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Increasing your wealth, democratically

18022020_Democracy

Increasing your wealth, democratically

Many Australian investors typically count their home as their largest asset. Perhaps followed by their share portfolio and superannuation. But could it be that the most valuable asset for an Australian investor is that they’re Australian?

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Andrew Macken is the Chief Investment Officer of the Montaka funds and the Montgomery Global funds. He established MGIM in 2015 in partnership with Montgomery.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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7 Comments

  1. Great article Andrew. This is part of the reason that Australia, New Zealand and the Scandinavian countries as well as the Netherlands constantly rank very highly on measures such as house value to salary ratios.

  2. I don’t believe so, Andrew. In a corporate culture sense, Australia falls behind in that if you are successful in anything else (except sport), you’re torn down.

    So if you’re successful in business, you’re seen in a negative light. If you’re a world class scientific researcher, no one cares because you’re an “academic” (hence, all our scientists go to Europe or the USA, where they are actually respected and paid properly).

    That’s not the way to get better in society. The efforts of businesspeople who have taken on risk, made sacrifices, worked extremely hard (often with no Government help or tax breaks) to turn a small business into something big (and then help to employ people) is the same as those people who work hard to be elite sports stars or athletes (who, mind you, are very well rewarded through sponsorships), yet we talk about the former as being “lucky” or look down on them for being wealthy.

    Australia also has a big problem recognising what migrants and especially expat Australians bring, in that they don’t value overseas experience and work. In almost any other country, to be an executive in an international company (FTSE100 or Fortune500), you’ve got to have “done your time” overseas in a foreign country, in an arm of the business to even be considered for the top level of management. It shows emotional maturity, resilience, ability to adapt and learn.

    My experience is that here, it’s all discounted as “well, you went to Europe for 2 years and learned two other languages, that’s nice but what did you really do ?”. It would have been easier for the expats to stay in Australia, in all honesty, because it’s far more about ‘who you know’ and ‘jobs for mates’, rather than if you’re the right person for that job or company…then we wonder why shareholder returns suffer so badly.

  3. An interesting perspective.

    Sticking to the investment mindset, how strong do you feel the “moat” around the country is considering the low cost and success of remotely lead brexit, US election and ongoing misinformation campaigns. The return on investment seems very high of such misinformation campaigns in leveling the playing field. (similar to ROI of terrorism)

    Is there a native strength to the country relative to others or has it not been as strongly targeted by malicious actors to bring down the value?

    Would be interesting to quantify this intrinsic value over time in regards to freedoms and rights. I worry that mismanagement is causing the value to drop by continuing to degrade freedoms and protections but hard data would be more illuminating. Alternatively there might be a lag between market sentiment and intrinsic value.

    I guess the bigger economic question would be around the relative drop compared to the field, do we only need to be more valued vs the peers rather than intrinsically?

    Any data points you know of that would highlight this?

  4. Andrew it may be true that Australia is one of the better places to live but price discovery is at work here. Aus has been so attractive that immigration has caused the price of things to inflate and indeed this is what has been happening with land and housing and various services while wages have been stagnant. This might suit the middle class but it also creates an underclass people some of whom think they are doing well but are mostly up to the eyeballs in debt. Freedoms are important but one need to be careful about the debt load that is carried. One day it might get to be too much and one no longer feels free but is crushed by it. Sure stop corruption but don’t get the idea that out political masters are acting in the nation’s, and its peoples, long term interests.

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