The PROPERTY DOCTORS, Sydney Australia Novak Properties
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The PROPERTY DOCTORS, Sydney Australia Novak Properties
EP. 1450 -HOW THE PRO'S STRUCTURE FINANCES IN THEIR 30's - 50's. TIPS FROM AN INDUSTRY LEADING DEBT ADVISOR
Debt might be the most misunderstood tool in wealth creation. While most Australians see debt as something to eliminate, the wealthy understand it's something to structure strategically.
In this illuminating conversation with Vasco Duarte, a senior debt advisor with 28 years of industry experience, we explore the sophisticated approaches to debt management that separate ordinary investors from truly successful ones. Vasco breaks down how financial planning evolves through life stages – from getting your first foothold in property during your twenties, to maximizing borrowing capacity in your thirties, aggressively accumulating assets in your forties, and finally transitioning toward retirement planning in your fifties.
The discussion delves deep into crucial considerations rarely addressed in mainstream financial advice: how to effectively separate business assets from personal investments, protect family wealth when helping children enter the property market, and maintain liquidity for future opportunities. Vasco reveals that what truly distinguishes high-net-worth families isn't just their goals or vision – it's their execution capability and foresight to plan 5-10 years ahead, surrounding themselves with trusted experts who bring specialized knowledge to the table.
Perhaps most valuable is Vasco's perspective shift on what many borrowers experience as "mortgage prison." Rather than seeing lending limitations as constraints, he reframes them as potential opportunities through alternative lending sources – where slightly higher costs can be justified by the returns generated from new investment opportunities. Whether you're a business owner looking to de-risk your personal assets, a parent wanting to help your children without exposing your wealth, or simply someone seeking to optimize your financial structures, this episode provides rare insights into the strategies employed by Australia's most financially sophisticated families. Listen now to transform your approach to debt from a burden to a powerful wealth-building tool.
Guys, this morning is super interesting. We're talking with Vasco Duante, a super, super senior debt advisor. So how to structure debt is something that people really don't know where to go to get great advice. And we've got vasco on today. Stay tuned, we're gonna blow your mind. Five super sharp questions. I'm going to ask you Super quick questions, super quick answers, then we'll get into it. Vasco, how?
Speaker 2:long have you been lending for? Thanks for the question, mark, and having me on today, billy, super fast. I've been doing it for 28 years.
Speaker 1:Sorry, how long was that a cut out?
Speaker 2:28 years, 28 years, Wow Types of clients that you love to look after, I guess anything between business owners, high net wealth families. I think that's where, potentially, I can create and add the most value. So, um, complexity and looking at making it simple is probably the biggest thing I can add value to you do it all over australia yeah, um, I guess my network has been all around Australia.
Speaker 2:As I was working at the previous bank, it was a national team, so there is not a problem where it would be between me flying or digital era these days and getting video calls not an issue.
Speaker 1:All right, love it, billy over to you. So thanks for coming on, vasco. Um, we've got billy here as well. Let's talk structuring debt.
Speaker 3:Yeah, this is such a good topic. So many clients you know are finding finance often that the biggest hurdle in their um journey to buying another property. I guess you're seeing it right through multi-generational families as well parents helping kids. Other way around, people trying to set themselves up for retirement when does the preparation start? Is it in the 20s and 30s or do you find it's in the 40s and 50s, going into the second half?
Speaker 2:it's in the 40s and 50s, going into the second half. Great question, billy. I think it starts as you are looking at your first home. You know, being someone that bought their home first home at 19, I think the experience there is very simple just get in the market, doesn't matter where it is, get in and get your first deposit. As you get into your 30s, you have the maximum opportunity where you're starting to get to a level where most of your student debt's gone away. You now have the ability to borrow and you've got 30, 35 years in front of you. As you get into your 40s, you're starting to think about wow, these debts now, at the peak, I'm earning the most. That's when you really start accumulating assets and you go hard um so like my perspective.
Speaker 2:If you're 20, 30, 40 or 50, there's a stage for everything. And when you get to your 50, you start thinking about I'm retiring in 15 years. How do I start digesting, divesting some of the the assets? Digesting, divesting some of the, the assets yeah, that's like the, those engine, engine workroom years of your life. Yeah, I guess, I guess.
Speaker 2:So you know, parents these days have to help their kids getting into their first home so that technically, generally, they're in their 50s and it's quite important as you have kids I've got kids is how do you position to support your kids? And a lot of confusion around giving personal guarantees, ability to. I'm just going to give them cash. There's, there's other ways that you can do the same without putting assets at risk in your own personal situation, because marriage is not easy regardless, as we all know, and and when you're marrying someone, that thing can turn very different. So you structure things early for your kids will give you a lot of opportunity amazing.
Speaker 1:Mark. So, vasco, when, when a client, when a client comes to you, what's the most common question you're getting asked now as as a sort of dead advisor, what's the what's the number one when people ring up and go hey, vasco, what do they ask?
Speaker 2:yeah, um, I think I think the main thing obviously htl private office is ultimately for high net worth and business owners. So two typical questions would be um. One typical question is how do I separate my business from my personal investments? How do I de-risk myself? Um, and obviously that first that with that question leads into a lot of businesses give their personal guarantees in their prime place residents as security de-risking. That is quite important, separating them. And and with that then follows the next question is what is ultimately the best structure that you can get in the market In price? It is a conversation, but price can't be the sole driver, because the sole driver ultimately is ability to separate those assets and still being able to have liquidity, to have opportunities, because those type of clients, when you look at that, you want to have liquidity and ability to look at opportunities.
Speaker 3:So, Bas is this about? Are you finding de-risking, or is this about?
Speaker 2:maximum maximizing borrowing, or is it always both come hand in hand? They go hand in hand because people can lend you money. Um, the question is is that ultimately the best structure for you? So you think two, three steps ahead, not from today. So if the conversation is a business owner is trying to sell their business in 15 years time or 10 years time, then ultimately that that liquidity is equally as important. Um, so it's both you that they're thinking of the future.
Speaker 1:Sure, yeah, wow, and it's actually an interesting one, because there's not really a place to go for this. So I guess this is and these are individual people that are really having to see it with laser beam around the corner 5, 10, 15 years ahead they have to share this information with you. They've got to share this information with their account and they're going to share this information with their lawyer and their business. You know people, you know what they're doing in their business and have that ability to to structure themselves with you in a long-term fashion. You wouldn't even think that happens in the world, but I guess that's pretty common with the high wealth clients.
Speaker 2:I guess, if we look at the current value of real estate in Australia and home ownership is really very important and I think it's everyone's dream to have that.
Speaker 2:I think we're now getting into our 40s and what you thought was a million dollar property is now two or three. But on the luxury side in Australia, in Sydney, we're looking at a $4 million asset. If we look at the trajectory of that in the last 10 years, that $4 million is going to be $10 million, say, in 15 years. So what is the goal of that $10 million asset that you now have? How are you optimizing it and how are you then dilating that value at some point to create income?
Speaker 1:Yeah, got it and I think I'll offer. You mentioned the um. We started, we talked, we touched on mortgage prison. So you do get calls from clients that are like they've got mortgages and they sort of can't really move to different interest rates or different structures because they don't stack up. Their actual stuff that they have now doesn't stack up. Are you seeing a lot of people in mortgage prison?
Speaker 2:I think mortgage prison talks in a way potentially, the way that we're looking at it is mortgage stress potentially, or inability to borrow more. I guess the reality coming out of a major is that ability to borrow is there regardless. There's three tiers of lenders there's your main banks, there's your second tier and then ultimately there's your private credit, which is very big in today's world as we are seeing. I think the mortgage prison, I think that language these days is one where your bank is not letting you go, so mortgage brokers ultimately have the flexibility to look at the best deal and structure for you. I think you know the cost. It's a conversation, potentially could be dearer, but the return of your new asset or that particular asset that you're looking at, or gearing that you're looking at, might be a. You know, have a yield of six or seven. So therefore paying an extra 50 bps to one 1% in your next lender is is an opportunity. So that mortgage stress conversation traditionally a mortgage prison turns into an opportunity. What's the opportunity looking at?
Speaker 3:that's I've got to ask. The clients that you meet must be some amazing um family's backgrounds. What are they doing differently to the average family, and can you take those tips and apply it to the everyday scenario?
Speaker 2:Yeah, I think you know I've been very fortunate of the families and individuals I've looked after the last 28 years, you know, from business owners to entrepreneurs and and lucky enough to have strong relationships with some of the top brw within australia. But I think that the main thing is that they they've got a goal, they've got the vision, but execution is technically what's what's lacking, and that execution could be getting the right advice, so getting getting them. They get surrounded with people that they trust but also have the expertise, and that's very big. You know, I'm not an accountant, I'm not a lawyer, but I want to have people beside me that are very good in those fields. And the same thing goes for a debt advisor or a business advisor, your CFO, for example. I think having people that ultimately have those expertise, then they can execute and have the opportunities.
Speaker 2:So ability to get into. The next opportunity they see is around planning, so they do plan.
Speaker 3:Yeah, and is planning that five, ten year ahead the biggest thing that sets them apart?
Speaker 2:I guess you know, ideally the conversations I bring to the table are around that, billy, not necessarily everyone's thinking that far, but the minute you touch on, what are you thinking about with your kids and what does retirement look like and how do you get ready for that? How do you optimise some of the structures available? And it's not about avoiding tax, but how do you ensure they are tax savvy in relation to what the next investment looks like? I think they're very keen to talk about that. 100%, yeah, that makes sense.
Speaker 3:That's the focus, fascinating. And so what point do clients reach out to you Like? Do clients reach out to you Like, do they reach a personal or a business level? And they say now is the time we employ someone for services like that?
Speaker 2:Look, I think, like anything, the HDL private office will service any of the family's needs. So if the kids are looking at buying their first home, we're there. If the kids want to get their the first home, we're there. If the kids want to get their first car, we're there. I think, uh, the it's a relationship-based service, so we're not there just for the short term as a private office. We're lewd. It's not a family office, but we ultimately work with families that you know don't have that in-house support, but we're ongoing, having conversations with all their ecosystem, regardless. If they're an accountant, they're a lawyer, we will be there with them along the way.
Speaker 3:Yeah, fascinating.
Speaker 1:Mark, can you hear us? I can sorry, I've got a bit of crackle in the background.
Speaker 3:A bit of crackle. Sorry about that. Yeah, the line's a little bit crackly. Any finishing questions, Mark? No, we can go on again, Pastor, because unfortunately I think we had a bit of a bad line this morning.
Speaker 1:But thank you so much. There's so many questions I've got. Thank you so much. It's very, very interesting hearing what the people in the town are doing, because I think on all levels, because I've learned from that on all levels I'm just thinking of you, these guys and there are experts are creating the world that's going to hit what we're all up to.
Speaker 2:Billy, can you translate that?
Speaker 3:Yeah, no problem, that's Serbian to English Vasco.
Speaker 2:Thank you so much for coming on this morning.
Speaker 3:It's great to get insight from someone that you just don't meet every day, so I'm sure we're're gonna have clients reaching out on the back of this, will flick them your way and um, have a great day. That. That is the. That is what the pros are doing from their 30s to 50s.
Speaker 2:You know amazing, amazing advice there thanks billy, and Thanks Billy and Mark appreciate it.
Speaker 3:Have a good day. Have a good day, guys, take care, thank you.