Australian Investing Thread

[BRAFRA]

Australia has treaties with some countries to avoid the double taxation with respect to taxes on income and the prevention of fiscal evasion. Are you aware of any country with a treaty that could be used by investors to maximise their profit?

For example, imagine a treaty with Luxembourg stating that the dividends of shares from one of the 2 countries are only taxed in this country. Luxembourg may only have a 10% flat tax, so you better have to buy shares in Luxembourg if your marginal tax rate in Australia is 32.5% or more.   

[Andy R]

Australia has treaties with some countries to avoid the double taxation with respect to taxes on income and the prevention of fiscal evasion. Are you aware of any country with a treaty that could be used by investors to maximise their profit?

For example, imagine a treaty with Luxembourg stating that the dividends of shares from one of the 2 countries are only taxed in this country. Luxembourg may only have a 10% flat tax, so you better have to buy shares in Luxembourg if your marginal tax rate in Australia is 32.5% or more.

I thought that you get a credit for the tax amount paid in the other country and then make up the rest up to your marginal rate.
So if you paid 10% tax there and your marginal rate here is 32.5, wouldn't you then still need to pay the Aus govt the remaining 22.5% ?

[mjr]

Andy R is correct.  No free lunch.

[Ballyoz]

I have been reading the MM blog and this particular thread, among many other sources, in recent months as I try to provide myself with a financial education. My wife and I have been discussing the bigger picture and I would really appreciate some feedback/wisdom from these parts!

Background:

I am 37, my wife is 30. We moved to Australia from Ireland last year. We live in Sydney. Both working full-time. I earn $125,000 and she earns $90,000 (both ex super). At the moment, after rent and all other expenses, we manage to save $5,000 monthly. We have a budget and minimising outgoings is a continuous project. Happy to report we're on the same page when it comes to what we want out of life, including financially.

We came from Ireland with very little, around €50,000 in pension funds left behind and some 'get started' money. We plan to stay here in Sydney and are planning accordingly when it comes to our finances. I have no idea if (and how) we would transfer that Irish pension money into Super, but that's another day's work!

We have managed to save $63,000 dollars to date, all of it an ING savings maximiser account. We have no debts (bought a car cheaply here with cash).

Our main goals:

- To start a family (hopefully next year)
- To provide for our future here in Australia

Our main challenges:

- Starting a family is expensive in so many ways - lots we don't even know about yet! (Loss of earnings, childcare etc.)
- We are on the back foot already when it comes to Super, savings etc. given our respective ages... especially mine!
- Property prices in Sydney

In our favour:

- We have good jobs
- We are committed to each other and our future together - willing to make sacrifices

We have discussed the following in terms of our approach:

- Building an emergency fund for unforeseen events (can come from existing savings)
- Happy to keep renting for the foreseeable future as to buy reasonably close to where we both work would be far too expensive. The median price for a basic two-bed unit is comfortably more than $1 million. Renting that same unit costs around $700 per week. To move to a place where that same unit costs $800,000, for example, we would both spend three hours plus a day commuting and these areas are also far more exposed in a downturn. There's also the issue of building the required deposit (we wouldn't feel comfortable at less than 20%). Overall, we are not comfortable with planning to purchase right now, but not ruling it out at some point in the future - if the stars align!
- Considering salary sacrifcing to Super, especially for me, to kick start that fund. If (hopefully when) my wife has to go on maternity leave and all that follows, I could also contribute to her Super to keep it moving forward. We are aware of the concessional cap and I could try make the most of it, especially if there is a pay rise in my future.
- Investing money for the future. This is critical for us, I feel. Obviously this is an area where people can debate ETFs and approaches all day long, but ideally, I would like to keep this as simple as possible, especially as we are interested in a set and (not quite) forget long-term option(s), where we are contributing steadily and consistently towards a future income. In this regard I think one of the old-school LICs while not very exciting may be a suitable option for us, using a dividend reinvestment plan. Vanguard, of course, is another popular option and offers the potential (if we were exposed heavily to Australia via an LIC and Super) to diversify somewhat and focus more on capital growth (again using a DRIP). These would be investments we intend to not even consider touching for at least 20 years. Despite my slight misgivings about the market right now, I am not interested in trying to time it, but just getting started.
- Last consideration is IF there is income left after we build an emergency fund and start investing for our future (via salary sacrifice to Super and otherwise, as outlined above) should we also looking at directing some of our income to a high interest bank account for slow and steady home deposit building, so that it remains a live option for us, despite us feeling the time/market etc. is not right at the moment (and we don't have enough cash!). Homes in Sydney will never be cheap and, who knows, if we decide to move elsewhere in NSW or Australia some day it could be useful then too.

Thanks for reading and, in advance, for any thoughts you share.

[PDM]

Get out of Sydney? Brisbane is cheaper, less crowded and the people are nicer. I might be biased  though. Seriously keep in mind relocating. A lower cost of living area can make a massive difference to FIRE plans.

[marty998]

Lemme guess @Ballyoz, you guys are in Bondi? And I'll also wager you're both in financial services with a Big4 background? Sometimes I wonder who is left over in the Dublin offices of PwC and KPMG Ireland, they all seem to work here  :)

There is more to Sydney then just the Eastern Suburbs. Plenty of nice areas where you can get a 2-3 bedder for well under $800k, without a 3 hour a day commute.

[middo]

My first suggestion is get both of your supers up to 25000 per year by salary sacrificing if you haven't done that already.

[Ballyoz]

Thanks all for your replies.

- PDM, we're in Sydney for now and a move is not likely any time soon. Take your point, but I guess earning potential comes into it too - among other things. I look forward to visiting Brisbane!
- Marty, we live and work on the north side of the city, and neither of us are in finance ;) But I do know of whom you speak! We have never lived in (and barely visited) the Eastern suburbs and we are not tied to the North Shore (where we do live) either for that matter, but proximity to work does matter. What nice areas do you have in mind?!
- Middo, we have not done that, we have just focused on saving what we can and now we are trying to figure out the best way forward. Took time to get settled and start to educate ourselves in a different country! As I said in my post, salary sacrificing to Super is definitely something we're thinking about. We just want to strike the right balance across priorities.

[PDM]

Thanks all for your replies.

- PDM, we're in Sydney for now and a move is not likely any time soon. Take your point, but I guess earning potential comes into it too - among other things. I look forward to visiting Brisbane!

Brisbane is a nice place to live - terrible place for a holiday. I reckon about 4 hours is enough tourist time.

[marty998]

Thanks all for your replies.

- PDM, we're in Sydney for now and a move is not likely any time soon. Take your point, but I guess earning potential comes into it too - among other things. I look forward to visiting Brisbane!
- Marty, we live and work on the north side of the city, and neither of us are in finance ;) But I do know of whom you speak! We have never lived in (and barely visited) the Eastern suburbs and we are not tied to the North Shore (where we do live) either for that matter, but proximity to work does matter. What nice areas do you have in mind?!
- Middo, we have not done that, we have just focused on saving what we can and now we are trying to figure out the best way forward. Took time to get settled and start to educate ourselves in a different country! As I said in my post, salary sacrificing to Super is definitely something we're thinking about. We just want to strike the right balance across priorities.

Ahh crap! I guess I am a little sick of all the Irish resumes that have come across my desk the past couple of years :) 

I'm more familiar with the southern parts of Sydney, but up North yeah look the commutes are a bit worse, especially with slow buses from places like Dee Why and Narrabeen. And from the North West, with the Epping/Chatswood rail shut down for the metro it isn't looking great either. Have a mate who lives in Mosman, and I beat him into work in the CBD in the morning, even though I live on the outskirts of the metro area.

It will cost you more that side of the bridge, but alas, privilege has to be paid for.

A lot of noise is made about super and the gender gap and making sure women have the same standard of retirement etc... however in your case because of your age gaps you would want to put as much in your name as possible, as you will have access to it first. In 23 years when you draw it down, you can simply wash it back into your wife's fund.

A big mortgage when you're about to start a family and interest rates are on the way up and you're down to 1.5 incomes with childcare bills is something to either be avoided or strategically planned for. Take your time war-gaming it!

[Ballyoz]

Ha! Well rest assured you will never see my resume :)

My wife works in Mosman and I am further north, right in the midst of that rail shut down! We both like our jobs, so happy to rent for the privilege of being close to them, but highly doubt we'll ever be in a position to buy up here. That's why we're looking at other investments.

Thanks for the advice on the Super. I have a lot of ground to make up for sure.

World domination is not on our agenda, or even FIRE realistically, we just want to set ourselves up as best we can.

[mjr]

Brisbane is a nice place to live - terrible place for a holiday. I reckon about 4 hours is enough tourist time.

4 hours if it includes a long lunch !

[PDM]

Brisbane is a nice place to live - terrible place for a holiday. I reckon about 4 hours is enough tourist time.

4 hours if it includes a long lunch !

I’d assumed a long lunch, a city cat ride to capture a photo of the bridge from the water (looking back towards the city), a quick visit to either the Powerhouse/New Farm Park or GOMA/Southbank.

[mjr]

Vanguard pre-fills are in.

[steveo]

Vanguard pre-fills are in.

Thanks for the update. Off to complete my tax returns.

[BattlaP]

Vanguard pre-fills are in.

Some of my ETFs are there, but my wholesale funds aren't showing up yet. Had a go at doing it myself but its pretty confusing. The tax guide on the Vanguard site has barely any relation to my AMMA Tax statement and it's not clear what goes where in the mygov tax return process. I'm dumb.

[steveo]

Vanguard pre-fills are in.

Some of my ETFs are there, but my wholesale funds aren't showing up yet. Had a go at doing it myself but its pretty confusing. The tax guide on the Vanguard site has barely any relation to my AMMA Tax statement and it's not clear what goes where in the mygov tax return process. I'm dumb.

I checked and I have 2 out of my 3 funds there. I'm not even going to try to fill it in correctly. I'll just wait a week or two.

[NotSure]

Sorry if was already answered.

In myGov tax return there is no pre-fill data from VGS, only VAS, is this normal? Will it be later or should I fill details myself?

Thanks in advance.

[BRAFRA]

Happy owner of VTS and VEU ETFs here. Without a W8 form, the dividends get taxed at 30% by the US. I initially did not see the point of filling a W8 form as my marginal tax rate is above 30% and would not benefit a tax return through a tax offset.
I now read that if you don't provide computershare (or whoever) with a W8 form and tax was withheld at 30%, you can only claim tax withheld at 15%. Can you confirm?

[marty998]

Very happy with the VAS estimated September Qtr distribution - $1.1274.

Cha ching! +$3150 to the kitty :D

[mjr]

Indeed.  Looks like a record.  Presumably a chuck of franking credits on top as well.

[marty998]

Ouch... financial stocks copping a barrage today, and the market has definitely turned. A lot of sectors are being re-priced and downgraded lately.

The banks are still falling. 30 September is year-end for Westpac, ANZ and NAB, results will be out at the start of November.

Some further implications from the Royal Commission are sinking in.... ASIC finally awaking after being told to act more like an angry Cerberus rather than a scared Scooby Doo. AMP the first to be put in the dock.

[Richmond 2020]

I’ve got a lazy $20k sitting in an offset account against my mortgage. Leave it there or buy some Vanguard on the cheap?

[Andy R]

I’ve got a lazy $20k sitting in an offset account against my mortgage. Leave it there or buy some Vanguard on the cheap?

What was the purpose of the 20k?
If it was earmarked for anything such as an emergency fund then don't see why the change.
If it was not, why hasn't it been invested already?

[Richmond 2020]

The “Purpose” is to offset some of the interest costs 4.06% on our home loan. The decision point for moving this money to shares is whether the drop in the share market will shift the odds in favour of getting a better return in shares (noting this will incur tax).

[Andy R]

The “Purpose” is to offset some of the interest costs 4.06% on our home loan. The decision point for moving this money to shares is whether the drop in the share market will shift the odds in favour of getting a better return in shares (noting this will incur tax).

If I had money that was not earmarked for anything except to pay off the property while having money available for some particularly great opportunity, I wouldn't consider a 5% drop all that great. I'd ether be investing it sooner without waiting for some particularity good opportunity, or I would be waiting for quite a lot more of a drop, but that's just an opinion.
Anyone who says they have an answer to this is full of it. It could recover quickly and go up a lot more or it could continue to drop another 5, 10, 20, 30, or 50%.

[bigchrisb]

The “Purpose” is to offset some of the interest costs 4.06% on our home loan. The decision point for moving this money to shares is whether the drop in the share market will shift the odds in favour of getting a better return in shares (noting this will incur tax).

If I had money that was not earmarked for anything except to pay off the property while having money available for some particularly great opportunity, I wouldn't consider a 5% drop all that great. I'd ether be investing it sooner without waiting for some particularity good opportunity, or I would be waiting for quite a lot more of a drop, but that's just an opinion.
Anyone who says they have an answer to this is full of it. It could recover quickly and go up a lot more or it could continue to drop another 5, 10, 20, 30, or 50%.

+1 on this.  While the last week is reported as dire, even after this drop anyone who invested a year ago is doing just fine...  Including distributions, VAS is up 6%, VGS about 14%, VEU 3.5% and VTS 19%.  All pretty healthy returns.  If it wasn't a screaming buy to you 12 months ago, its less of a screaming buy now. 

As for me, I'm sticking the course.  I sold off a couple of things a few weeks ago to pay down some debt (see journal if you want the details).   After a little wobble, I'm sticking the course - a bit of reinvestment, and chipping away with accumulation in my super fund.  No real news here...

[mjr]

I agree if it wasn't a screaming buy a year ago, then it's not now.

I do think it's still more of a buy situation though.  It's now been higher.  It's not unchartered territory anymore, there are likely to be investors who aren't keen to sell at a loss providing upwards pressure.

It certainly hasn't been anything to write home about, though.  Hardly moved the needle.

[superannuationfreak]

Has anyone in Vanguard International Shares Index Fund (Wholesale) seen pre-filled data in MyTax?

We've only received an AMMA tax statement which doesn't have the helpful tax return labels.

It also looks wrong (The entire Net Cash Distribution is attributed to "Other non-attributable amounts", even though there is a foreign tax paid amount which should logically have Assessable Foreign Income > $0 attached)

For comparison, VAS had the more familiar Member Tax Statement while another Vanguard Wholesale Fund had the same as International but at least looked properly attributed to Foreign Income, etc.

Thanks!

[BattlaP]

I'm in the same situation. Tried to put the info in myself, couldn't make heads or tails. I'm gonna call Vanguard tomorrow and see if the pre-fill is actually going to come before October end.

[steveo]

I just manually entered the VGS details in the tax return. It's not that hard and I avoided it for as long as possible.

[PDM]

I just manually entered the VGS details in the tax return. It's not that hard and I avoided it for as long as possible.

It was fairly straightforward. The order of the items didn't match up but the tax code letter and numbers I could easily match.

[BattlaP]

They've assured me that the managed funds should be coming before the tax cutoff, but couldn't give me an exact date. ETFs should all be in now. I'll just wait.

[superannuationfreak]

Called Vanguard too. They did note they don't include the tax codes (e.g. 13U) for wholesale funds but we should be able to match the entries to our ETF statements anyway. I didn't ask about pre fill but am having doubts that wholesale fund customers will get it. Hopefully your rep was right.

[lush]

Hi All,  I have been reviewing a lot of blogs, books and experts in the Financial field and many of them have the same advice about the asset allocation of a portfolio. In summary, about 80% Stocks (Growth) & 20% Cash (Defensive), with the understanding that past trends over 10 year periods suggest there are about 3-4 years of a depressed market, followed by about 6 years of generally good returns. I have also looked into 10 years of data across the Vanguard Managed Fund Portfolios and without question over a 10 year time frame the VAS has generated about 30-40% better distribution returns compared to Balanced, International and High Growth funds. For the record, I am mainly focused on distributions not necessarily growth. In addition, the VAS does provide a good tax benefit due to franking credits.

Originally we put all our eggs into one basket an put all we had into into the Vanguard Balanced Fund Portfolio as we considered it be very safe (later we invested in the VAS). This was at a time that we really didn’t know very much at all about the world of shares etc. So it gave us some comfort. Over 2 years down the track and we have become very comfortable with the stock market and anticipate several highs and lows in our lifetime and have come to an understanding that actually the real risk maybe in being too conservative, meaning reduced growth and distributions if we remain predominately within the Balanced Portfolio.

Below is a breakdown of what we have currently and please keep in mind that we hope to FIRE within 1-2 years (current ages 47 /44) – however may continue to work part-time a few more years, meaning that we can let the distributions reinvest into VAS for hopefully the next 5 years.

Balanced Fund = $1.02M  (20% VAS+ 30% International Shares = 50% Growth) + (35% Bonds + 15% Cash = 50% Defensive )

VAS = $225k

Over the next year we intend to top up VAS with another $150 – 200k (ambitious target). This would mean our asset allocation would be approx. 33% Defensive + 67% Growth (VAS would make up about 47% across the both portfolios)

In order to increase the Growth/VAS asset allocation of the Portfolio, I have been contemplating selling down about $300k out of the Balanced fund  (I know there will be CGT impacts but intend to sell over 1-3  years to limit impacts) to top up the our VAS in order to help future proof the portfolio. The thinking is - better to do this now early into our portfolio / asset building strategy, rather than years into the future, if at all. The additional $300k would see the portfolio asset allocation to:

25% Defensive/ 75% Growth (VAS making up 60%)

As Vanguard control the VAS allocation in the Balanced fund this could change over time if they increase or decrease it, however something tells me they will leave it at about that 20%.

I am sharing my thoughts in this forum to see what people think or could advise. I am somewhat concerned about the CGT impacts of selling part of Balanced Portfolio, but think it may be short  term pain for long term gain.  I also have come to believe we need to drop the cash / bonds down (Defensive) to at least 30% of our portfolio asset allocation...if we are going to live until about 100 years old!

Oh and if you are thinking about our super  - my partner and I have about $200k each in Balanced Portfolio in Host Plus – which is about 60% Growth/40% Defensive ( I think).

Thanks!

[one piece at a time]

I can't see why you need defensive funds in super that you can't touch for 20 years. Is there a reason for that allocation?

[Andy R]

Suggest you decide on an asset allocation first (Fixed interest/Aussie equities/International equities). Then after that you can find the funds quite easily. Don't do it the other way around, it will just confuse you.

[PDM]

Seems like a lot of VAS. I'm not a huge fan of it myself.
Here is the VAS top 10 - 43% of the fund. Banks and super markets with a sprinkling of mining.

You're missing the huge opportunities for diversification and international exposure provided by etfs.

The ASX is a backwater stock exchange in a backwater country that flogs houses to itself for inflated prices and digs up some stuff to sell to China.

[marty998]

Seems like a lot of VAS. I'm not a huge fan of it myself.
Here is the VAS top 10 - 43% of the fund. Banks and super markets with a sprinkling of mining.

You're missing the huge opportunities for diversification and international exposure provided by etfs.

The ASX is a backwater stock exchange in a backwater country that flogs houses to itself for inflated prices and digs up some stuff to sell to China.

But but but... we have.... errrr..... umm.... franking credits!!!

Yes yes... invest here because of that....

/s

So ridiculous that SMSFs are up in arms because of the proposed policy from the opposition. Perhaps it's about time the small proportion of the population who hold $700 billion in assets might start to pay just a teensy little bit of tax on their incomes?

[bigchrisb]

Seems like a lot of VAS. I'm not a huge fan of it myself.
Here is the VAS top 10 - 43% of the fund. Banks and super markets with a sprinkling of mining.

You're missing the huge opportunities for diversification and international exposure provided by etfs.

The ASX is a backwater stock exchange in a backwater country that flogs houses to itself for inflated prices and digs up some stuff to sell to China.

But but but... we have.... errrr..... umm.... franking credits!!!

Yes yes... invest here because of that....

/s

So ridiculous that SMSFs are up in arms because of the proposed policy from the opposition. Perhaps it's about time the small proportion of the population who hold $700 billion in assets might start to pay just a teensy little bit of tax on their incomes?

Indeed.  However, that is a problem with having 0% tax rates on super funds in pension mode, as opposed to a problem with the franking system.  Wish both sides would address the actual issue of taxing super pensions rather than looking for work-arounds that cause collateral damage.

[one piece at a time]

Seems like a lot of VAS. I'm not a huge fan of it myself.
Here is the VAS top 10 - 43% of the fund. Banks and super markets with a sprinkling of mining.

You're missing the huge opportunities for diversification and international exposure provided by etfs.

The ASX is a backwater stock exchange in a backwater country that flogs houses to itself for inflated prices and digs up some stuff to sell to China.

I get my ASX exposure with Argo. They cost 0.15% which is a bit higher than the 0.14% of VAS, but they are focused on dividends rather than index tracking so I think it is worth it. Their top 20 is https://www.argoinvestments.com.au/assets/docs/monthly-nta/ARG-NTA-0918.pdf

High (enough) volume traded through Argo to make the transactions pretty easy -- compared to some of the more boutique Vanguard funds that heavily rely on market makers. The volume makes dipping into shares to fund life cash flow crunches a little easier. Having said that I stopped buying new Argo shares shortly after finding this site and have been adding VEU and VAE.   

[mjr]

Indeed.  However, that is a problem with having 0% tax rates on super funds in pension mode, as opposed to a problem with the franking system.  Wish both sides would address the actual issue of taxing super pensions rather than looking for work-arounds that cause collateral damage.

Indeed.  Although my SMSF is not yet in pension mode, I'll continue to go right off at the ALP distorting the playing field in an unabashed attack on SMSFs to get people to move to union industry funds.

These people are only playing by the rules.  They shouldn't be penalised for playing by the rules.

[mjr]

You're missing the huge opportunities for diversification and international exposure provided by etfs.

The ASX is a backwater stock exchange in a backwater country that flogs houses to itself for inflated prices and digs up some stuff to sell to China.

It's true that Australia is not exactly an economic powerhouse.  But it's where we live (no currency volatility) and there's not much danger of foreign banks and miners coming in and taking significant market share away. 

Plus we are a nice, stable country and there aren't that many in the world.  I wont put a cent into Europe, for example.

Despite sarcastic comments as to their value, there are the franking credits which are worth real money to Australian investors.  If solely invested overseas, you don't get the benefits of the foreign tax offsets.

Note that even Peter Thornhill is an advocate of Australian Industrials, which is a lot of banks and supermarkets.

VAS has its place and 60% doesn't sounds too bad.

[Andy R]

Note that even Peter Thornhill is an advocate of Australian Industrials, which is a lot of banks and supermarkets.

Peter Thornhill advocates no mining, no REITs, no bonds, no international, no index funds, and touts the catch-phrase "di-worse-ification" that people repeat because it's catchy and they are too brain dead to comprehend the insanity advocating against diversification in investing. His arguments for each of those are based on half-truths, which is why they appear to be true to someone who is unaware of the part he leaves out.

[mjr]

I'd be quite happy to be half as successful as Peter Thornhill has been.

Luckily, having a brain myself, I have REITs, index funds (and hence mining) and a very significant exposure to the US.  I don't follow Thornhill's exact strategy, I was merely pointing out that there are plenty of worse places to invest as an Aussie than the ASX.

[lush]

Thanks to everyone that responded to my post, always good thoughts from all differing perspectives. I really thought there would be more reaction to reducing the defensive part of our portfolio as I thought there might be some strong supporters of cash/bonds. I also thought there would a wave of responses to not "fiddle" with our portfolio and leave it as is and just keep building on it.

I understand the reactions to VAS, but tend to think that Australia is not a bad country to invest in.

[marty998]

Profit warning from the Reject Shop this week (share price down well over 65% from it's peak six months ago), and also Roger David collapsed - a business that has survived 76 years of change and disruption until now.

Two not so great indicators of the health of the economy (can you tell I'm bearish?)

Shopping centre landlords are going to struggle to fill the empty space, but to be frank, the crazy high rents contribute to sending businesses broke too.

Not a great week for retailers or REITS.

I was in the David Jones flagship store earlier this week at lunchtime..... apart from the basement food court there was very very little foot traffic browsing for merchandise. The rest of Westfield was pretty quiet too, though that has always been the case with those stores chasing the HNW tourist dollar.

[potm]

Businesses come and go and get replaced by others. I don't think that it's a sign of a weak economy.
Especially when it's TRS and Roger David. I can see why they are struggling.
I use to buy some clothes from Roger David back in my uni days. There was no where near as much choice and options as there are now.

I actually think the Australian economy is doing very well, despite all the doom and gloom talk that has been persistently around since the GFC.
GDP growth is strong, population growth is still going strong, jobs growth is great. Per capita growth is not as great due to weak wage growth but the overall pie is still growing strongly. Commodity prices in AUD are very high. Coal and LNG exports are booming to join iron ore in creating strong trade surpluses. International students and tourism keeps notching up year after year of strong growth. The numbers show that Australia is in the best shape it's been in a long time.

House prices are coming off after some significant gains. There's lots of infrastructure spending which will help cushion any impact on construction.

There's lots of risks overseas though and if others sneeze, Australia could easily catch a cold.

[BRAFRA]

Are you or did you think of becoming a business partner in a small business like a cafe, restaurant or cleaning company?
What are the reasons behind your choice of investing or not investing in this type of opportunities?

[Andy R]

Are you or did you think of becoming a business partner in a small business like a cafe, restaurant or cleaning company?
What are the reasons behind your choice of investing or not investing in this type of opportunities?

For me it it is too high risk/return. For others I think it is the want for a passive income.

I would be ok with long working hours involved in a business, and I would like to be a partner in a business if I felt I had any ability to contribute and succeed, but I don't and the thought of working up to 100 hours a week for up to 5 years only to end up with nothing when businesses fail like 90% of the time stops me. So for me the risk/return is too high. When there is such a high risk of having nothing at the end of it, that's beyond my risk tolerance. Maybe if I was financially independent and could still be ok if it ended up flat on it's face, or if I had some information indicating the business had a higher chance of being viable, that would be another thing.
Other reason is the passive nature of index investing. Many don't want the long hours and prefer to just get their money working for them instead of them working for money.