Just last year, we defended comments from Andy Kessler, who suggested the collapse of Silicon Valley Bank (SVB) may have resulted from the team “being distracted by diversity.” 

Yet, it’s when pressure is applied that change happens. 

Take COVID-19 as a recent example. Employee demand to work from home and flexibly was growing, yet companies were painfully slow to respond. Then, a global pandemic took hold, and we saw an unprecedented acceleration in the enablement to work remotely. 

Post-pandemic, we commented on this trend, wondering what significant event could put a rocket up the stagnant progress happening in the DEI space. Enter the legal battles in the U.S., placing the whole industry under fire. 

This presents us with an opportunity and we need to make the most of it. Below are three ways organisations can safeguard and optimise the effectiveness of their DEI efforts. 

1.       Evolve from DEI initiatives to DEI integration.

DEI efforts are most impactful when embedded in the organisational strategy; they become much easier to defend when they are integral to a business’ success.

Don’t silo DEI in HR, it impacts every aspect of an organisation. Placing it solely under HR can diminish its impact, often making it the first to be overlooked. HR traditionally focuses on risk mitigation to safeguard the organisation, but DEI thrives on risk-taking for value creation. It should be treated as an essential function that is a key contributor to business performance.

To achieve this, DEI should be owned by business leaders, with key metrics embedded into business unit KPIs. Further, it needs to be woven into the way of working for all teams, with inclusive behaviours being the status quo and equity being top-of-mind across all hiring and promotion decisions.

2.       Walk the walk before talking the talk.

To date, DEI has primarily been treated as a tick-the-box exercise, with efforts focusing largely on brand image rather than lasting and impactful change. As external promotion of DEI efforts becomes increasingly scrutinised, it encourages us to move beyond surface-level initiatives that focus more on external perceptions and towards those that drive impact and progress internally.

Organisations can take the opportunity to assess the current initiatives they have in place and what their expected outcome is. Every initiative should be closely linked to a business priority, with mechanisms for measurement of effectiveness in place. Activities that are just for show should be challenged; they are taking money, effort, and resources away from actions that drive true and lasting progress.

Gone are the days of being able to bluff our way out of DEI scrutiny. In Australia, we’re on the brink of gender pay gap data being publicly released. Organisations will have the opportunity to release a statement to defend existing gaps. Still, for them to be regarded, they will need to demonstrate tangible steps that are being taken and the expected outcome of these. 

3.       Tweak positioning and messaging, not effort.

Responding to DEI backlash has been a requirement for as long as the discipline has existed due to the redistribution of power, the inevitable resistance to change, and the “perceived” threat it brings. The focus and sensitivity we should have is on how efforts are being communicated and positioned with a consistent talk track and rationale across the board. 

When launching or rolling out a new DEI initiative or project, organisations must be clear on how it has come about, how it’s intended to support the business, and the role all employees play in supporting it. Consider employees’ different perspectives, anticipate the threats they may perceive as a result of suggested initiatives, and address these proactively in your communication strategy. 

It feels like DEI as an industry is dealing with one new challenge after another. Still, we’re optimistic about the opportunity this time presents for realising what we’ve all been working towards for years: for full DEI integration to be the natural and expected way of doing business.

The post Why DEI ‘being under fire’ is a good thing appeared first on Women's Agenda.

Manal al-Sharif, Malala Yousafzai, Ellie Cole, Dr Lois Peeler and Phearong Sdeung and others shared their inspiring stories, outlining what it takes to push through seemingly unbreakable barriers and put yourself forward as a spokesperson for others without a voice. 

Their stories and advice were invaluable to the 450 business leaders in the room at the August event, held two days before the 2023 FIFA Women’s World Cup final, with Coca-Cola being a major sponsor of the tournament. 

Below are some of the key takeaways from some of the remarkable women who took to the stage. 

‘It was about driving our own destiny’ 

Manal al-Sharif was a key player in the movement to win back the right for women to drive in Saudi Arabia. Back in 2011, she posted a video of herself driving on social media during the Arab Spring, sparking intense backlash in the Kingdom. But it was her activism that helped launch a movement that ultimately saw the ban on women driving overturned.  

Al-Sharif told attendees at the Coca-Cola summit about being jailed for nine days, and what it was like to be exiled from the country and separated from her son.  

“We won the right to drive. It wasn’t about driving cars; it was about being seen, being heard. It was about driving our own destiny,” she told the summit in Sydney.  

Her key advice to those at the summit? In bringing about change, silence is costly.  

“The cost of silence is even more because in silence, tyranny and injustice happen more” she said. “What if we all spoke? That is deafening. That is unstoppable. Those few brave won’t be singled out and targeted.” 

Holding on to culture is paramount 

Yorta Yorta and Wurundjeri woman, Dr Lois Peeler, highlighted the importance of connecting to culture.  

As an Aboriginal woman and respected Elder, Dr Peeler said her lived experience has taught her many things about what’s needed for young Aboriginal people to thrive.  

“I’m Aboriginal, a woman, and I’ve been around long enough to have lived experience,” Dr Peeler said.  

“Giving young women the opportunities to have preferred futures and choose what they want to do. Holding on to their culture, and being proud of who they are as Aboriginal people.” 

Truth-telling is key to this process and essential if we are to close the gap in outcomes for Aboriginal and Torres Strait Islander peoples, Dr Peeler explained. 

“We are still trying to close the gap. We are not represented in these corporate bodies, and barely in the public sector,” she said. “It comes back to education and providing opportunities.” 

“It’s about the entire Aboriginal and Torres Strait Islander population. It’s about corporate responsibility. It’s about truth telling and creating opportunities so the young women and men can make the decisions about what’s best for them.” 

Difference can be a superpower 

When Ellie Cole was 2 years old, she was diagnosed with cancer. After a year of chemotherapy and unsuccessful clinical trials, her parents made the shattering decision to amputate her leg.  

“I was born a fully able-bodied girl, but as soon as I came out of that operating theatre, I was branded with the word ‘disability. I was a girl who didn’t know I was different until I was told that I was.” 

Fast forward to 2000. Cole was 9 years old and Sydney was hosting the Olympic Games. She fell in love with the heroes of swimming and realised that’s what she wanted to do.  

But there was a problem. “I was chasing a dream that was never going to happen for me,” Cole said. 

“I didn’t know anything about the Paralympics, because it didn’t exist in the media. I didn’t see anyone who looked the way I did.” 

Fast forward another two decades and Cole made history at the Tokyo Paralympics. She became Australia’s most decorated female Parlaympian of all time. It was an achievement like no other, but it didn’t come without struggle. 

“It’s really hard to feel like an Olympian when you are made to feel invisible,” Cole shared. “I was always reminded that I was less than them. I was always reminded that I was “just” a Paralympian.” 

And Cole’s key learning? There are three types of people in this world including: 

1. those who make things happen 

2. those who watch things happen 

3. and those who wonder what just happened.  

We must realise the power of education 

Her first name is known all around the world. Her survival after being shot in the head by the Taliban is a miracle. And it’s a miracle that Malala Yousafzai uses every day to fight for the rights of others, particularly girls who are being denied access to education.  

“I think the Taliban have figured it out. They don’t want women to have a voice,” Yousafzai told the Coca-Cola summit. “They know the best way to deprive women of their rights is to never let them learn.” 

“The best way to fight back is to educate women and educate girls. Education is one of the best equalisers.” 

At the summit, the Nobel Peace Prize winner shared the story of her beginnings in Pakistan, her survival, and the years she has dedicated to being an activist for the rights of girls. She also spoke about her desire to keep learning every day, even though her formal education is over for now. 

“I realised that I cannot stop my journey as a student. We have to keep learning from the experts,” she said. “We have to keep learning from people with wisdom. We have to keep learning from people with experiences. We have to keep learning from people who are a lot younger than us, who see the world in a very different way.” 

Yousafzai is also advocating for the recognition of the Afghan women’s national football team, who are living in Australia in exile, and were not included in this year’s FIFA Women’s World Cup.  

Empowering women at the grassroots is critical 

Executive Director at Banteay Srei, Phearong Sdeung is passionate about giving women in Cambodia access to finance, mentors, and support so they thrive in a country that has few female role models. 

Speaking at the Coca-Cola summit, Sdeung shared her insights into the state of play for women in Cambodia, and how she is working to empower women at the grassroots so they can become leaders in their communities.  

“Women have a lack of access to finance,” Sdeung explained. “We empower those in the community with access to finance so they can start their own businesses.” 

‘In Cambodia, there aren’t many female role models. When I am sitting at a table and it’s all male, I have to work out how I’m going to have my voice heard.” 

Her key piece of advice? 

“Empower those who are near you, if you can. If you have the opportunity, do it, because you never know where it could go.” 

Women’s Agenda is sharing a number of key insights from the Diversity, Equity, and Inclusion Summit held in line with the 2023 FIFA Women’s World Cup, thanks to our partnership with Coca-Cola. You can read our first piece in this series, exploring how Jessica Brown’s charity helps vulnerable women take charge of their lives.  

You can read Coca-Cola’s Level the Playing Field Report here. 

The post What we learned from global activists levelling the playing field for women  appeared first on Women's Agenda.

Understanding an organisation’s ‘why’, is instrumental in establishing more effective DEI policies and practices, driving commitment and fostering a culture of accountability.  

Global Chief Diversity, Equity, and Inclusion Officer at Coca-Cola, Tameka Harper, explained this approach during her recent address at Coca-Cola’s 2023 Diversity Equity & Inclusion Summit, Level the Playing Field, which took place during the 2023 FIFA Women’s World Cup.  

Understanding your organisation’s ‘why’ 

“It’s really about understanding your ‘why’.  Why is inclusion even necessary? Why do we need to think about it in this way?” Harper told the summit, which was held in Sydney, in August.  

Harper suggests that once organisations comprehend their ‘why,’ they should pledge commitment to DEI goals, establish what success would look like, and devise a plan to accomplish those targets. 

Alisha Fernando, the Head of Diversity and Inclusion APAC, Bloomberg, said her organisation’s media arm had intentionally worked to diversify the talent it booked in speaking slots.  

Fernando shared. “A lot of the speakers we were booking were male. We were told no one else had the experience to be able to speak.”  

So we intentionally looked at the why, and then we asked why not?”  

Fernando explained how Bloomberg took action and developed its own media training program called New Voices, and went out to other big organisations offering to train underrepresented people and voices. As a result of the program, Bloomberg is now booking more diverse and media trained speakers. 

“Our intention was there, and we’ve now seen through our organisation more diverse speakers being booked and featured,” she said. 

‘Welcomed, safe, valued and respected’ 

What about those people, especially leaders in organisations, who might be feeling uncomfortable with the changes that come along with bettering DEI practices?  

Fernando has a simple fix, and it’s something she exercises every day in her role at Bloomberg: “I tell people four words – welcomed, safe, valued and respected.” 

“I say if you strive to making sure every single person you come into contact with feels welcomed, safe, valued and respected, then you’re on your way,” she explained. “If you break it down and make it that simple, that’s where progress starts.” 

“Sometimes DEI practitioners tend to make it a bit hard for everyone, but if you’re sitting there thinking I’m scared of doing something wrong…just remember those four words.” 

‘It’s not a quota, it’s an understanding’  

Director of the TechDiversity Foundation, Luli Adeyemo told the summit that it’s time organisations start getting to know their employees better. Understanding your people is key to authentic DEI practices, and building healthy, thriving organisations.” 

“We spend billions of dollars to understand everything about the people we want to sell to…yet when it comes to our employees – who allegedly are our most important assets – what we truly know about them is the information we need to hire them. Beyond that, what do we really know about our workforce?” Adeyemo asked at the summit. 

“When we talk about equity, and we talk about inclusion, we can’t truly build the programs… if we haven’t taken the time to know who our employees truly are,” Adeyemo shared.  

“And we aren’t going to get that information unless they feel safe, and that they work for an authentic organisation.” 

Adeyemo said there is ample opportunity in the tech industry to work towards understanding employees better.  

“Let’s use tech for good. Let’s use the information for good. It’s an opportunity to understand our workforce and then do something about it. It’s not a quota, it’s an understanding.” 

Vulnerability goes hand in hand with DEI 

Co-Chair of the Women Leadership & Diversity Committee at Citi Singapore, Munir Nanji said he has learnt through experience how focusing on inclusion, and showing vulnerability to your team can be vital to inclusive leadership. 

“Flip DEI around,” Nanji told the summit. “When you bring inclusion into an organisation, it becomes front and centre, the D and E will follow. There’s also a whole point around vulnerability.” 

“When people realise we are all people, that we all have our own challenges, we all have our own goals and ambitions, and at the end, we all want to do good. Vulnerability is very important, especially in management.  

“As you move through an organisation, your shell gets thicker and thicker. We end up building our own biases and we need to understand what they are, and be able to confront that.” 

Women’s Agenda is sharing a number of key insights from the Diversity, Equity and Inclusion Summit held in line with the 2023 FIFA Women’s World Cup, thanks to our partnership with Coca-Cola. You can read our first piece in this series, exploring how Jessica Brown’s charity helps vulnerable women take charge or their lives. You can read Coca-Cola’s Level the Playing Field Report here. 

The post Understand the why, then get intentional: DEI leaders on creating change  appeared first on Women's Agenda.

Where we start life on the ladder is largely a function of ‘the ovarian lottery’.

For almost everyone, there are rungs above you representing people with more wealth and status. There are also almost always rungs below you too.

People on lower rungs might be willing to trade positions with you in a heartbeat – if it was an option.

Some people climb the ladder of society toward wealth and status with ease. Others struggle just to stay in the same spot, fighting not to slip down several rungs.

Meritocracy believers would say people who progress up the ladder do so thanks to talent, hard work and their performance. Some will tell you poverty is a personality defect.

Those who say meritocracy is a myth suggest human biases and our personal networks play a significant role in any movement on that ladder. They’re more inclined to say poverty comes from a lack of cash, not a lack of character.

Whichever your opinion, it turns out the length of that ladder – the distance between the top and bottom rungs – matters.

It impacts your happiness. And perhaps not in the way you’d think.

You might suppose that the more rungs there are – the larger the gap between the top and bottom – the happier you’d be if you’re near the top.

After all, the top of a longer ladder means you’re better off, relatively speaking, than more people. Surely that’s a little buzz of satisfaction?

If we’re measured against the metaphorical top rung – which by most metrics in Australia would be a white man – then that demographic must be happy as pigs in the proverbial, right?

Nope. At least, not as happy as they could be.

It turns out the inverse is true. A bigger gap means less happiness, not more.

Happiness is a shorter ladder

The gap between the top and bottom rungs of that metaphorical ladder represents equity.

The smaller the gap, the more equity citizens enjoy. As the gap widens, a society becomes less equitable. And everyone in that society is less happy as a result.

That’s right: inequity is making you unhappy. Yes, you. Whoever you are.

That may seem a bold claim, but I don’t need to know you for this to be true. It’s that universal.

Whether you’re on the uppermost rung – which tends to be occupied by members of majorities – or clinging to the very bottom, the more inequity in your community, the less happy you’ll be.

Those at the top are probably happy, or at least more comfortable in their misery. But they’re still missing out, because they could be happier.

Happiness is not a finite resource – there aren’t limited units of happiness in the world. If you become happier, I don’t have to give up some of my happiness.

In short, a more equitable society is in everyone’s interests. We all stand to gain from it.

How do we achieve equity?

This is no small task.

Listening to the Black Lives Matter movement in recent weeks, I gather the answer may include:

• dismantling colonialism, possibly capitalism and/or our patriarchal society too,
• rewiring a few billion brains, and
• undoing millennia of injustice.

In short, it’s clear it’s time for some big changes.

Even if some of us are in denial (I’m looking at you, Mr ‘There was no slavery in Australia’ Morrison) it seems inevitable that change must come.

Yet, I find myself sceptical that lasting change can be achieved because Western society’s track record for such change isn’t great.

I hope I’m wrong, but my fears are not unfounded.

For example, it’s been more than half a century since the women’s rights movement began, yet the gender pay gap is 22% where I live in Western Australia and the gender retirement gap was 52% in 2013/14 in Australia. We’ve had – at best – glacial progress in recent years.

Then there’s racial inequity. As a white woman, I might earn less on average than a man but I’m still a heck of a lot better off than an Aboriginal woman in WA. She can expect to earn 30% less than me. And that’s 12 years after Kevin Rudd said sorry.

She can also expect to earn 30% less than an Aboriginal man, as it turns out non-Indigenous women and Indigenous men have similar earning expectations in WA⁴. The gender gap applies regardless of race.

I take from this that systemic change is bloody hard, to achieve and to maintain.

Machiavelli captured why beautifully in ‘The Prince’:

“It ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.

Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new.

This coolness arises partly from fear of the opponents, who have the laws on their side, and partly from the incredulity of men, who do not readily believe in new things until they have had a long experience of them.”

But does that make it impossible?

No.

We just need the right tool

When faced with a massive obstacle, you can chip away at it slowly or you can blow it to pieces. The former takes a long time; the latter risks collateral damage.

…or you can look for a lever.

If we want swift systemic change that improves equity without risking collateral damage, we need to find a lever: the smallest change we can make to have the biggest impact in the shortest time.

And I reckon that lever is universal basic income (UBI).

Money for nothing

The concept of UBI is:

• Free money for all adult citizens.
• No strings attached.

That’s right. No exclusion questions. No maze of paperwork to get it. No threat of it being withdrawn at short notice.

Automatic handouts based on your age and your citizenship.

The aim: no one falls below the poverty line.

In Australia, that’s an income of $23,764 a year for a single adult. In theory, that’s enough to afford basic housing and food even if you didn’t go to work. If that doesn’t sound like much, please remember it’s about what age pensioners live on right now.

Was your first thought…

‘But handouts make people lazy and indolent’?

Chalk that up as a point for capitalist brainwashing, but it’s not true.

I won’t regurgitate all of Rutger Bregman’s collated research findings on UBI in Utopia for Realists here. Suffice to say it’s well worth a read. He found most people still continue to work and earn an income when a UBI is in place.

In summary, his other findings were:

• UBI is not a new idea,
• it’s well tested and researched, and
• time and again, UBI leads to net economic gain with positives across the board for mental health, wellbeing and equity.

If you’re curious about the stats, read chapters two to four of Utopia for Realists.

Converting an economy to a society

The upshot is that the free market model we base our economy on has reached its limits. The marginal good ‘more’ can do our citizens and country is diminishing.

We’ve got enough wealth. Now we need to improve access to it.

Which is why some people like the exceptional Eva Cox prefer the term ‘social contract’ to UBI. This is about progressing as a society so no one need live in poverty. In a country as rich as Australia, that seems a total no-brainer.

I reckon UBI’s got massive flow-on potential for race and gender equity because when your basic living costs are covered, you don’t have to choose between a roof over your head and your morals.

In short, you can afford not to put up with inequitable treatment.

For example, you can leave an employer who doesn’t behave ethically. You may be able to escape an abusive relationship. You can report discrimination. Because you won’t end up completely broke if someone with more relative power decides to cut off your money supply – whether that’s a wage, an allowance or through damage to your reputation.

If more people felt secure enough financially to do these things, might we not see societal change as a result? I think so.

Even if you can do all of the above already, UBI can still benefit you.

My basic income has meant:

• I don’t have to work with assholes.
• I can wind back my work on command to care for family members.
• I can volunteer as much as I like.

‘Wait… how did you get a basic income?’

I did it the capitalist way.

I saved, bought assets, and now derive income from them.

Which is the premise of the Financially Independent, Retiring Early (FIRE) movement.

Or Financially Independent, Time Rich (FITR) as I prefer to call it, because indefinitely ‘retiring early’ turned out to be good in theory only.

Anyone aiming for FI is doing the same thing. They’re putting a floor under their income. No matter where they are, no matter what they’re doing, their living costs are provided by their assets, not their wages.

Like a proper capitalist, I’ve played the hand I’ve got at the metaphorical poker table of life. I chose a high-paying profession so I could get to FI quicker, and I spent less than my mates to add further speed.

But I had to do it myself.

UBI brings everyone a step closer to FI

A basic income guarantee is like a socialist version of FIRE or FITR.

Instead of having to go through the process of earning, saving and investing to generate enough income to cover basic living costs, it’s a gimme.

This can help level the playing field from age 18 on, bringing us closer to an equitable society.

So, how much will this cost?

As of September 2019, Australia’s population included 19,754,496 adults, ages 18 or over. Let’s call it 20 million.

The official poverty line is $23,764 – let’s call it $24k⁵.

$24kpa multiplied by 20 million people = $480 billion each year.

So yes, this is expensive.

But you don’t actually fork out $480 billion a year to achieve it.

You use tax exemptions and deductions to deliver the UBI to those earning above that $24,000 limit. In practice, that means raising the tax-free threshold from $18,200 to $24,000. That portion of the UBI becomes foregone tax revenue as opposed to cash you have to find. Remember: most people keep working. Income from wages dropped less than 5% in one long-term UBI study⁶.

Anyone who earns less than $24,000 gets topped up to that level. Hence the idea of a ‘guarantee’.

And we haven’t yet counted cost savings, remembering that UBI has delivered a net economic gain in its experiments and case studies. Cash handed out is offset by:

• eliminating swathes of administrative cost for welfare system delivery,
• reduced incarceration rates – it’s expensive to imprison people, and
• reduced medical costs of homelessness – because everyone can afford some kind of home.

There are many other benefits with long-term upside for society, such as high school completion rates rising and teen pregnancy rates dropping. For the full rundown, again I recommend chapters two to four of Utopia for Realists⁶.

Even more important in post-pandemic world?

Do we really believe COVID-19 is our last lockdown?

Do we really believe we won’t need JobKeeper, JobSeeker, and early super access plans if another pandemic happens?

If everyone had a basic income guarantee before COVID-19, perhaps we wouldn’t have needed economic stimulus of such magnitude. We might not have seen 1.3 million people taking money out of superannuation early.

You could see a UBI as mitigating future potential losses. The risk of such losses seems quite high at the moment.

UBI is an idea whose time has come. Will we have the guts to consider it? I hope so.

We won’t be the first, but we can be next.

The post Why a Universal Basic Income is the solution to inequity appeared first on Women's Agenda.

Cross-collaterisation is a topic that often confuses many people. There are benefits of using this structure for a property purchase, but if you are thinking about building a portfolio you need to know the risks associated with it.

It is easy to be amazed at how your friends or work colleagues are buying investment properties, especially when they are on similar salaries and have similar lifestyles to you. There is no secret. What many do is use the equity they have built up in their home to give them a kick start. Over the last 10 years home values throughout Australia have increased, and in some instances doubled. This essentially provides every home owner a source of funds that they can now use. Some have used these funds to upgrade their homes, buy new cars, or make an investment, be it superannuation, shares or property.

Equity is the difference between the value of a property and the loans against the property. In this article we will be looking at using your available equity so that you too can purchase an investment property. Available equity is the actual amount of your equity that you can take out and use. Most lenders require you to keep 20% of the house value quarantined as a buffer. There are few ways that you can then access this available equity, putting it to work for you rather than letting it remain dormant. Two of these methods are discussed below:

1. Cross collaterisation. You can use the equity available in your home to purchase an investment property by securing the new purchase with both your home and the new property. Essentially this means you put no money down and the lender combines your home and investment together, giving you a new loan for the purchase price and the costs of purchase, i.e. the new loan is higher than the purchase price of the new property. The very important thing to remember with this strategy is that your home is directly linked to your investment property and the lender will take the title over your home to secure the new loan as well as the title over the new property.
2. Separate loans. This allows you to access only as much equity as you need to cover the deposit and costs of the new property as a top-up loan or line of credit against your home. Once this is done a separate loan, which may even be with another lender, is taken for the remaining funds required to complete the purchase on the new property. Once again there is no money down required from you, however the titles of your properties are separated and you have greater flexibility. Another advantage of doing it this way is you may find you have enough equity and serviceability to complete a second purchase.

There are positives and negatives with each of these structures. Those using cross-collaterisation will find that over time, lenders invariably start dictating terms, which you may not be comfortable with. For example, they will only lend you money based on the new investment loan being principal and interest, rather than the norm for investors, which is interest only. One of the main issues is that your only portfolio growth may have to stop as the bank will not lend you anymore funds. Imagine you have a house in Perth and over the last few years the value increased from $250,000 to $300,000, meaning you have greater equity to tap into. Now let’s assume you also have a two-bedroom unit in Western Sydney that was worth $250,000 five years ago, but today it is only worth $200,000.

Your portfolio is stagnant as it is still worth $500,000, despite the prices of individual houses changing. Hence the lender will be reluctant to allow you to access the equity from your Perth property. If you had followed the separate loan strategy and kept all your loans separate then it could be possible to access the equity from the Perth property to allow you to purchase again. You may even decide that you want to maximise your available equity and not use the full 20% deposit for the new investment purchase. This would mean that you will need to pay mortgage insurance. Mortgage insurance is a borrowing cost and hence tax deductible over five years for investment properties.

Many investors use mortgage insurance so that they can buy more than one property using their available equity. An often misunderstood concept with the separate loan structure is that the new top-up loan or line of credit although secured against your home will still be considered an investment loan and hence the interest will be tax deductible. One of the benefits of cross-collaterisation is that you do not have to pay mortgage insurance, as the lender is tying up all the available equity in your property rather than just the amount required.

You will find that the lenders are delighted to assist you with this structure as it makes it harder for you to leave them and difficult to separate the loans in the future so you must work with that same lender for any future purchases.

In summary, most investors want to combine the benefits of using none of their own savings with the tax minimisation advantages when buying an investment property. Releasing equity from your home in a structured way allows you to keep your savings in the bank.

Your savings could even assist you further by putting them into a 100% offset account against your personal debt, i.e. your home loan. Accessing equity in your home or current investment property allows you to leverage your current situation and use the lender’s funds to assist you in buying a property and hence buying you time in a growing market.

Property investment is a long-term strategy in assisting you in achieving your goals. The more exposure you have to a growing market the more opportunity to grow equity and in the long term the more equity you have to help you fulfil your goals.

Bear in mind that all geographic markets do not grow at the same time or at the same rate, so spreading your exposure and hence risk across different states, towns or suburbs is one investment strategy to reduce risk. So buying an investment property around the corner from your home may not give you all the advantages you imagine. Obviously you need to be comfortable that you can service any new loans and maintain a standard of living.

The post How to use equity in your home to buy an investment property: Jane Slack-Smith appeared first on Women's Agenda.