The hot seat

What was your first job?

It was working at an Amcor factory cleaning the boiler and factory floor and doing other general “dogsbody” tasks. It was a good first job and I really enjoyed it. The lessons I learnt there I continue to use today.

What’s the best money advice you’ve ever received?

I have never received good advice on money! Most of the lessons I have learnt are from trial and error. The advice I received when I was young was for a different world to the one we live in today and, like the world around us, advice around money changes. But what I have learnt is money is like a gas – whatever is in your bank account you tend to spend. So if you want to save money you move that amount into an account that is hard to access. You spend what is left and you don't touch the other account until your goal is reached.

What’s the best investment decision you’ve made?

It was to buy a gas pipeline that ran from Moomba to Botany Bay.

What’s the worst?

There are too many to choose from. I have made lots of bad investment decisions, but that is the way you learn. From bad timing into equity markets, buying at the top or selling at the bottom, and even deciding to not buy a property in an up-and-coming area of Sydney, as I didn't want the hassle of owning a property.

What is your favourite thing to splurge on?

My favourite splurge is travel. My wife and I are firm believers that happiness doesn't come from possessions but from memories.

If you had $10,000 where would you invest it?

I would invest it in a basket of exchange traded funds (ETFs) spread across the Australian, Asian and US equity markets. In the long run, equity markets are a good investment. ETFs offer an inexpensive and diversified way of potentially benefiting from the returns offered by equity markets. The Australian market is very concentrated in banks, energy and materials. Overseas markets give you better exposure to manufacturing, technology, health and other industries that are under-represented in the Australian market.

What would you do if you had only $50 left in your bank account?

This has happened to me and there is only one strategy: get whatever job is on offer, work hard but also look around for a job that is more enjoyable.

Do you intend to leave an inheritance?

Yes, but inheritance these days is for grandchildren. I also plan to help my kids as they get older and are trying to get ahead in life. The life expectancy for my grandparents was 65. Their kids were in their 40s. So inheritance was more relevant to them. These days, where life expectancy is around 85, children will be in their 60s when they inherit and it will be less relevant to them at 60 than 40. The increase in life expectancy will change the way we view inheritance.

What effect do you think Donald Trump will have on markets in 2017?

I think initially it will be positive for equities, especially Europe and Japan. It will be not so good for bond markets and will likely cause interest rates in the US to rise quicker than the market expects. The $A will probably hold its ground against the $US but the $US will rise against the euro and yen. This means the $A will also rise against these markets, which will make it a good time for travelling to Europe and Asia.

Complete this sentence: Money makes …

The world go round – after derivatives. Derivatives are not just used for financial products but also for everyday items. Without derivatives, the world would stop turning. Derivative contracts have been around longer than paper money and credit, with the first recorded mention in the Old Testament.