people don’t?’
This ‘edge’ comes from the ability to access information or from analytical insights. As I said earlier, one edge that’s often overlooked is the ability to control your emotions and adopt a long-term investment horizon. I’m still amazed when I see seasoned investors getting spooked out of an investment and making emotional first-level decisions, as Howard Marks might say.
When I’m investing I’m targeting above-average returns over 3 years (at a minimum).
Q: Do you invest outside of the ASX?
Yes. As part of Rask Invest, I release investment ideas from the ASX as well as international markets. In my personal investing journey some of my best investments have come from outside of Australia in companies that most of us know and whose products we use everyday.
In addition, companies like Google, ING, Berkshire Hathaway, Nestle, Nike, Unilever -- and more than 95% of the world’s stock investments – are not listed on the Australian market. So I think it’s a no-brainer to at least consider investing overseas. Having some international investments can also offer diversification benefits.
Rask Invest provides steps for getting started in ASX and global shares.
On the ASX specifically, I think there will be many good opportunities showing up over time, particularly for investors eager to get their hands on some fully franked dividends or those willing to look at the small-cap end of the market. Aussie investors can get started investing in ASX shares with a minimum investment of $500.
Q: Do you buy into the share ideas after they are released?
Yes. Our members get a 5-day head-start on me and my model portfolio. Meaning, our members will receive an email notification telling them that I have published a new investment idea (a buy, hold, sell, etc.). It’s up to them to consider if it’s right for them and choose whether or not to buy or sell.
I’ll buy into the share idea using the model portfolio at least 5 days later. As I said earlier, understanding a person’s financial interests are vital. I wouldn’t recommend something if I wouldn’t be willing to own it myself.
Q: Who would sign up for Rask Invest?
People often ask me ‘who it’s designed for?’ and I say, “almost everyone”. Whether or not you’re investing, I think there’s a lot of great content in there.
For example, I carefully designed a simple and potentially tax-effective strategy for getting the most from Super before retirement. That would some suit people but not others.
Rask Invest members will also have access to all of my other research and strategies for Super, as well as my preferred home and contents insurers, the small – but award-winning -- health insurer that blew me away, and information on Centrelink and estate planning. So there’s heaps of other research and information on offer.
I also get enquiries from professionals, from university graduates and tradies to those preparing for retirement. These people tend to be eager to learn about finance and investing which is great because time is on their side. No matter how small it may seem, small changes have the potential to make a big difference down the track thanks to the laws of compounding.
Many people are likely to join Rask Invest for my investing ideas. They might be highly successful and financially secure, near or in retirement, have an SMSF or a portfolio worth hundreds of thousands of dollars.
As you can see, the market for Rask Invest is clearly very broad.
In my opinion, the two biggest differences between Rask Invest and other types of financial services are the requirement of motivation and fees.
Rask Invest members need drive and motivation to improve their financial situation. We don’t offer personal financial advice, we provide general advice or information. Therefore, Rask Invest members are the types of people who are willing to roll up their sleeves and get stuck into their finances. It’s not an easy thing to do but I believe it can be hugely rewarding - both emotionally and financially.
The other big difference is fees. Rask Invest costs $365 per year and we don’t take a cent from any product providers, like insurers, banks or other financial institutions. That is, we’re not aligned with anyone and we’re going to keep it that way. If you think about it, $365 is around $1 a day. A decent adviser might charge you that for the first hour!
Ultimately, if our members are prepared to invest in themselves, which I think is crucial to empowering one’s self, Rask Invest could be a rewarding way to get started and learn about finance and investing.
Q: Do you offer a money-back guarantee?
We have a 7-day full money-back guarantee.
I hope that provides some piece of mind for people considering joining Rask Invest. If they decide it’s not for them, that’s okay. I’ll refund their cash in full. Of course, I’d rather that doesn’t happen and I don’t think it will. But I know Rask Invest may not be for everyone.
Q: How can people join?
The best way to get started is to visit the Rask Finance website, www.raskfinance.com. Alternatively, simply doing a Google search for “Rask Invest” will help people find us.
I hope we’re one of the first search results!
JOIN RASK INVEST TODAY!
Online General Financial Advice
Rask Invest is a members-only online service. Rask Invest members get access to general financial advice on...
ASX & International Shares
Tax-effective pre-retirement strategies
Health, Travel, Home, Car & Contents Insurance
Rask Invest Members Receive More
Rask Invest members receive tips, information and education on important financial concepts, including...
Centrelink benefits & estate planning
Strategies to remove debt sooner
Property buying, selling & investing tips