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The Property Couch Blog post by The Property Couch

The Property Couch Chat with Paul Clitheroe

 

We usually don’t repost the episodes in our podcast, The Property Couch, but our 200th Episode is a milestone! And for our milestone, we got a legendary Money Guru that changed a lot of Australian households back in the 90s.

Yes, we are talking about none other than Paul Clitheroe!

As the host of the show Money on the Nine Network from 1993 – 2002, Paul was the pioneer in the media industry and revolutionised how Australians look at finance and money management.

But that’s not where he started his career in the investment industry.

Graduated from UNSW, Paul and his university friends founded a leading financial planning firm, ipac back in 1983. He’s been active in the investment industry ever since then and more recently, became the Chairman of the Australian Government Financial Literacy Board, Financial Literacy Australia and InvestSmart. He’s also the Chairman and chief commentator of Money Magazine and has authored a list of best sellers such as Making Money, Financial Snakes & Ladders, Control Your Own Super Fund, The Road to Wealth and more!

And last but not least, he’s also a great storyteller and has heaps of gold to share with the community!

Here are a couple of short clips that we’ve got from this episode but we strongly recommend you to tune in if you’ve got the chance.

>> Listen on iTunes

>> Listen on Spotify

 

 

Read the Full Transcription Below…

Bryce:                                   Alright folks, you’re on The Property Couch where, for the last 200 episodes, we bring you the insider’s guide to property finance and money management.

Ben:                                       Is this where I celebrate?

Bryce:                                   Come on. This is where I celebrate. This is where we celebrate with tea cakes, right?

Ben:                                       I say… never mind.

Bryce:                                   Happy 200!

Ben:                                       Happy 200 episodes.

Bryce:                                   I feel like Don Bradman happy.

Ben:                                       No rise in the bat, 200.

Bryce:                                   There it is. Shows how far have we come folks.

Ben:                                       We now have our own studio here. Back in the day was just at a desk. You and me within the walls. It was a little photo of us over there sitting at our desk riffing it. But we have to celebrate. We were talking about how we do that we do.

Bryce:                                   200 trial. And you’re a pretty humble guy and —

Ben:                                       I don’t know about that.

Bryce:                                   You don’t make too much of a fuss. It’s usually, Ivise and I making a fuss. You used to make a fuss.

Ben:                                       Instead of making a fuss, I just turn up.

Bryce:                                   You just turn up. When we got word of today’s guest, you were high fiving all around the joint. When you think about the number one person in money and investing…

Bryce:                                   This person.

It’d have to be this person in Australia. Well, let’s build it up. Back in the nineties, this person was captivating the television audiences of Australia.

Ben:                                       He was.

Bryce:                                   Had ratings that were envious to any channel.

Bryce:                                   Almost one in two households were watching his show.

Ben:                                       His show. Now this guy couldn’t walk into a restaurant or a public place without people treating him like a celebrity. He had a massive impact on me as a teenager.

And he has gone on to dedicate his professional life to serving others. And if that’s not purpose and fulfillment all in one… Heads up, the literacy foundation’s just doing some amazing work, and as the Chair of some of these associations and, obviously, also in the investment business he created with these other partners. He has transformed the lives of all of those people involved.

Bryce:                                   And, Ben this particular person keeps it pretty real too. In terms of the level of wealth he has, it hasn’t allowed him to forget that he’s a human being who’s focused on doing activities rather than accumulating new shiny objects.

Ben:                                       But a little clue in here as well, money behaviors and money habits…

Bryce:                                   And where and how he learnt them. So, without further ado Ben, who did we actually get the privilege of interviewing?

Ben:                                       Mr Paul Clitheroe.

Bryce:                                   Mr Paul Clitheroe. Now, for some of you, might not know who Mr Paul Clitheroe is, but if that’s the case, I think you are in for a treat. For those of you who know who he is, oh, you won’t be disappointed. Unless you don’t know who he was because he might have been a bit before your time…

Ben:                                       Yep.

Bryce:                                   I’m talking about our Gen Ys perhaps and millennials.

Ben:                                       Did you know who he was?

The Stig:                               ** shakes head **

Ben:                                       There was a couple in our office who didn’t know. But all of the people my age with a little bit of a silver, salt and pepper, in their hair, they certainly knew who this is. And I’ve got some books of his.

He is a busy man, so we had to play record. We had to fly to Sydney and we spent some time earlier to catch him but we got an hour and a half of his time and my goodness. What a thrill.

Bryce:                                   It was a thrill, your right. So stick around for that folks. I had a Mindset Minute thing that I’ve been saving for our 200.

No matter where you’re at, how much money, time, skills or resources you don’t have, there was someone out there that had less than you and still made it work.

 

Ben:                                       There we go. So who was that quote from?

Bryce:                                   That was from James Wedmore.

Ben:                                       We saw him in the States.

Bryce:                                   So the point of being —and, I spoke about him briefly in my Mindset Minute from last week when I mentioned the guy that we saw, the 28 year old — it’s all about problem solving and taking action. You don’t need to know everything. So I’m going to say that again, no matter where you’re at, how much money, time, skills or resources you don’t have, there was someone out there that had less than you and still made it work.

And just before we cut to this episode, just a heads up: it does go over an hour and a half. Which we’ve very rarely done, but what I will say to you is it’s worth the time investment.

Ben:                                       Yup.

Bryce:                                   Story starts from the very beginning and it keeps that pace all the way through.

Ben:                                       We were going to break it down into two. We’re just going to do one big one because it’s our 200. So we’ve just taken a little bit of poetic license and we pushed it out.

Bryce:                                   So for those that are listening on the commute, there’s a bit on the way in and a bit on the way out today!

Ben:                                       But it’s well and truly worth it. So let’s cut to that. Once again, we are very lucky that we have got a very special guest today on our 200th episode.

 

Ben:                                       You had asked me, “What about the squeaky table”, so you have to bear with us on that. But if you had asked me who I wanted to get…

Bryce:                                   I did ask you, and this is who you said you want.

Ben:                                       He is the king, and we’re going right to the top with someone who’s been transformational in mum and dad’s lives, in terms of helping them organise and manage their money. You can’t get any better than this man and we’re delighted to have you.

Bryce:                                   Welcome to the podcast, Paul Clitheroe.

Paul Clitheroe:                  Good morning guys.

Ben:                                       How are we?

Paul Clitheroe:                  Got the pattern, was slightly damaged. The boat racing. I’m actually a pretty good.

Bryce:                                   You could say that. It’s actually quite interesting what you’ve got there. Just in terms of backstory, you’re the Founding Director of the leading financial platform, APAC. You’ve been involved in the investment industry since you graduated from the University of New South Wales in the late 70’s. You completed the two year post graduate course offered by the Securities Institute and are a fellow of that body. You’re a board member of the Financial Planning Association of Australia between 1992 and 94.

And in 1993 you were elected the Vice President. And then in 94 you were the President. But there’s more. There’s more from 93 to 2002, you hosted at a popular channel nine program, Money — and we’ll talk about that a lot more. And in 2009 you presented Second Chance as well as Money for Jam. Pretty busy. And since 1999 you’ve been the Chairman and Chief Commentator of Money magazine.

So a lot of people know you from the magazine. And also in 2003, the Federal Government elected you, or appointed you, the Chairman of the Financial Industry Task Force. And the body has since evolved into the Australian Government financial literacy board, and Paul continues as chairman. In 2008 you were appointed a member of the order of Australia for services to the community and the financial sector through the promotional financial literacy.

Bryce:                                   And we were talking before we push record you have written numerous books, but just to name a few — Money, Marriage And Divorce, Making The Most Of Your Assets In Good Time and Control Your Own Super Fund, How To Maximise Your Greatest Investment Asset, Free Yourself From Debt, How To Take Control Of Your Finances and Making Money The Keys To Financial Success and Make Your Fortune by 40.

Paul Clitheroe:                  And I’m 63.

Ben:                                       And you did allude to it — but you’re a keen boater and golfer, living in Sydney with your wife and three children. So, that’s, I mean there’s a lot to cover there.

Paul Clitheroe:                  I can’t wait.

Ben:                                       What are you most fond of, in terms of your career? What do you think that’s the most exciting for you?

Paul Clitheroe:                  Well, career-wise I have been privileged. I’m a frustrated school teacher and, at the end of the day, it’s part of the reason I do so much and have done for 14, 15 years now. So much pro bono work around the government boards that I sit on, both sides. I’ve actually been appointed now by 6, well, 7 Prime Ministers as of this week. Twice by Kevin Rudd.

But basically people often wonder, and this, I think, is kind of… I don’t want to go around in circles too much. But in a sense I’ve always been really interested in finance. I think when you’re young, looking after your wife, three young children, mortgage, and obviously feeding your family and paying your mortgage is a really good thing to do. But I’ve always had this deep sense that as a community, what can I put back? And you also see this and, really, if people just did a few basic things a bit better, the individual will be better off.

The family’s better off. If the family is better off, the community is better off. If the community is better off, I’m then selfish because I’m also better off and so are my children as well. So, I just… it’s not all altruistic. I just think we’re going to live in a happier place. And when I drop dead, I think my children and their children, my grandchildren will live in a happier place if we have a reasonable spread of wealth across the community.

And what I’m a bit fearful about is that if you’re clever with money and you’ve got a bit of money behind you, I’m a bit fearful about the rich getting richer and absorbing too much of the pie. Because we know Australia is a really nice place. It’s the average Australian or, more importantly, that middle Australia. The “12.5 million Australia”, the person right in the middle in this country, is actually wealthy

Whereas you go to America and that Middle American is not wealthy.

Ben:                                       Especially in the last 10 years.

Paul Clitheroe:                  It’s drifting off. And so basically, and we know for a key fact that some simple knowledge is one of the things that gives you more balance in local society.

Bryce:                                   You mentioned a few things being “A bit better”. Do a few things come to mind that people could do better?

Paul Clitheroe:                  Oh, we’re looking at that. But that’s the annoying simple thing. I’m not laughing at… You’d like, you’ve got one on my own, thanks to my dad or Granddad or someone over time to good crop hair. It’s white. I noticed that you’ve got, I mean that’s positive we’ve…

Bryce:                                   My book probably stains from it sitting on the bookcase from years ago.

Paul Clitheroe:                  Well funnily enough guys, what’s fun for me is walking out here today, just strolling down the street. I’m buying coffee and someone said to me, “you know Paul, have you got some money tips?”. And I think this is probably my very favorite thing I do, and I get asked this pretty much daily, “When you start the Money show, you said put an extra $10 a week in the mortgage.” And what every single person says is, “I thought that was such nonsense. Like my mortgage is the size of a burger. How is 10 bucks gonna help? Like Come on!”

Like, “Surely you’re conning me.” And so basically what I love, and what these people are saying is, “Thanks for that 10 bucks.” I paid off my mortgage between 5 – 7 years early. And don’t forget, we’re not talking a $800,000 mortgage in 25 years. The 10 bucks today might now mean you need to put 20 or 30 bucks aside.

Paul Clitheroe:                  But I think what I’m doing there in my opinion is, “How do you teach people compound interest?” We can use the words compound and the reality is people glaze over. But I think if you just say to someone else, for God’s sake, just put all this money, just 10 bucks for God sake, or just put 20 bucks a week, into your mortgage, will you?! And so in my opinion, it’s just not really… it’s making stuff real. There’s no point in me telling my young adult kids, “Save for your future retirement” — for young adult kids, that’s too far away. What I think I’ve managed to do over the years is trying to put things in a meaningful sense like this.

 

Put 20 bucks into your mortgage. Top up your super like 20 bucks, particularly if you’re over 45. I mean just simple stuff: spend less than you earn. If you don’t want to do a budget, don’t do a budget. I don’t care. But if you’ve got 500 bucks a week after tax, don’t spend 500 bucks a week. Work it out. If a budget helps you so much, the better. I’ve always tried to phrase it in terms of what makes you better off. I think it’s important.

 

Ben:                                       Going to your backstory, in a couple of episodes ago, Bryce and I share how we learnt our money behavior from our parents and you don’t fall too far from the tree, as we say. And we shared a couple of stories around sort of moments in time where we’d play with a tangible money or whatever it might have been. It gave us a sense of context and so forth. For you, when did you… you’re born in England, is that right? When did you start to think that money was important and what were your parents like with money to give you the interest that’s taken you into the career?

Paul Clitheroe:                  That’s probably the most important question for the day actually. Because in terms of younger parents, maybe older parents, grandparents. The thing that I had, I mean the real piece of fortune I got on listeners and you may not believe me here. But what happened around our family dinner table, gave me a career and it allowed me to make money. How important is that? It allowed me to pay a house. So what happened at my dinner table didn’t happen at many. Now this is sheer luck. My father was a very liberal English physician doctor and came from a liberal English family. And so therefore around my family table even at quite a young age, I grew up in the country town of Griffith. In fact, my dad was about the illegal drug dealer from about 300 years.

Ben:                                       If you don’t understand what we’re talking about, just google Griffith. If you want to stay with us.

Paul Clitheroe:                  It’s a lot of things that are growing between the other plates. Citrus fruits and Griffith is a wonderful place to grow up by the way. Went back recently for a school reunion. I really adore Griffith but I do think it’s a pretty funny story. So in my table in a liberal English family, two things happened in the 19 and so I came out to kind of support and 1955 came out. In 1963, we arrived as 10 quick…

Ben:                                       Yep.

Paul Clitheroe:                  I think we had 14 English doctors at the time.

Ben:                                       Wow.

Paul Clitheroe:                  But most of the country, New South Wales in particular, was populated by English doctors who were just… I think national health scheme wasn’t going so well in England those days. And I think Australia is very fortunate to have all those English doctors by the way. But basically my dinner table, strange things happen to my kids will be amazed that being a doctor. Dad was keen to talk about sex. And this in the 19 mid 1960 country dinner table.[crosstalk 00:14:52] I’m not telling you that detailed Karma Sutra stuff. But dad being a doctor, he really couldn’t say no.

Paul Clitheroe:                  The other thing he also hates, he actually would argue he wasn’t particularly good with money. But you’d also argue that as a doctor in a country town, he earned enough money in a sense that living in a place like Griffith where we paid $13,000 for a house is that the lifestyle wasn’t that grand. Right? So if you’re earning a decent income in a country town, bluntly, it’s hard to get back with. My Dad probably couldn’t spend more than a year if he tried. He used to go to the rotary on Tuesday night, which I think was $5 for a [crosstalk 00:15:28]. [inaudible 00:15:30]It was a life he loves.

Paul Clitheroe:                  But the other thing is that he wondered that he knew that myself, my sister would be beaten in those days. No contest. We were going to a city for a university. I don’t think he was. He was sort of wondering, well how are they going to get by in the city? And so money was a subject of conversation at the table. And so not in the sense of iron this much. Kids aren’t great but more in all, look guys, we need a new car next year.

Paul Clitheroe:                  Now if we’re going to do when you can’t my mom might’ve been keen to go back to England now. We kind of not really you kids decision, but we want you kids to know that mum and dad but this is not an argument rather way. Mom and dad are having a conversation with you at the dinner table about, look, will a car live another year and do we go back to England next year?

Paul Clitheroe:                  And so what I heard around the dinner table was I heard that you could only have staff if you can pay for it. And I thought that was really interesting. Then dear old dad, I’m the side and Dennis why I bang on about this so much on every TV, whatever data from the side of that, they’d buy probably the equivalent back then of about $100 a year worth of shares for myself. My sister and I often interested if you’ve ever wondered why, because obviously at the end of the day I think most of us can’t pick shares.

Paul Clitheroe:                  And so a very low cost managed fund or an index fund, vanguard, whatever, something. It’s probably the way we should go, but dad said, “you know, they weren’t silly”. Vanguards wasn’t around in those days when dad decided that he and mum decided they’d buy shares and stuff. Myself and my sister we knew, so they bought shares and stuff like Coles and woolies and BHP and coke and we banked with National Australia Bank. And so they bought a few shares in national Australia Bank and then they added our Christmas money to it each year and they encourage grandparents to add to the Christmas money to buy a few little shares. Now by about ICO, I thought this is the world’s most boring crap until I was 14.

Paul Clitheroe:                  But it is boring. Yeah, it should be about 14 now. I think this turned into a couple of thousand dollars. All of a sudden I’m thinking when I took country kids public transport and I’m thinking turn 17, get a car. But by the time I got to 17, so it’s a bit like people getting interested in super at the magic word. Days sees we when you’re super, it’s 100 grand, all of a sudden you pay attention, but all of a sudden all that. Hang on a sec.

Paul Clitheroe:                  There’s like, what’s going on here? He’s not mom and dad originally putting in 50 bucks, 70 bucks like why have I got this amount of money? And so I became really quite interested and then of course immediately chose commerce as one of my elective subjects for years. My last three years of school and then immediately decided I’d do economics. And so you’ve got this weird situation where I think if mom and dad would thrust it down my throat, I would run for my life. But it was never done like that.

Paul Clitheroe:                  It was those days was all male. Oh your dividends. And obviously dad and mom take the dividend reinvestment box and dad would say just quietly, I by the way you’d be happy you’ve got another three shares out of your dividend. And if you didn’t want to talk about, they wouldn’t talk about it. SMART ICT and so I think for years and years and years it was left unsaid at the dinner table.

Ben:                                       Where did you pick it up?

Paul Clitheroe:                  I honestly think it was 14 years old. The dollars in the bank. Look, I hate to tell you this, I’ve got a bad feeling. That’s true. It was the money tangible but also, I think the old man said some funny things to me. He used to like his math and he said to me one day, every time you see one of your mates buy a can of coke, you’ve just made a billionth of one or something that I thought that was pretty funny. I think I used to annoy my mates in the school Grad.

Paul Clitheroe:                  Excellent. I’ll make another million. I still think that now. Like, I mean we’ve got some people coming over Thursday night for a barbecue and I went and got Watson Grove for the barbecue. And Janet says, “Oh, we’re going to go Dan Murphy’s or two. I think it’s a liquor wine or something like that, which is the cult. I said, “We’ve got west farmers”. She’s quiet. Got to the spot as opposed to a Dan Murphy’s because we don’t know. Well, it’s behavioral. Very long story. I think the message here is that in terms of behaviors, people say to me, “Oh, if I do pocket money with my kids and if they save half their pocket money and all that. If they’ve got a long term goal, if they save $3 over three months, I’ll add three”.

Paul Clitheroe:                  That’s all cool, but we’re absolutely convinced in my world of financial literacy that it actually is not what a parent or grandparent says. It’s what you do and by the way, what you do can be bad as well. Because again, money, sex is no longer a taboo subject around the dinner table. Fifteen year old daughter or son, I think safe sex and this sort of stuff. I think all parents are okay, but how much do I learn or are we in trouble Monday?

Paul Clitheroe:                  It’s because if you’re doing really well, you don’t want your kids at the wrong age boasting in the playground and I don’t think you want to say blah, blah, blah. But the thing that we’ve got to do is, and if you want to shape and you want to, I know this is not brainwashing. But if you want behavioral change in your kids and grandkids, you actually have to open up a bit and it could be the bad stuff.

Paul Clitheroe:                  I hate to tell you this on the light on my credit card and I’m really light on my credit card. Oh, are we going to lose the house mommy or daddy? No, we need to talk about this. I’ve made a mistake here. And the person is wrong. It’s over a piece so maybe it’s a purchase plan on furniture you don’t know.

Paul Clitheroe:                  But the thing is we tend to hide the good and the bad to protect our little valley and I just think it’s so. I’m not saying frightened the daylights out of the children or grandchildren, but also that make it seem too easy. Because money isn’t that easy. So it isn’t only the better stuff that we do it. I think it’s also the mistakes we all make. I remember one year they go accidentally put a bloody because I tend to sit on a number of boards and have done for decades a bit of money appear in the Superfund.

Paul Clitheroe:                  I’d already put the maximum in. So it was about two grand over about five, six years ago. If you made an over contribution, It was a financial catastrophe. It cost me thousands of dollars to fix this $2,000 mistake. But the kids are going, what are you on about? Oh, you’re not going to believe what a dick I am. Kids or young adults the stage come on there. You have the money. Well look what I’ve stuffed up this transcript.

Ben:                                       So if we were sitting opposite your kids, what would they be saying? The same sort of conversations that you’re having about your parents?

Paul Clitheroe:                  Yeah, absolutely. We bought chairs for each of the kids and myself. By the way, that little bit of money my Mum and dad put aside when I was about 27, that attorney to $32,000 and the car. No, I never did. I think the old man said, “Don’t buy one son, borrow mine” I thought that was good to adopt. The cabinet had electric windows. My Dad always followed. One of the few terms I did invent many moons ago and he’s just thinking the third money show which is, drive the cheapest car your ego can live with. My Dad was a very low ego person so it was a red chip that…so basically, we do.

Paul Clitheroe:                  We did do the same with our kids. But with that, why that 32,000 stories so important at 27. I’m married to Vicky to start APAC, the $20,000 each so that, that 32,000 gave me the $20,000 to start a business and the $12,000 leftover. And I was working as a school teacher. We saved a bit of money but the 12,000 left over we added to the bit of money we put aside and allowed us to buy a tiny little semi on a very busy road in our time in Sydney.

Paul Clitheroe:                  And without that 32, we would have done one or the other and to be quite blunt with you because we were thinking about children. We probably would’ve done the property and I may never got a chance to open my business which is without any doubt the single best investment decision I ever made in my life. The business says, well, we’re taking here is we’re talking little things that we’re talking openness, sensible openness around the dinner table with kids and grandkids.

Paul Clitheroe:                  Examples of, was doing things wrong like my superannuation and doing things right. I went online one day when I was…I did a thing or negative thing on today’s show about the find your lost super. And my middle daughter, she’s a lawyer, so I trust her Jodie. So Jodie, I think typed in, I’m lost, Super Paul Clitheroe airport last $2,200 now.

Paul Clitheroe:                  Embarrassing. So it’s all that sort of stuff. It’s awareness stuff. So, and that’s probably, I’ve said a lot about this. But it’s such a critical issue. So it’s just really about it. As money becomes invisible, it’s critical. We parents and grandparents try. We can’t provide visibility in the form of a $20 note and you spend, you get $10 back. But with tap and go and so on, we’ve got to try and provide visibility around.

Paul Clitheroe:                  At the end of the day, you’ve only got so much and you can buy any amount of staff and you can go break real quick. So it’s our responsibility to work with kids. And that’s why the government, the stuff I chair is so heavily involved in this. Every government in the world is doing this because as money becomes invisible, how the heck do we get people any sense of transparency and organization of your money?

Paul Clitheroe:                  We’re talking about how do we summarize because we’ve just launched a new book around money management because this is the curse side from year sitting in front of people. And assessing their ability to organize and manage their money and make us see it’s frightening people in terms of the people who are even heightened from high net worth. People who can’t tell me it’s $500,000 incomes, I can. We tell them that I can’t get through the worst of the worst. You can only go 500,000 a year.

Paul Clitheroe:                  And then one recently said, “Oh my mates are 900 and he still struggled with” And I’m like, that’s just not correct. Like that is just absolutely drive the cheapest car I can live with. Clearly ego has to have an experience of the human condition and this is something that we battled in the world of financial literacy. The human condition we live with and we know this nearly every other creature that lives on this earth.

Paul Clitheroe:                  As winter approaches, they store things taken out. Take whatever you like. You’ll actually see behavior around survival somehow in human DNA, particularly in my lifetime at 63. So I’m probably one of the 63 year olds and unusual species we don’t know in the history of human earth. When you could find a 63 year old male that hadn’t been involved in world war. So I missed Vietnam by about three years. I was just a bit too young for the birthday call up for Vietnam.

Paul Clitheroe:                  So basically and then we’ve had this 25 years of economic prosperity and I think what we’ve done is a bit like aunts living in a world where there’s always food and maybe they’d forget to store food as well. But it’s just extraordinary that it actually, you will get this one all the time. I get people who are like, I’m poor. I’m on $35,000 today. Can’t save like, okay cool. I understand that, but you’re going to. But the second aisle and $5,000 more, I’ll be saving because I’ll move from needs to wants. At the moment all I’m doing is, I’m paying rent, basic clothing and basic food. Now they are needs. Okay. A hundred percent elite sympathy with that shelter, but they all say the second I get five grand more, you see me in two years I’ll be saving.

Ben:                                       They never wanted [crosstalk 00:27:25]

Paul Clitheroe:                  You know what, Foxtel becomes a sort of a need, not a want. And that’s what happened. I didn’t sort it by the numbers you’re talking about so far off the stratosphere. They don’t apply to very many people, but right through our community. The human condition is we will always spend 10 percent more than we earn, no matter how much we earn. And the only way humans tend to save money automatically, is if someone is on a big salary. If there salary increases rapidly each year, sometimes they can’t spend enough to catch up for a couple of years. It’s the human condition.

Bryce:                                   We’re not designed for some reason, we’re not designed to save.

Paul Clitheroe:                  At that first investigation you did for the federal government. I think it was about 2007. Yeah. So I actually studied that in detail and did a presentation in early in our business to people. Because the thing that shocked me, I started as a mortgage broker and I was going and doing house calls. And I was just like, oh my God[crosstalk 00:28:28]. I was seeing relief and like, this is a serious problem and I was out in the mortgage belt. So when I moved back to Melbourne or that sort of widdle away and I’m going into all these different houses and it’s the Harvey Norman interest free. And we’ve got the big screen television and I can. And we’re tidying up and debt consolidating. And I said, I don’t want to be back here in six months time.

Paul Clitheroe:                  Well guess what, that phone call and I said, So this is a massive problem. So I started looking for some of the research on it and I’ve found that and what was fascinating about that report for me was that when I was a self-assessment report, right? So 89 percent of people said that they manage their money wealth.

Paul Clitheroe:                  And I’m sitting there looking at that. And at the time also we had a fairly hard debt to income ratio. So a lot of household debt at the time and I’m sitting back going, if you ask someone what they are good with money, they’re actually telling you they are. But I don’t know where the solvency is actually good. So there was some other fascinating insights into that particular. And I think that was the question. The question was how are you good with money because you have enough at the end like there’s a little bit of surplus left at the end of the microphone.

Bryce:                                   I think you raised a good point before your ability to have that delayed gratification. I like to let that money sitting there from $200,000 at say 14 to then turn into 30 odd thousand dollars. And then to execute on that for better opportunities speaks volumes of your decision making around money. And I’m now fascinated about where that work is going with the government. And seeing you’re getting into schools and into those types of areas. Can you share with us a little bit of the work you’re doing in that space to sort of tell us how you’re doing that? To sort of say, hey, just having $1 left over that is not sustainable. It’s as you’re talking about before that human condition?

Paul Clitheroe:                  Yeah. So for 30, 40 years now we have some, I don’t know any easier. We’ve managed to get money skills into the national curriculum sites now. Core statement of learning. Because what you can do is you say you have many united. I started out doing this as a pretty enthusiastic. I’d go out to schools and say, can I give a talk to the kids? And I think many people in industry to do that. And they were all well meeting. And what happens is, the teacher lose enthusiasm. You get busy. And the reality is, I think you’ve made a tiny difference, but it’s not a sustainable difference. So what I was keen on is that what are the sandstone blocks? What’s the stuff we can’t do? Fourteen years ago, the department education did. You can’t do that. I learned very quickly. We’d all love money.

Paul Clitheroe:                  Schools are separate subject matter, but we’re being naive. Am I getting the financial planning industry site? It should be an hour, a week of money skills. Well, so should obesity and social, the environment, come on, let’s grow up kids. Let’s be a bit mature here. You can only move stuff that you can move. And teachers are flat out teaching maths and English and there’s a few other things you’d like to learn as well.

Paul Clitheroe:                  So basically we ended up getting a broad agreement about a decade ago that this was just a fundamental skill and we’re in a sense, it probably had an advantage over say obesity or the environment which are really important issues. Kids that are eating well and the environment is really important and crap food is cheap. Let’s not even go there. So basically you’re right. But the financial literacy that we could show that the partner education is that fitted the curriculum.

Paul Clitheroe:                  So in math, if you’re mucking around, adding stuff up, you might as well add up. Don’t listen if you’re teaching commerce, we’ve always taught very quick example. We’ve always taught compound interest is mummy rabbit rates daddy rabbit. Now when I was growing up in Griffith. And I remember sitting in first year of high school looking out the window and the teachers droning on about mummy rabbit and thousands of the bastards.

Paul Clitheroe:                  So that demonstration of compound interest coming home one day saying, what does rabbit thing talking about kids. My kids are about third grade and they’ve been taught that mummy rabbit makes daddy rabbit. And they both looking at, we didn’t have a rabbit, thank God. Think the neighbors had white rabbit with Pinky is DXC and the kids just weren’t getting the company. So basically we now do compound interest with.

Paul Clitheroe:                  So we’re teaching the same principle but what they now do is rather than rabbits, which used to work beautifully and rabbits, reverie of compound interest, you want your money to be like rabbits three times a year. So now what they do and how about mommy or daddy takes a cash advance on a credit card and how stuffed Eileen in two years. Or mommy and daddy misses one repayments on the purchase plan with the retailer and they’re paying 36 percent. Or mommy or daddy puts an extra $10 a week into the mortgage.

Paul Clitheroe:                  How much better off Alec? So what the kids are now doing is you see we haven’t distracted the teacher from learning in things like commerce. The contract whenever the kids need to understand contracts for anything with business and the way I was taught was you need to maybe understand a bit about the law of torts.

Paul Clitheroe:                  So you’re looking at a 14th century property contract. Now what I keep today is going to really stimulate. Some other churches are doing now is just go home and find your phone contract and the kids go, oh bloody yelp. Parents go like where is the conference? So eventually they come in with their contract and they learned contract around their phone contract and then the assignment is take that contract. Now document your phone habits for a couple of weeks.

Paul Clitheroe:                  Now find a contract that puts money in your pocket. Now that is much better learning. We’ve got contract, but we’ve related to that not to a 14th century English factory. And so what’s happening in the curriculum is what I call it. I think it is a behavioral concept because they’re learning all the stuff they need to learn in math, but they’re getting examples that relate to me and in English.

Paul Clitheroe:                  If you’ve been asked to spell wombat or kangaroo at a certain age, there’s no reason why your spelling list that have the words compound and interest on the way you’d put kangaroo into a sentence. When you learn how to spell it. Put the word compound interest into a sentence. So what we’ve got is, we’ve got a really simple situation which teachers tell us that aiding learning and that I think is sandstone stuff. I think that’s actually because the teachers aren’t distracted from math or English but what the teachers are telling us is they’re getting more effective.

Paul Clitheroe:                  Now people are into this stuff. Just scatter the asic website, go to money smart and look at the teacher’s area and you’ll actually see what kids are learning. You’ll see it’s all increase when you give something to the partner. Education. They’re incredibly good at this stuff. You know what a kid is learning in kindergarten across the six levels of learning, teacher resource packs, you name it, but don’t think we’re distracting teachers. It’s fitting into teaching core subject now.

Ben:                                       I think that’s pretty exciting. So how far have you infiltrated? How easy or hard it is?

Paul Clitheroe:                  It’s a nightmare. It’s really challenging. A chairing of financial interest. The body in charge of strategy and financial literacy at the end of the day is all about really spending less than you earn. We’re still running budget deficits, right? What I really like at the moment is about $300,000,000 to try and every teacher in the country. And you may think, how does that work? Well, there are hundreds of thousands of teachers and it only inverted commas costs maybe a thousand dollars to train a teacher. But then the headmaster headmistress quite rightfully says, “If you’re taking my teacher for three days, where do I get the $500 bucks for the replacement teacher for the day?” And so basically to be quite blunt at the moment we’ve only trained properly.

Paul Clitheroe:                  This is all in the asset reporting material, but if anyone’s keen to read it, we really only trained a bit over 10 percent of teachers. We are trying to train the trainer. We do have schools that were calling sort of our money schools which are aware. But in a sense we are probably relying more than we’d like to on training the teacher becoming the advocate in that school.

Paul Clitheroe:                  We’ve never appeased the testing around financial literacy, which is good in schools that aren’t tested. They weren’t teaching it. So it’s good. That part we were fourth last year. Beijing killed us by the way which doesn’t surprise me. Greatly that there’s some people who are smart with money.

Ben:                                       But Australian kids are going to fit in with your agenda. We need to get to that way. Great. Parents and grandparent.

Paul Clitheroe:                  Correct.

Ben:                                       So we’re doing a lot there.

Paul Clitheroe:                  That’d be probably the latest thing that universities are increasingly doing. They’re not calling it financial literacy, they’re calling it money skills as first year subject matter. I hold it over the chair in financial literacy at Macquarie Uni and there’s quite a few of those around now, which is in a sense, it’s funny really. I’m not really fussed about the next Gen. it’s like when I’m dead, I’m actually not. I’m less fussed about the next Gen. I think we are equipping the next generation. The people I’m really fretful about is me and my 8 million paid mate. Your mortgage building[crosstalk 00:37:19]

Ben:                                       What is the biggest challenge for them?

Paul Clitheroe:                  Well the number one is let’s not get too negative here. As you probably saw in the latest Credit [Suisse 00:37:28] report. We have Australians now as an individual, the richest people in the world and I honestly wouldn’t know Australians. And then you go to the World Bank and you’ll see that Australian adults currently the mass negative people in the world. Which I find really fascinating.

Bryce:                                   And I think we’re the third most indebted or something like that.

Paul Clitheroe:                  But putting all that aside though but thanks to compulsory super and honestly we’re not want to hear Australians wining about the state of the world and they stayed at our health system. I do these calls to the Syria and you just dumped a couple of dozen Australians there for a fortnight and they feel better about everything. But basically I do when people are telling me it’s all terrible, blah, blah blah. The end of the world. I started for God’s sake. When did you last see an old car? Like my first car was a $300 and I had to push it every week. And you play spot the old car. You talk to your grandparents about the house they lived in. I mean I lived in Griffith because of my dad. Our toilet was separate to the bathroom. The that must’ve been a toilet out on the back deck which got enclosed, so we had separate toilet to bathroom and it wasn’t the outback done in close.

Paul Clitheroe:                  I’ll say, well look, if you took right, if you tell them my kids have a property existed with one bathroom payment cycle, we can. We just open our eyes. It’s pretty damn good. It’s not perfect. There’s illness and drug problems and domestic violence and stuff. But you know, but it really is pretty damn good and I just like people to take a little bit more responsibility. Everything is not someone else’s fault. It just is a health system to deal with x million people eat perfectly.

Bryce:                                   No it’s not.

Paul Clitheroe:                  But the thing is if I get run over on the street out here, I would rather get run over in this country than just about any country on the planet. They want a busted myself up, yacht racing the other week and last part of the finger and blah blah blah.

Paul Clitheroe:                  Within an hour or so I’m getting world class treatment in the public system at no cost. Like seriously. This is like seriously so all I’m saying is I think at the moment people want to make this point. I think too many people are saying our donor and enough it’s someone else’s problem. I haven’t got enough in super. It’s someone else’s problem. I don’t have a big enough plasma screen at someone else’s problem and I just think we Australians are just lost. The plot a little bit more perspective. I really think we’ve just forgotten that. I’m just encouraging people to lift their heads up. You must be listening to my rant because I’ll just look up. Just look out equals 27 years now of positive economic growth, like 27 years of life changing. Our standard of living has definitely grown.

Ben:                                       I’m with you in the sense that we don’t want the rich to get super rich.

Paul Clitheroe:                  No we don’t and we don’t want that middle class to die. That’s absolutely critical and our view has always been in our business. We specialize in property and tore three comfortable, 22, 23 properties. Excessive donate them. Just it’s the passive income is supplementary, 100,000 or $2,000 a week in our book in terms of trying to say to people that are comfortable. And that’ll give you enough opportunity to travel overseas, have a new car and just enjoy your lifestyle. That’s different to the race to the millions and the billions and all of that type of stuff. It’s just not who we are as Australia doesn’t happen. I mean I get people know, so why are you still working?

Paul Clitheroe:                  And I say this it basically gives me a hot tip and I go, why do you think I’m still working? But if I’m meant to be, oh, but you’re the investment person. And I go, well, I can’t be matched. Good cannot look. I say I wish I’d bought third hand by the way. I’m still watch my pennies. I had a perfectly good third hand sailing boat down there but it’s in the budget.

Ben:                                       This budget for how long was it taking? Surely at some point that you probably are making wild assumptions here, but it’s probably just to keep your mind taking over rather than the necessity to work at this point in time.

Paul Clitheroe:                  Yeah, look that. That is true. But I think he got a thing called the Clinton Foundation and the other advantage of me working is that you are right. We actually don’t want to be put your honesty. If I had $20 any more than two or three properties, just managing the bloody things drive me insane. Look, I’m not interested. Okay. I’ve got no problem with property, but let someone else do it seriously. The other thing about working is that it means the money can go into our foundation and our foundation provides scholarships to young Australians in medical research and the arts and so on.

Paul Clitheroe:                  And so another advantage of working is, but say you’re looking for one. Kerry Packer said you miss one day I want to solve the APAC. And Kerry said it. I said, he said. And he said, “You may have a little bit of money now.” And I go, “I think it’s quite a lot of money Mr Packer.” And he said, “Call Me Kerrie”. “Yes Mr Packer”,  I’d say, but he said, but I said, you look for the way I live. He said, Sandy, never forget. They said, Sammy said you can’t even afford a 10th of collegiate. And I thought about that and I went home thinking why would I want to live here. Like, why? Exactly. Maybe when you get to that point in your life at my sort of age you can afford to fly business class. And I reckon that’s pretty flat.

Ben:                                       I don’t really get some of these. And the other thing I do notice, and you’ll notice this, it is absolutely where the behavioral economists are, right?

Paul Clitheroe:                  If you’ve got next to no money and you cannot feed the children and your health and your teeth are falling out, that is miserable, absolutely miserable. But there aren’t many people in that situation. Australia really realistically. So basically, though we don’t need to get much money where you increase in happiness for the extra dollar is marginal. And for those who are competing to be the richest person on the planet, they’re always miserable because there’s always going to be someone with a bigger lead or a bigger whatever or a shiny or whatever. Or if you’re going down that big shiny route you’re on, you’re on the road to unhappiness.

Paul Clitheroe:                  Because I look and I think by the way, the happiness number seems to be no more than about 80 or thousand dollars a year guys. But your marginal improvement in happiness for each extra dollar and above a couple of hundreds. It is sometimes a negative improvement. Now it really is big. Then you start to see shiny toys and everyone’s got the biggest shining toy.

Paul Clitheroe:                  Then you have to look, I got the training here today and walk down your street. So to me, if I could have afforded to have a limo to come and pick me up and pay the 60 bucks or whatever or uber or something flashed yesterday. So I asked you the question, of course I can afford those things. But I felt better as you can see me in a pair of jeans and a black tee shirt. I felt better getting the training and walking down your street and buying myself a $3 or 30.

Paul Clitheroe:                  I think it’s how you feel about yourself. And I’m not saying how I feel is how other people should feel. All I’m saying is, if you get yourself on this, it must be bigger. It can’t be business class, it must be first class.

Bryce:                                   Was it early in the career that you were chasing the shiny objects and you pivoted or was it consistent?

Paul Clitheroe:                  Now, I look at it, but it’s easy to say this because I came from a family. There was only two children in a family where we were with dad, a doctor at home. Mum used to be a nurse and stopped to bring up myself and my sister up. So, I had this really very stable background and so we certainly didn’t have a lead yet and we certainly didn’t fly business class. Let me tell you but there was never…I didn’t ever lack anything.

Paul Clitheroe:                  Like, if I needed a new push bike usually for Christmas, there was a new push bike. And so when I went to uni and mum and dad are happy to pay my community college things that New South Wales Uni, they were happy. Dad was pretty clever actually, as was mom. I think they gave me information about uni and colleges. It’s three meals a day and your room, so you don’t want anything.

Paul Clitheroe:                  My Dad obviously helped me out with the books and that was fair enough. I think they gave me just enough money to buy beer about two nights a week. Which meant I needed a job because that’s not enough. Because maybe a group of boys, I used to make my living picking oranges on. Then when I got to the legal age, I got a job serving beers and the grip of leagues and I could work in air conditioned comfort, which I realized was better than picking orange six degrees. If you’re not experiencing these things, you don’t look it.

Paul Clitheroe:                  I did decide that picking oranges was not my future career. I lock the lid.

Ben:                                       You have the conversation at the dinner table and that sets the standard, right?

Paul Clitheroe:                  The opportunity costs. Do we buy a new car? Do we go back through England? Those types of things, right? It’s making people who grow up in an entitlement and all that. I have made the excesses. They don’t make those choices. Everything comes to them, but that’s not us. That’s not all of us.

Bryce:                                   As some key things that you said is having that conversation at the dinner table, that happiness income, sort of two key takeaways. Where they do say that I’m in. It’s only experiences that they say I’m in. Jerry Harvey also talks about how he goes after 10 million. Now that’s still a reasonable number. Right? But he said the difference between the lifestyle that you live at hiring 10 million to a billion is irrelevant.

Paul Clitheroe:                  There is just no different solar guys. Look honestly, stick with you. Stick with your friends, with your family, invest in relationships and you know the things that make me happy now. Like if I couldn’t afford this $3 cup of coffee, I think that it wouldn’t be critical. It’s not a need. It’s a want, but I’m glad I can afford it at this stage of my life. But those things that give me joy at the moment is my uni mates, my schoolmates, my wife, my children and grandchild coming next year. My son Marcus, funnily enough, guess what happened?

Bryce:                                   Of course, because of what he learned didn’t tell table.

Paul Clitheroe:                  He works in the IMCO and so you’ve got an economics and master of economics and it’s just fascinating watching that in my next door. Did a law degree at Sydney and the economics law and it’s kind of fun. That and the fact that I’m pleased to say my baby daughter, the 24 year old, “She said, oh my God, you a lot of sad. Got The marks to do the Lord and stuff”. She said, no, I’m not going to do that. So she did a media comms and of all things is I’m just finishing off a commercial helicopter pilot’s license. So now I’ve actually got one interesting chart.

Bryce:                                   Listen for you. You mentioned before there was $32,000 was critical because 2012 was for the task, but what was it like back in those days? Because those are sort of looking back at your bio. You talked about you pioneered fee for service and refunded commissions back to your customers and you are one of the first. You have to do that. So can you sort of take us back to those days? What was it like? Backing yourself to do the business that there was two of you, I think that came in with a $23.

Paul Clitheroe:                  No, that was actually a group of five or 2100, 100. And then we took a serviced office in a level 66 of MLC center in Sydney. I understand that it’s still a service that can wait now. This is 34 years ago. I think it’s still a serviced office. Basically I think none of these changes. It is a bit of a planning thing. So at that stage working as an investment researcher, the wonderful or ruin Ebay as an economist in Canberra. Savannah had a law degree and was a chartered accountant and cooked finished her MBA.

Paul Clitheroe:                  And I also had a computing degree and we really thought between the group gone sort of a bit of investment knowledge and economist and lawyer. And we said, we don’t know anyone. I was 27, the others were about 24 and so basically we, either way, if you’re wondering why the these four guys who are much smarter than I am, I’m a tooth ranking’s and appear. She’s Indian background schools in Australia. I’m the basic. Back then we were like, we were less inclusive society, neck to be polite.

Paul Clitheroe:                  And so the guy’s very intelligent in their business plan. They write down, we need a token white. This is reverse discrimination back myself. And I thought this was absolutely as hysterical. Even if you go and get an old copy of the financial review back in those days, I used to call us APAC, used scores, Indians, Pakistanis and Glybera. We didn’t have any Pakistanis but let’s not get overly.

Paul Clitheroe:                  I look in today’s world. Some of those comments won’t work, but I am allowed to like crap on myself. Correct. And so basically, these guys are just, and we’re still best mates today. By the way, I’d answer your question, like one of the reasons we are best of mates. We didn’t start the business actually to make money. Our view was that if we’re smart enough, we worked hard enough. We didn’t, we felt that you would make money, but what do you do when I was the only one who really had a job. So the only people we knew were our uni mates and so well what do we do? And we said, well look, we knew enough about research and market which with all the modern portfolio theory at Uni and we really thought this selling stuff was just hopeless.

Paul Clitheroe:                  We couldn’t see half a tech scheme paid us 30 percent and this is six percent and the right advice was to pay off your mortgage, which pays you nothing. Well, how do we honestly feed our families unless we do what is maybe not. So we really felt. I sit on the client side of the table. The best way to represent the client was to charge the client a fee.

Paul Clitheroe:                  And we always knew that wouldn’t appeal to anyone because people would say to me, “But Paul, you know, we can give advice for free.” And I go, “Of course you can get crap anywhere for forage”. Crap is generally for a go for your life. And so this fee thing 35 years ago, four years ago, it was pretty odd. We never thought we crack a large part of the market.

Paul Clitheroe:                  But the advantage was that we could go into a young friends in legal and accounting firms. Went through uni with and we can say, look, we qualified as you did we charge the way you did. We know you probably won’t, but if your senior people in the firm now our client. And so we couldn’t pass. Also two years by the way, didn’t work very quickly.

Paul Clitheroe:                  My wife decided to put off having children wait two years and kept working as a school teacher would have staff. But when people started to come in and they realize the value of what we call proper advice, which is stuff you pay for. And so therefore, if you were going to put them into a share versus paying off their mortgage, at least they were going in for the right reasons and it was always a harder story to be quite blunt. But the amount, again very quickly is where the money came from because we had no money.

Bryce:                                   How did you market now back then?

Paul Clitheroe:                  And people today will be sort of, a bit horrified by the difference in the world was back then. But back then there was no money sections of newspapers. It was nothing, just nothing.

Bryce:                                   Okay.

Paul Clitheroe:                  This is 1982 or three. There’s just nothing out there. Anything in the papers was about a share price. Three percent of Australians own shares. I’ll say that again. Three percent of Australians own shares. Not that long ago basically. So we started writing these and percentage now of 56, 57, including[crosstalk 00:53:11] And also some other the mutualization is the Commonwealth Bank and so on. So some people got shares. You may not have bought indirectly but basically the issue for us as well. How do we got marketing budget? We were struggling to pay the secretary on Thursday and paying out serviced office fees instead of paying us.

Paul Clitheroe:                  So we’ll have myself in particular start on a typewriter so I can quickly type up these things talking about people and money. And we would round those off and no one will understand under about 60. Otherwise we’d get some copies and we did have a fax machine. And so you’d fax with journalists and after about nine months later, nothing happened. But sooner or later a journalist has got an editor saying, but get me a story in the next five seconds.

Paul Clitheroe:                  And so I started doing a bit of money talking to GB in the early 1980’s. And then that led to the APAC road because we were always a research background. We wrote a report explaining why estate mortgage is going to collapse. Along with Steven De knight, quite separately, wrote a similar report for his firm and we both publish those reports.

Paul Clitheroe:                  The van Eyck report, which Steve wrote and our APAC report saying estate was going to collapse. What we didn’t realize was that a state’s got lots of money for nasty lawyers and we didn’t. And so they decided to focus more on Steve I think. Steve and Eric because he was one and we were five. But Steve will tell you this story. Steve was literally lined up including worried about losing his house. But luckily for both of us, estate mortgage did collapse. Lost half a billion dollars of retirees. Do you remember like what it was in 90?

Bryce:                                   It’s just like a bank or building society.[crosstalk 00:54:59] The usual crap happens to us.

Paul Clitheroe:                  And then I ended up on four corners with Steve and they were saying, so how do two very intelligent people know they were going to collapse? Aren’t you geniuses? And we were going, well not really. I said, can you explain what every other board is trust in town was offering 14 percent? Interest rates were much higher back. Then turn deposit with 16.

Bryce:                                   Correct.

Paul Clitheroe:                  Very different world. So these are all offering 14 percent estate mortgages offering 22, 23 percent. We’d meet estate mortgage and say, how are you getting 22, 23? We know your costs to three percent. You must be lending money at 26. Who’s paying your 26 when the banks will end at $6? Why would I pay you 10 percent more? And all state would say is, “Oh, well we’re much nicer to deal with”.

Bryce:                                   So you’re telling me how had that we go out and see some of your property developments?

Paul Clitheroe:                  Oh no. Commercial in confidence. If you see our property developments, you will see how clever we are. And of course there are holes in the ground and dodgy evaluations. And so after about three minutes, Steven Meisel, for this might have been our program and they’ve gone well that’s it. Well yeah, we’re offering 10 percent more than anyone else that’s got to be crap on the portal for foreigners. Can we expand on that a little bit more outside people like Kerry pack of soul that and thought it was.

Bryce:                                   I think Carrie, I should. Oh, sorry. Carry on.

Paul Clitheroe:                  I literally got a phone call from nine one day saying, I would like you to do the money shot for us. And I said, well, there was the money shot. And they said well, when do you want shoot a pilot for us? And I said, what is it? It’s always going to be about whatever you want it to be about. I’d like to tell people if they’re buying a $500 fridge, they should negotiate to save money. They should negotiate with their bank for better rights. Which is a quarter century ago. It was unheard of. And so anyway, so channel nine got me in and I got to meet Kerry packer and then I say terrifying.

Paul Clitheroe:                  He was lovely by the way. David Lackey and Peter Meakin and the guys there at the time. And so we shot this pilot and Carrie she didn’t like the pilot and David Lakey apparently.

Bryce:                                   That look, what’s the pilot?

Paul Clitheroe:                  It was about me. Put 20 bucks in your mortgage and all my students Kerry said, “Oh, if it’s site, even Australia has got a six pack of beer in the fridge”. It was his guy banging on about a David Lakey to his credit. David said this in Pakistan, fine your call Nikki David Lakey ran it and it was the number one show a night. The week, the year.

Ben:                                       when did the thing just exploded?

Paul Clitheroe:                  But the funny thing was I got back and they offered channel nine overall free, offered to pay quite a lot of money for me to do this. And I got back to this really weird thing happening. I don’t want to do this and Savanna, we should do what I saw this TV show that nine wants me to do about money. And basically, they’ll promote it. They’ll put Paul clitheroe courtesy of APAC and they’ll pay us quite a bit of money for doing it. The Guy said pious.

Paul Clitheroe:                  Anyway, so basically the guys packed me off into. We all thought the show would last. Kerry really wasn’t very confident about it. So it’s just too boring. So like it was too boring and the stuff we’re talking about. It doesn’t like what’s a mortgage and I carried and really don’t care. I carry by putting 20 bucks in the mortgage was a bit outside of billionaires range of experience and so we all thought it ran for six weeks. And it’d be a bit of an experiment in a bit of a dud failure.

Paul Clitheroe:                  And the only thing we had to do it on week three. We had to take the… I don’t like mentioning what I do and if you’ve seen me over the years, whether it’s money book or whatever, I don’t like promoting my commercial interests when I’m trying to be an advocate. So you’ll never hear me. So for a while they’re on the back of the chair. We had poor color Rps, courtesy of APAC.

Paul Clitheroe:                  We had to get rid of that in week three. Where do we employ six receptionist? How tall is he? Why doesn’t he wear a tie? And that’s the one clever thing. And she came from channel nine. They turned up my best suit and tie to film and I said I’m not filming that. And I learned something and they did this. They’re always doing surveys of 10,000 people. And they’d done this survey.

Paul Clitheroe:                  What do you think about this guy being about a 30 something sort of investment type? And he’s in a blue suit and red tie at about 80 percent complete bracket. And the second comment was he will overcharge us and confuse us. Oh, so the suit and tie, particularly the rental, the suit and tie in which I was so proud the public actually saw as a barrier. They actually saw that as expensive and possibly even misleading.

Ben:                                       Maybe misleading is too hot.

Paul Clitheroe:                  This person is going to confuse us. And I looked at that and went wow, that actually really was a survey of large numbers of people and that’s why to this day, unless it’s funerals or respectful weddings. But basically I’d never worn a tie since that day unless it’s respectful situations.

Bryce:                                   Yeah. I’m happy to register your audience. Correct. Respectful.

Paul Clitheroe:                  So I was really shocked that a suit and tie was seen by many people in the public as expensive and confusing.

Bryce:                                   Interesting.

Paul Clitheroe:                  I’m not sure if it’s on the side. That’s let’s way it was 25 years ago. I mean, most of our guys don’t have to.

Ben:                                       Bryce sanitized by the way, your legacies lifts through us because we’re the property couch. We don’t talk about our business trying to remain independent. So that’s good insights that a lot of your stuff is legacy for us. What was it like trying to juggle a business that was kicking off and television comedians because[crosstalk 01:01:01]

Paul Clitheroe:                  You might need my wife here.[crosstalk 01:01:07] Biggie said, looking at all for heaven sakes. It looks like I really bought into an ambitious things. I’m reasonably intelligent, poor girl. And obviously she would like to own a house. One would have liked to have owned a house one day, three kids to educate. She’d liked choices about how earning a bit of money was pretty good. The thing that she really was really owning a big bluntly. I was gobsmacked as well with the TV thing. Don’t forget no Internet, no Fox, we’ve got for money including the regions, would get 5 million viewers on a Wednesday night. Including all the country areas and blah blah.

Paul Clitheroe:                  And it’s not because, in today’s era it can’t do that. There’s too much competition, but there’s nothing else to watch basically. And it was about it. So I think the thing that was a bit amazing for Vicky and myself was just the inability to even go to a restaurant. Australians are very polite by the way, but just the fact that people know you, might want an autograph. But thank God there was no phones in those days. So at least it wasn’t easy to pick up the tab.

Paul Clitheroe:                  I think Vicky was a bit sort of like, what about the innocence? I’m learning a lot of smart women. Vicky said no, but obviously the impact on our business of the money show, the impact on an APAC was obviously enormously. Even though we never mentioned the APAC people. If there’s a newspaper article about me somewhere in the article, I think as you mentioned earlier that obviously I sold APAC some 16 years ago to ACCENT. Which is now part of IMP a long time ago. But people would obviously all, if I was doing radio to be pulled to the right from APAC. That would be the only one mentioned. But obviously the impact of a lack of that sort of credibility or people thought, oh look, I think that’s a decent, trustworthy sort of person.

Paul Clitheroe:                  And so that had a huge impact on our business and my wife could really see that. Well, hang on a sec. This actually is a bit of a pain in the butt to be quite honest. This is not really what I bought into. But on the other hand I can see the success the business is happening. And so if that means that I can make a choice about how the kids are educated. We can pay the house off. So I think she’s big. She’s one of those smart women which is why we’re still married and said this actually is not my number one pick.

Ben:                                       Otherwise you couldn’t do this.

Paul Clitheroe:                  She was more annoyed with the celebrity that came with all the commitment.

Bryce:                                   Now they look at it as the joy that it is that you the magic of TV.

Paul Clitheroe:                  Manage the money show, would have me every week. We’d run an overseas story. Then they might be just a bit, could it be the New York Stock Exchange or it could be something about a business in England. But what we do there is that for three weeks a year, we’d fly overseas and we’d try and film. We only ran about 26 shows a year and we would look to bang out 26 international stories in three weeks and then we’d come back and the magic of TV wasn’t well understood. You’re wondering in Pitt Street and someone will go here and tell you, you’re on.

Bryce:                                   I saw movie straight last night that film that a month ago I think. I mean you wouldn’t be my craziest stories.

Paul Clitheroe:                  I was on a virgin plane already playing an episode of my show. I’m at the front of the screen. People are looking at the screen watching me walk down, going that’s the I think they’d be a, as you guys do.

Ben:                                       I think that being a financial commentator or rich people are thinking, look, it isn’t a Hollywood star. You for God’s sake.

Paul Clitheroe:                  You probably a pretty boring person who’s talking about finance. If you really knew me at that level, that’s what I am as well. But I do think though that look, if I ever had tip for growing a business, having someone to pay you to do a TV show about the business it’s pretty good. I don’t see it happen too often. Guys now pull your rotting still a lot for money.

Bryce:                                   You’re the chair, the magazine. What are some of the more common questions that you constantly get asked about that you just don’t feel as dropping from an educational point of view? Like, you know, what’s that you have to do all the time that they’re just asking them?

Paul Clitheroe:                  Sign Christians like plays that we can get out to the viewers and the listeners. The magic pill people want the magic. I want to get common two or three times on York Street and not people being employed and yelling. But People are lovely actually. What I liked in Australia is that people respect your privacy. So people give you a glance and say hello but you’d get the same. But generally, people applaud. If you stop for a coffee, a person in the queue, will say like, I always want to talk to you and I’ve got a couple I saw.

Paul Clitheroe:                  Look downstairs and be nice to your mother. They are both very helpful for their reply though is give you. This is why. Do you think I’m still working there? Why do you think I don’t have a 300 foot boat in the Mediterranean? Just for heaven’s sake. And so the thing for me is that the absolute constant, it’s just spend less than you are. And I’ve got, look, you guys know as well as I do when you get times like this where you see property going backwards, you just think, well, hang on a sec. Where’s this going?

Paul Clitheroe:                  And it got the population’s growing, populations living longer, populations wealthier than ever. You think yourself all the down to owning property can mean it’s a good time to buy. And how many of these will live through? I’m much older than you. Two plus years I’ve done, but I’ve been in the profession.

Bryce:                                   So when it went to all humans want to buy during the boom, where do we want to sell? One of the things I do love about property, by the way, is that in a downturn, it’s hard to sell. So I got really cranky during the GFC.

Paul Clitheroe:                  You might remember Commonwealth Bank as an example. It was only a decade ago. When did Australian sell the greatest number of Commonwealth bank shares in the history of the bank? I went to about $23 to $40. So one of the funny advantage of the property is when the market turns to crap, which it always will, it’s a bugger of a thing to sell. I call it a self protective mechanism because the… Again, we just know that humans always want to buy it, boom. And they always want to sell in a bust.

Paul Clitheroe:                  And you say to yourself, why is that happening? Well, if you told me the Australian population was shrinking in size, our economy was going backwards. Wages, we’re going backwards and we’ve got population shrinkage. Sell your property as fast as you humanly can for anything you can. It is worth nothing. You guys are property experts, not me. It’s as applying to Matt asset. Pretty simple stuff isn’t really going to have 35 million people in this country in the next 27 years. We will probably continue to be one of the richest people on earth and with no death duties and stuff.

Bryce:                                   We have to be sure about that right now. One way of stopping the rich getting too rich money. And I’ll make you cranky now. I’m going to be careful. You might have to write about to take it, I’ll take that one offline.

Paul Clitheroe:                  But basically, it’s just this simple money stuff and this is why I can’t give you a hot tip. But my two adult kids have been in the market for a while and there’s a decent little downturn particularly where we live in Sydney. I said to both the adult kids, wow, this is your moment. And my son in particular as an economist, as he works at IMCO, my son said, “Dad, and it’s going to get worse than this, you know?” And I said yeah, but if you find the place you like and you get a decent discount. I want it used to be. I actually agree with you.

Paul Clitheroe:                  I think it will be worth less than in a year but you’re having a baby. Like you were talking about a 10 year deal and he’s a smart kid. And he said, “Well, you’re quite right”. He said, “In 10 years’ time, the population where we live in Sydney, it’s growing by half a million people in Retina, blah, blah, blah”. And he said, Crikey, said, look, you know, really, unless the economy goes back with little population shrinks, we hit by an asteroid and so I.

Bryce:                                   But I find it very funny that we get this mass panic, the lemming thing. Oh, the market’s going down. We better sell. Oh, the market’s booming. We’d better buy. I’m not sure how we ever trained people out of that fundamental human can. I guess this record, well but the evidence is so it’s just a human go to any.

Paul Clitheroe:                  I mean, I love stuff because I do love my economic history. If you want wonderful examples in history, you go back to when there was nearly a 99 percent collapse in property prices in Venice in 13 or don’t quote me exactly 13, 28, 30, 35 or something and killed nearly exactly 55 percent of the population in one year. And when you kill half the population, it’s a bugger for property prices.

Ben:                                       So you’re telling me you Sydney’s going to be two or 2 million people?

Paul Clitheroe:                  I really think property is going to be a truly shocking investment.

Ben:                                       Well that’s a conversation that we’re trying to have with people thrive. This podcast is. It’s a cashflow issue, not a balance sheet issue because if you can still have like the only thing that takes you down during episode. I’m biased as if you can no longer hold the property.

Paul Clitheroe:                  Correct. So if you’ve made a decision to buy and working out your cashflow still okay, that worry about paper gains and paper losses because if you’re playing the long game it’s fun. But like now’s a great time to rebound. Great asset.

Bryce:                                   But the point you see really essentially this question will come from what is a hot tip?

Paul Clitheroe:                  I don’t have one because if I mean honestly, I don’t want to lead you here tonight and Vicky and myself are quite happy with what we’ve got now. So, I’ve got a couple fintech companies I’m involved in where I’m really hoping we can do well. Out of those because I’d love to put that money into our foundation, which is part of my ability and my personal legacy and which the kids that are directors. And we’d love that.

Paul Clitheroe:                  We’d love the kids to be able to keep giving money away when we’re gone as well. So I would love to actually have another business success so I can top up our charitable foundation. That would be absolutely fantastic. In a sense, I am concerned about making money for that purpose. But I can’t do it in one, three or five years. All I know about money, is that if I pick a trend and the most valuable gains you have is the fact that every one of us is an economic miracle. Basically for each Australian who is born, who comes to this country, they buy bread, they buy milk, buy petrol, they buy a car. It’s called the aggregate economic effect. And each individual is just a little economic miracle.

Paul Clitheroe:                  It’s one of the reasons why I get all the population pressure stuff and I’m not going to get into a political divide. But one of the issues that I do know, putting aside the political debate and population pressure. One thing is, I do know every person who arrives in Australia, were born in Australia actually adds to the economic health of this nation. And so that’s why I’m a bit balanced on the population growth issue. But basically for me that’s why the only hot tips I can give you, the short term, spend less than you earn. That is the only hot tip I can give you. If you spend less than you earn and out, because the next question is, do I buy shares or property?

Paul Clitheroe:                  I don’t care. And the reason I don’t care is there is no evidence that either asset is particularly better than the other. So if you come to me with a bunch of properties, I would encourage you to buy a few shares. If you come to me with a bunch of shares, I would encourage you to buy a property.

Paul Clitheroe:                  But the idea is that people say, give me this hot tip, and I said, look, let’s be serious. It’s about it. Do you have surplus income?

Bryce:                                   Your point, if we have surplus income then they get very excited about shares or property.

Paul Clitheroe:                  They get quite upset when I say I don’t care. Here’s something number one question is where and what should I buy and what should I give it to the next hotspot that’s all we get is that sort of one question. But in property you can do more than seed in shares. I can do a little bit because obviously I believe in tenure decisions. As my wife, my kids bought a property or I think we can give. As long as we’re confident the property’s growing and the economy’s not going to fall completely out of bed.

Paul Clitheroe:                  I think we can give pretty good information like as there are more Australians, I think Woolworths will sell more food. I know banks are getting smashed at the moment in the media, but the reality is they dominate huge parts of the market and the market’s going to get bigger. So when I see something getting smashed and certainly past the property market are now and banks had been a bit smashed lately. I think, we all agree, forget the one year and three, what does it look like in 10 and I do think there we can get a demographics population trends.

Paul Clitheroe:                  I think we can look at an aging population and you guys look, I’m telling you how to suck eggs here, but you guys do know fully well that first time in history with property, we used to have younger people buying in the outer suburbs by a quarter Acre. Where the hills hoist and mum and dad were happy to live there as well. But now we’ve got both the baby boomers, my generation, we’re all going on now. We’ll sell the big house in pinball or buy a two bedroom apartment by the harbor and free up a million dollars.

Paul Clitheroe:                  Well, I may end up paying more for the two bedroom apartment by the habit.

Bryce:                                   Why is that happening?

Paul Clitheroe:                  Because that is happening the first time in history. We’ve got the aggregation of baby boomers and young people closer in. So, for both of my kids, I just said, look kids, the only thing I would say to you as a tip by your budget, you can only afford what you can afford. But I would strongly suggest that you buy smaller, closer in than bigger further out. Or you guys wouldn’t disagree with you.

Bryce:                                   Now we ask every one of our key. This is 100 percent of the law. They’re everyone we’ve had on here in terms of whether it be Alan Kohler. Whether it be Allen from the economists from nab. I’m Alan Costa. These are the people that say the same thing as what we do, like any is not rocket science. But we take a long-term view, right? So we’re not speculating property that’s just ridiculous and we want property investment to be regulated because we do think there is too many people that are short that are taking too much. I mean the conflict of interest of your mortgage broker telling you where to buy and what to buy. And in fact I’ve got a little development going on with the side. So not the type of crack that we see in our industry, right, that we’re trying to get rid of.

Paul Clitheroe:                  But the fundamental speak for themselves. I mean people make a decision based on convenience. Lost all drivers and if they’ve got the money, the pressures on the inner lane, it’s not on the aniline. So everything you’re just saying there, just validate that. And you’ve been through the mill of few talks but you can do that also. We’d be HP and Rio Tinto and Kohl’s and so on. So basically the issue for me is that, do I understand the story? And if I don’t understand the story, like someone says, I’ve got a development in the middle of somewhere, nothing about.

Paul Clitheroe:                  I don’t understand the story. Someone says to me, fly free to the Bank of Queensland to buy a property on for free flight. I don’t understand the second someone mentioned it’s free. I get really terrified. So there I think we can have short term tips about behavior, which is …don’t talk to me about buying property or shares unless you can tell me you’ve got surplus income because your surplus income is your driver of wealth.

Paul Clitheroe:                  I don’t much care and it’s because if you don’t have that bit, we can’t be talking any sort of tip. So I think we can give a range of tips about behaviors in that little bits of money put aside on a regular basis. Create wealth and it may not so bluntly. That’s why I get less fast about exactly as long as it halfway sensible. But, so I think we can all give behavioral tips in the short term. Like if you choose today, maybe just to spend a little bit less money that little bit money, we now maybe we’d pay off my credit card debt first up for God’s sake.

Paul Clitheroe:                  I mean that’s something that is a short term chip. Don’t you talk to me about investment when you’ve got two grand on your credit card at 90 percent that let’s not have this conversation. I get quite grumpy at. Sure. I’m getting old. I wouldn’t put you go off and pay off that. You come up with a plan to pay off that two grand on your credit card. Then you drop me an email to money magazine because you are currently failing. Money out the door at 19 or 21 percent per annum. Let’s sort that. So it’s not that we can’t give short term tips, but they’ve got to be around your behavior.

Bryce:                                   I think of a long-term staff is the population growing? Is the economy getting weaker or stronger? Is the population getting Richard Rapport? Are they going to Australia? And I looked at the world population is growing by 93 million people a year. That’s birth over deaths, 93 million years. That’s what Australia’s every 12 months. At that terrify yourself sometime go online and one of the population clocks and just look at the hundreds of thousands of births everyday over this living longer in the entire globe. And so yes, we’ve got all sorts of problems which is distracting us. You turn your TV on, go into any user and this bleeds.

Paul Clitheroe:                  I do, I spend plenty of time in newsrooms. And the rule in the newsroom for tonight’s news is if it bleeds, it leads. So, Joe’s businesses going quite okay. Terrific headline for the news. What a primary line. Wow, wait. So we either want Joe’s business to fail and Joe to do something terrible or we want Joe to win $1,000,000 in lotto or Jane or whatever. So we are, and particularly with social media now, I mean, you guys must laugh, man.

Paul Clitheroe:                  I put my phone onto news now and it’s pretty obvious that young journalists must build their career on getting hits and the headlines are becoming so close to a woman’s side. Poor old woman’s day, but some of the headlines are becoming pretty far fetch. I’m a single pension and I bought 132,000 properties. That sort of stuff. But now I know that’s a ridiculous extreme, but basically I think we’re really losing the plot when it comes to just what is common sense.

Bryce:                                   So I’m interested.

Paul Clitheroe:                  And all I know is if you, and I don’t care whether you’re running 20 grand or 50 grand or 100 grand, you now as well as I do, there are plenty of Australians out there today. He never spent more than $35,000 a year and they financially just fine. They really are just sure they’re probably getting a full age pension, but they probably got to cut through a 300,000 in the bank and you can own a family home worth any amount, which doesn’t count.

Paul Clitheroe:                  This is quite wealthy that puts you in the top half percent of the global wealth. Many Australian age pension are way out there. We did that recently where they sort of talk how wealthy we are and how people globally known and stuff.

Ben:                                       Oh no, we don’t want to restrict the remiss of us if we didn’t ask you about the proposed changes to negative gearing. Do you have a view all? Look, let’s just have one very quick FAQ. The average American person is not much poorer than the average Australian person within 30 to $40,000. What’s really fascinating is the media in Australia has been an economic term, but the, as you guys know, that’s the person right in the very middle.

Ben:                                       The average is a silly thing. Our wealth, sorry, we fought. We fought about wealth divide by four. That’s our average wealth. Both Kerry Packer average is ludicrous. That guy. So that’s why the average American looks pretty good. The meeting medium, Australia, it’s got about 200 and I’ll do it in American dollars.

Ben:                                       I can’t place the median Australians worth about 230,000. American was like, cool. What about 300,000 Australian? That’s the twelfth millions of strike. Okay, 12 million of Richard told me what in America, even though the average person is worth not much less than the average Australian, the median Americans were 52 grand.

Paul Clitheroe:                  So you’ve got about 300 and what 40 million population you’ve got about $170. Million Americans worth less than $52,000. So why do you think we have financial issues? And people asked me about this is not a political statement. People ask me about trump and dislocation and will. If you’ve got half of your population with total assets less than 50 grand. And my fear is that people will always behave rationally. And I’m sorry, listeners, I have used negative gearing. If I’m playing football or playing rugby and someone says today you can pass the ball forwards, I think you would be a silly team who didn’t pass the ball forward.

Paul Clitheroe:                  It is a legal route. The problem is, despite all of the fencing around, particularly by the property industry who’s the property developers lobby group. But basically the truth is that no other first world economy as you know has negative gearing. I do not have it. People get a tax break on their first mortgage. What you say is we’ll give you a break on a home. You Own America, England, Germany, whatever.

Paul Clitheroe:                  As a result, you get much more stable rental markets where you can rent a property for lifetime leases and so on because capital gains kind of people aren’t as excited. And obviously by the way, the bad news is for renters of course, is that, as you know in London, Germany, whatever, that you actually get higher yields because you’d have people are not infatuated with buying and selling and throwing tenants out in one year leases and God knows what else.

Paul Clitheroe:                  So in principle, I would much rather a system where every Australian got a tax break on their mortgage. But this negative gearing thing has been around forever and a day. I also respect the right of people to say, but this is my expectation. Say you’ve asked me a question, how do I feel about it? Well, we may recall Paul Keating had a crack at this for 20 odd years ago. But I’ve got to be. And you can go back over all of my writings and stuff. All my words, everything.

Paul Clitheroe:                  Mine’s been public now for three decades and I’ve consistently said, look, I think it’s an Australian thing. I’m not sure how are these changes are going to go. To be quite honest with you, I don’t really know, but if you’re asking me a principle in principle, I would favor a system which is less likely to benefit me.

Paul Clitheroe:                  Let’s pick on me as a maximum tax payer. I got most benefit out of negative gearing it. We just can’t step back from that. And so if you ask the poor LuLaRoe’s sphere at world pork with arrows, Farrah world wouldn’t have negative gearing. I don’t know quite how to do it because if you’re a leader, you’re probably going to get thrown out of the path.

Paul Clitheroe:                  So I don’t know how to do that. Maybe I need to be a dictator, but pork to there as well, in fact would have it would give every Australian tax break on their own home. It wouldn’t give you a tax break. I’m happy for you. I’m happy for you to take your losses down to your income, but not negative. I would have compulsory super because I think that does tell us something about saving. I do like compulsory super and Paul clitheroe would also have much higher GST.

Paul Clitheroe:                  And then the reason that I love GST is that now all of this by the way is really bad for Paul Clitheroe who pays most GST and people are spending. Correct. So, and with that higher GST, I would get rid of some of the stupid payroll taxes and stuff. But you’d get rid of a whole raft of the trouble. The trouble of course, is that if you’re an opposition. You’d actually like to be in government when someone comes up with higher GST. Oh high our taxes. It’s a great big tax and unfortunately I don’t think we are Australian. I think we are. Australians are expecting our politicians to lead and they’re trying to win votes.

Ben:                                       Correct.

Paul Clitheroe:                  And if we become a nation of what I call red lolly suckers, you know that thing that toddler makes a fuss in the supermarket. You give the toddler red frog. What you do is you think you do come the total of for about 60 seconds? But your behavioral training is just appalling and I really worry that we Australian voters will become red frog eaten. I think we’ve just become sugar addicted. And so we’re expecting our politicians to lead. In actual fact, politicians won’t lead us. We as a community of sensible people, we actually need to lead our politicians by saying, if this is explained properly, we’ll go with common sense. So I will say this super stuff. And so on the one point 6 million, I know a lot of my friends are really ticked off about it now.

Paul Clitheroe:                  And I’ve looked at that and going I think, a really high income earner, it gets too many breaks and I really think I’ve had too many. So I’ll pick on any of your listeners and I won’t pick on you. I think I’ve had too much of that. I have paid millions of taxes like millions in tax. People are walking the same. Basically I pay a lot.

Paul Clitheroe:                  A lot of us have paid a lot of tax but this community has given me so much and I’m just a little fretful that if you add super to negative gearing to know death duties, I’m just a little fretful it won’t be my time. I’m a little fretful when my kids are my age that at the average if the Middle Australians worth 50 grand, which at what that means, of course he’s the top five percent or nearly everything. And I’m just a bit fretful. I’m a bit fruitful that we’re moving into the rich get richer.

Bryce:                                   Okay. Can I just say one thing, one of your biggest messages today has been to spend less than you earn. Then the government should look at that too. I mean, sorry, because the only reason why we need higher taxes is because they have this, a need that I think they need to solve everyone’s problems, right? Whereas the society, sometimes we think they should solve our problems. Try and think that’s the point that we were 28 years of positive economic growth. We are in this comfort zone, right? And we haven’t had a hard landing or anything like that where you can make this type of reform. I’m with you on just every day of the week. It’s a consumption tax.

Ben:                                       I’m with you on stamp as well. I’m with you on the excesses of negative gearing. I don’t think you should be out in negative of 30th property or something stupid like misalignment with what Paul was saying. They’re probably not. You might want to have one or two properties or something in the way if you were on. I’m never going to do that.

Paul Clitheroe:                  I get asked often enough. I’m not going to do politics. And by the way, the reason you’d fly, the thing is say you give something back. That’s how you negotiate. I liked negotiation. I don’t like yelling and screaming. But if you start with, you going to have two negatively geared properties. By definition, the industrial so and make it six so you’d be silly not to start with zero. Somewhere in the middle.

Ben:                                       Got It. Very good. Last one for me. The best advice you’ve ever received?

Paul Clitheroe:                  I think probably it’s hard for my mom because my mom was at home. My dad was out doing the doctorate thing so he probably in that older model had more to do with them. We in the money than mom promised me but so, but I’ll call it a data mum thing. But it probably more influenced by dad with dad’s sighing sound if you want to do medicine image some the mid-seventies and he was an old fashioned stock so his great joy was he practices a jeep. A practice of GP who was 81.

Ben:                                       And what did he like doing?

Paul Clitheroe:                  He liked medicine. They just like medicine didn’t really want to get paid for Manson. He just liked. You said you signed it. When all doctor What do you do? I am a doctor. That’s what he did. I don’t have any other rotary club on Tuesday nights, but it’s all encompassing data. You already mentioned. Sandy said, don’t do it as a money thing and do it because it’s something you deeply wish to do because you will be paid by the government. You are paid by the tax payer and there are always going to be resource limitations and frustrations and restrictions and you’ll be told how many money you can send people for.

Paul Clitheroe:                  This person can’t have that drug and the arm and said, look, and in a world where there’s so much magic happening in medicine, stuff’s going to get expensive. And he said, you will probably become a bit of a Jesus Christ. You get a new diet. He said, I think it, yeah, but if you want to do that, do it as a passion. And I said, Oh, I watched my dad delivery babies at three in the morning or a job. And I said, what? And so the most valuable guys, if you’re not going to do that, he said, get a degree in something like economics or law. And so I strongly suggest you run your own business. And he said, I’d never run really well. I run my own medical practice. I’ve never really run my own business, but I get a bit frustrated that how I run my business is constrained by it.

Paul Clitheroe:                  Look, it’s the government’s money. It’s taxpayers’ money. It’s people’s money. I shouldn’t be constrained. But he saw, I really strongly suggest that really doing something you believe in. But probably in commerce rather than medicine and that actually is. I saw you got the good job when I left uni and I was getting paid pretty well when I left. And to earn no money building APAC but was all my mates just said to me, you are fasting. You are just completely or you’ve given up a good job not to get paid for two years. You completely crackpot. It’s funny, by the way, some of the mates now say to me, how lucky did you get? She’s dumb password. Like you got lucky. My favorite one by the way, at the pump somewhere that someone comes up and like, oh yeah, you’re that, you that money guy. But, how do you learn them on nights they liked, they liked a quiet. How do you make it sound so simple? And my mates all jump up and go because he’s not very clever.

Ben:                                       Tragic.

Bryce:                                   I really think that parental advice, and we’re coming straight back in. I’m gonna drag, it sounds like we’re coming straight back into the influence that parents, grandparents, family and friends that were in the kids. And I think that was for us, that was a transparent discussion around the dinner table and, and I think that’s interesting because certainly for me that I’m looking for the business and fail you look, this is sliding.

Paul:                                      Go look at it. So as my wife said things, we had a mortgage at this stage, obviously we used the $12,000 towards the House and the $20 business. And my wife said, Oh look, oh by the way, the property we bought was $90,500. It was some time ago. So I think I’m all good. Just 12 or 13 percent. The repayments took a fair bit of Vicky’s teaching salary because I didn’t have one and you know, so you know, Vicky would say, oh my God, you know, this doesn’t happen. I’m going to have a family.

Paul:                                      What are you going to do? And yeah, I said, joy have been 27, you will, it all goes wrong. We’ll lose the house and I’ll get a job. Um, but I think starting a business early is probably the second leg to that. I think at 27 you’re pretty, pretty much without fear and the other great joy and it is a joy with money if you go to, if you look, if you’re going to make, if you’re going to get something badly wrong, do it while you’re young, like at 63 people now say to me, how are you investing your money?

Paul:                                      And I say if you read in this book, probably international wasn’t around much when I wrote that book that’s on the table here. You’ll probably see me saying close enough to a third property, third shares and a third interest bearing securities. And to be perfectly blunt with you as a 63 year old gets pretty much what I do with my money these days that there’s a lot more international, I guess for me now. So it is an important tip. So I think for me to be a risk taker at 63 is got some of my money in equity and stuff. But, if all that goes, it has no influence on a lifestyle. So, basically I think we’ve also got to look at our life and in a bit of a so early days, I think it’s all about education. A 23 year old says I’ve got five grand saved up to go to Europe or do I go to Europe or go learn something and get frustrated.

Paul:                                      But while you’re there, check out who or what franchises are working, just ask about the super system of the tax system. So don’t just be a dumb tourist on a beach. And so education galore and something. Then I think you get through that phase. So if you’re going to take risks, I do think earlier is better and if you’re going to take risks later in life, like with the redundancy payout or whatever that is absolutely fine. But I get fries down at the closing of both the Toyota, the holden plants, talking to workers and you guys, we all know fully well that x percent of those workers.

Paul:                                      Again to take a very large redundancy check and it’s not going to go well, it’s not going to hit the mortgage or it’s not going to be put away for tomorrow or it’s got to go into a business which they don’t really know much about. And again, I really asked people to adjust a tune to what they’re doing to a bit of realism. And their stage in life. And I’m not saying we’re 55 year old or dance. You don’t start a business for him. And so, but what I’m saying is don’t just step into it. I had a guy say to me, they’re poor, I’m going to start a cafe. Have you been in a cafe or coffee all the time? So what? I’ve managed to line up for it and they had another guy on you. I got him to go and work for free in the cafe for eight weeks and ring me back. Guess what?

Paul:                                      Might have to prep this oldest food. How hard is that? It’s a spritzers nicer space. But then if he’d come out of that eight weeks and gone, oh great, this is me. So I just asked people, they’ll get saved. Sometimes I think we leap. We know we leap into stuff time. So I think they’re there for me. So I tried to do the enveloping cocoon. I think it will be a bit wild with your risk as a 27 year old. I mean, seriously, if I hadn’t worked, I actually think I would’ve learned as much as I would have learned in an MBA and I would have either gone and joined a fund manager, joined an investment bank or hopefully had another go.

Paul:                                      Because I think the reality is that, a lot of it, I got lucky. My first business worked. It doesn’t happen all the time like that. And I think I will learn and going on. So basically, I think risk when you’re younger is terrific. 63 year old. If I was you, I’d be just a little more prudent occurring or your essentials that there’s a little bit on the side. Oh, I’ve got some risk money, but if I lose all of it. Correct. It doesn’t have a lot impacts from.

Bryce:                                   Well I’m going to say Ben, when we walking through the corridor of our office and we said, well, what’s your wish list for $200? And you were well and truly up there. So we high fived when we found out the other team couldn’t make. We appreciate you giving up your time. I mean if anyone had, did not get to have that. Wonderful. But yeah, thanks for all you did. Impacted my own life when I was back in the nineties. And thanks for all that you’re doing to continue that legacy with your own foundation and with the government. I’ve thoroughly enjoyed tonight and you’re doing a terrific job. So thank you again.

Ben:                                       Well, how much do you want in one interview? Seriously. So when you opened up the podcast this week and you saw it was going to go for over an hour and a half, you’re probably thinking, Oh God, that’s a special episode. So there’s some bonus content and how could just stop the man?

Paul Clitheroe:                  Oh, I could’ve gone on. I mean, you know, we didn’t even cover off on leverage. We didn’t count on their assignments, my steaks, my luck. So we might, if I wasn’t a good storyteller.

Ben:                                       Phenomenal. He was a terrific storyteller. So they’re very engaging. So hope you enjoyed that folks. We certainly enjoyed the opportunity to meet Paul. He was generous, he was humble and as you heard, he was telling me some really great stories. So, yeah happy two hundredth Ben. Thank you. Celebrated in style. So, hey, my life hack today is, that’d be a good one bra.

Bryce:                                   So I’m in. It’s our biggest show ever. Yeah. So no pressure, no pressure. So. Right. What do you got for me? The power of the seven day float? Now I understand. I said, this has been, that you’re referring to some of the stuff we do. You did set that up. You didn’t know where it was, but I want to just say that you go to the leaders of the world. To the thought leaders who are changing the world, and you circle back to you. Why have I actually done this? Because what did Paul say in his interview? There was no shiny objects syndrome. It was the fundamentals. Well, if you didn’t get that message from listening to you and what are your tips? What I have any tips? It’s through these same complaints, problems.

Bryce:                                   What did you hear from your parents? What did these simple things, what do you do? Now? I’ll do these simple things. So the point is, shock horror, spend less than you earn. Come on, imagine that. I’m one who would have thought. Now again, you didn’t realise that was a wonderful segue for me. Did you spend less than you earn? Is the power of the seven day float or is it? We’ve talked about it before, but I just wanted to use it as a celebration of this 200th episode that if you were to obey the principle of the seven day flight, it will transform your menu management, correct.

Bryce:                                   It will transform your money management 100 percent because for the majority of the listeners that are out here, the enemy of their money management is not ops. I bought a plasma TV or ops I just didn’t realize was going to buy a house officer, didn’t realize I was going to buy a new car.

Ben:                                       That’s not the enemy. The enemy is the creep, the other lifestyle creep on a Tuesday or Thursday or Wednesday or satellite where you tap and go and you don’t realize it. So the reason I wanted to do this today, Ben, is this transformed my wife and my own money management to the point where it’s hard to. It’s hard to describe on a podcast, but I remember that video that we had with two and a half men and he’s in with the accountant. And the accountant is trying to explain to him. I think we’ve got it up there, but we’ll make a link to it is an absolute classic. It’s a classic artist is going. Yes. And what I love about you. So if you can imagine this Fox, imagine a cup of water and he’s pouring water in the top right?

Bryce:                                   And he goes, it tips the water out and then he goes, but what I love about each one. And just start hammering this polystyrene cup with holes, right? Like 20 slash 30 the death by a thousand cuts. There’s 30, 20 holes in this book. And then he starts pouring the water. He goes, what I love about your job is you spend it faster. Then you can see it in the top. And not to say that I was pulling it into the top massively, but it’s just, there was hemorrhage, Ben.

Ben:                                       Yep.

Bryce:                                   And the one when we heard the cats, this is what will transform lives because if you think about it, if I gave you $100 in cash bras, yeah, I’ll take that 100 bucks. And you had no other access to money. Could you spend any more than that hundred dollars?

Ben:                                       Nope. Can’t. Can you walk. Her grandparents are all just kind of do it. So even if you want to, unless you go and beg, borrow or steal, you can’t spend any more than that. So in the modern age, we just move that into a debit card and you just stop yourself. You train yourself to mentally think that that is all you’ve got. There is no more. There is no more for family. That is it. Once you work out your weekly budget and your seven day float, that’s it. No more. The power of the word is today’s life hack.

Ben:                                       For those of you who are circles back beautifully to your mindset, minute process does because it’s with less resources. People still get it done.

Bryce:                                   What an absolutely good point that you raised, isn’t it?

Ben:                                       Because how many times have we had this conversation in the last few weeks with people where they say people earning so much money that they don’t know where it’s going versus, excuse me, the people who have less people who oppose it.

Bryce:                                   I think you’ve nailed it. I think that’s probably a real reason why is because it’s transformational. It doesn’t get any better. Spend less than you earn. So the message folks is this, If you’re not using the power of the seven day float, you, and for those of you who don’t know what it is, it’s where you pay yourself enough money each week to live for seven days. Now we have zero judgment around how much you pay rent. Yet obviously the list gets better when you work it out. You do your expense items, you work them out over a course of your weekly allowance or the year, and then you divide it by 52 times. Your movies, your groceries, just the basics of a seven day. All have to come in and come in there. And then if you run out of money and you got three days to go make it work in your $100. So they go in life account.

Ben:                                       Did you know Bryce coming back on what Paul was talking about in that great interview, that we did with him, I circled back to the money, the government website, and so all very good stuff in there. And I came across some research around what he’s talking about because we’ve got to start this young. This crusade to help people manage their money better. There’s a thing called the program for international student assessment or Pisa up as all along to refer to it per se. So what happens here is they make an assessment of how well 15 year old students can participate in the real world. Okay?

Bryce:                                   Okay.

Ben:                                       So they break it down into things like literacy reading, literacy mathematical, literacy science and literacy measurements. So just different ways in which they can cope in the outside world.

Bryce:                                   Now this is a pretty serious study. Europe, there were 72 countries involved, 35 countries and 37 other partner countries. But now section so it’s representing either 29 million, 15 year old students internationally and they had 53,000 students participate in the financial literacy assessments. Applesauce good sample size of which Australia had full time thousand. 530 people in the financial literacy assessment and that representing 2900 15 year old students nationally. That’s how many we have in Australia with that tongue. Now, how do we perform? How do we benchmark against the rest of the world? So we scored, we had an average score of 504 points in financial literacy which was significantly higher than the CD average of 499. So we’re so much some comprehension. Australia’s performance was significantly lower however then full countries being China, Belgium, Canada, and the Russian Federation.

Ben:                                       Okay.

Bryce:                                   So that the countries that we did out perform included United States, Poland, Italy, Spain, the Slovak Republic and Chile and[crosstalk 01:45:01]

Ben:                                       Okay. Is that your exits? Is it just that’s how I go? Three partner countries, Lithuania, Peru and Brazil. I could, we didn’t know those accents on an item. That’s probably, well I didn’t do. Okay, so that was interesting in terms of what it looked like. Now some of the other insightful pieces were here. We got results for female versus male. Females had a mean score of 510 points and performed significantly high than males with a mean score of 498 males with. Thank you all for the 200th. Besides this, you’ve been a huge part of this and you’d been amazing. Should we have done it at the top of the ship? Might be we’re not doing it now. We’re doing it now. So how do you feel about us getting to $200? Oh, she’s given us the wrap up.

Bryce:                                   Okay, keep going. So, that is important to understand that women are getting on top of their financial literacy, which I think us blokes and let’s go outside. Come on. We still need to do better. I mean obviously you think about those countries like China, Belgium, Canada, and the Russian Federation. They are organizing and getting on top of their money a little bit better than others. But it just goes to show you, that’s the sort of work that Paul is doing in terms of trying to facilitate that into the curriculum around money management and we think it’s our bonds. Have an idea, Ross. Love it. Did you know? I did not know. I think that’s terrific stuff. So it’s been a joy and a privilege to do this podcast with you. Say that we started off with very modest dreams for this podcast. Could be to now stand here at the end of 200th. Having had epic guests like we had time to be over 4 million downloads. 4 million downloads is that over 4 million?

Ben:                                       4 million downloads, over a thousand five star reviews.

Bryce:                                   Five star reviews.

Ben:                                       The amount of guests that we’ve had that have come on and shared their knowledge and just the stories of transformation that we’ve had. The privilege of people to tell us that they’ve been able to implement as a result of listening to this podcast. I’ve got to say, it is one of the joys of my life that we are my professional life.

Bryce:                                   Yup, that we’ve had the opportunity to do this. So, it’s well, here’s to 200 more my friend.

Ben:                                       Is to 200 few more exciting changes coming. There are so next week we might have a few little change ups. Spit might a front row seat to the… I know this will annoy you, but a front row seat for me to be around the property investment advisor of the year, sharing to all these people in our community is just amazing.

Bryce:                                   And I just want to thank every single listener who’s taken the time to listen to us, share us with a friend, come onto a Facebook live, be a part of our community on Facebook and social media. It is just a joy and a privilege and we are just so thankful and my turn to return. So to you mate. I mean, I rabbit on and carry on and you just keep it on the straight and narrow. You make things, you synthesize things into really understandable points and you put great frameworks around it. I’ll just keep rabbiting on mine and I just keep talking. So it’s been a privilege for you to be able to steer the ship and look after this rabble of accrue ride and we had a little bit folks. She doesn’t like being in front, but she don’t listen to. Do you introduce those things?

Ben:                                       Yeah, it was a while ago, but she does a terrific job. So again, to make it to 200 is just a wonderful experience for us. So yes, just to give back to the community. So I think he had Lincoln rod inside just tuned into my first property couch episode using Spotify on my morning commute. Very principled. The Info you guys shared. I’ll continue making my way through the episodes. However, it’s a little hard to keep on top of them. I previous episodes to catch up on. So that’s why I love the idea of your little project with the gold nuggets. The principle is you light very early on and build upon a very important. Just wanted to let you know, like right idea for a newbie listening like myself, it would be very helpful. She is linked

Ben:                                       Well, the good news has been what we were given and more it’s available. The nuggets from the top 20 is our viable, so you need to 100. Let’s talk top 20 and we’ll work our way up to the 200 volunteers but we are slowly. That’ll build a 30, that’ll be up a 40, but at the moment that foundational stuff is there, so for those of you who made it all the way to the end of this episode, you can go and download it.

Ben:                                       For those of you that had a friend who didn’t get to the end of the episode, they have to go and tell them that it’s available, but we will obey our service link on the show notes, show notes. She’s not going to tell us how I had to step in there. So there you go. Folks shown I scan. It will also be available on our Facebook page and also on the Facebook group Facebook group, so make sure all short in the Facebook group site their so you check out the Make Money Simple Again Facebook group because we’re sharing a little bit of tips and tricks in terms of managing money such as the seven day float, and you come a long way back in episode one.

Bryce:                                   So there you go folks. I know we’ve indulged a little bit towards the end, but thank you. Thank you for joining us and being a part of our community. It’s been funneled long bench. So until next 100 next hundred bras.

Ben:                                       Knowledge is empowering but only if you act on it.

Bryce:                                   See you next week Folks.

 

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