Welcome to Finance & Fury, the ‘Say What Wednesday’ edition. This week’s question comes from Gab;

“Hi Louis, I was looking at different asset classes and how someone could get exposure to them (outside superannuation) and got stuck on “fixed income”. If I understand this asset class correctly, if you hold to maturity you get all the capital back. But if you buy ETFs or managed funds you lose this benefit (as you basically just get exposure to the secondary market). Also, I thought the fees were ridiculous, especially with active managers charging 0.5%, when the long-term return is 5-6%. What are your thoughts on this? Thanks, Gab (keep up the good work!)”

Hi Gab, Great question!

Today we’ll focus on explaining Fixed Interest in straightforward terms;

  • What are Bonds, why do they exist, and how do they work?
  • Price, ‘Face Value’ and coupon rate
  • Buying and selling bonds
  • The effects of interest rates on the value of bonds
  • Bond managers – Managed funds or ETFs
    • The role of Bond Managers
    • Costs compared to returns
    • Index bonds
    • Active managers
  • Why buy bonds or other fixed interest assets?
    • Downside protection
    • Higher yield than cash
    • Middle ground to cash
  • The risks and disadvantages
    • Ratings system
    • Maturity
    • Duration
    • Interest rate movements
  • What I look for when buying bonds
  • Franking credits on coupons

 

If you have a question, or want us to cover something else in more depth, let us know at the contact page https://financeandfury.com.au/contact/

Thanks again for listening guys. Until next time!

Crony capitalism and Modern Monetary Theory in action!

Welcome to Finance and Fury, the Furious Friday edition. Today we’re looking at Modern Monetary Theory in action. The first stage, how this is going to be practically done, involves the merging of the central banks and Government Treasury. We’ll also look at the...

The circular economy – The greatest barrier to competition and choice, or the saving grace for our futures?

Welcome to Finance and Fury, the Furious Friday edition Last week - went over partnership programs and potentials for coercive monopolies – today – implementation of policies in the circular economy – SDG12 Today’s ep – go through google and the largest companies on...

Say ‘What’ Wednesdays: Is it time to jump ship? Should you sell your bank shares?

Say 'What' Wednesday Is it time to jump ship? Should you sell your bank shares? Today’s question comes from Jake. He asks “should I sell my bank shares, given the recent fall out from the royal banking commission?” IMPORTANT: This episode comes with a general advice...

We’re addicted to easy hits of dopamine, and it’s impacting our ability to build wealth

Episode 22 We're addicted to easy hits of dopamine, and it's impacting our ability to build wealth Today we will talk about the fundamental principle of being wealthy. It’s very basic, and, if you get it right, you will start to accumulate wealth…which is the whole...

What will be the next market interventions from Central Banks to achieve inflation targets?

Welcome to Finance and Fury Talked about the inflation targets, interest rates and monetary policy over the past few weeks – Today – go further into looking at a completely controlled economy by Central Banks – To start – look back to an RBA paper from 1975 – this was...

Say What Wednesday: Makin’ coin flippin’ houses

Welcome to Finance & Fury’s Say What Wednesday Today’s question is from Lucas, “Hey guess, just wondering if you think that flipping houses is a good strategy? Can you really make a living flipping houses?” Good question! Flipping houses has become very popular...

The Lucky Country isn’t what most think – A look back in history on how we are destroying our own luck

Welcome to Finance and Fury, the Furious Friday edition A reminder of how lucky we are and why we are called the lucky country. Also, what we have to lose if we neglect to remember this Some perspective: You don’t know what you have until you have lost it Taking...

What types of superannuation accounts allow you to control your investments?

Welcome to Finance and Fury, the Say What Wednesday edition. This week, the question comes from Andrew: "Last episode you mentioned super and a product that lets you invest in third party platforms. Would like to hear more about that." What is super? Most people think...

Why is talking to your kids and family members about money so important?

Why? – nobody else will help to confer information and thus Teach them about value of money – Kids don’t understand value of not just money as a medium of exchange – but that their time has valued attached to it – I don’t think some adults know that either At the very...

What happens when a family trust comes to the end of its life? What happens with the assets and are there CGT or stamp duty liabilities?

Welcome to Finance and Fury, The Say What Wednesday edition.  Today's question comes from Gab. Hi Louis, thank you (as always) for the great content. I've got another question that I've struggled with recently, and I'm hoping you can shed some light on the topic. I've...

Pin It on Pinterest

Share This