Wednesday, October 8, 2025

Know your numbers



This is a great post by my friend Alan Miltz 

So many brilliant entrepreneurs I meet confess the same thing:  ðŸ’¬ “Finance feels like a foreign language.”

The truth? It doesn’t have to.

The most successful founders don’t try to become accountants. They learn how to interpret numbers the way a pilot reads an instrument panel — simply, clearly, and with focus on what matters most.

Here’s a starting point:
 ✅ Cash flow — how much is coming in and going out
 ✅ Gross margin — how profitable your product or service really is
 ✅ Debt vs equity — the fuel behind your growth

When you strip away the jargon, financial fluency becomes one of the most empowering leadership skills you can build.

Would you like to interpret numbers so you can focus on what matters most? 

What are the 6 factors underlying your cash coming in ?


1. Your customer base x 2. Retention 

Plus 

3. New customers x 4 Conversion

=

Total customers

X

5. # of times that buy per year 

X

6. Price per transaction 

=

Equals total sales 




A small change in any of these factors can increase your sales exponentially .


A tiny 1pc change in each of these factors factors can help you create exponential growth 


I have built a model that will calculate scenarios with assumptions 


Would you like to spend 30 minutes with me - and I will do this with you for free 

Or

I can send you the model for you to fill in 






Wednesday, October 1, 2025

Housing Affordability in Australia: Why a 5% Deposit Isn’t Enough



The Federal Government’s Home Guarantee Scheme has been welcomed by many first-home buyers. By lowering the deposit hurdle from 20% to just 5%, it promises to cut the savings timeline by up to seven years.


But while the deposit gap has been narrowed, a far bigger problem remains: the income-serviceability gap. Put simply, Australians can now save a deposit sooner — but they can’t borrow enough to buy at the government’s price caps.

Understanding the 5% Deposit Home Guarantee

Under the scheme, eligible first-home buyers can purchase properties at capped prices with just a 5% deposit:


  • Sydney: $1.5 million cap → 5% deposit = $75,000 → loan required = $1.425m
  • Melbourne: $950,000 cap → 5% deposit = $47,500 → loan required = $902,500
  • Brisbane: $1 million cap → 5% deposit = $50,000 → loan required = $950,000


These numbers look attractive at first glance. However, banks assess borrowing power with a serviceability buffer (typically 3% above the loan rate, as required by APRA). That’s where the gap appears.

Borrowing Power vs Loan Needed



Here’s how borrowing capacity stacks up at different household incomes, using standard assumptions (30% of disposable income available, 30-year loan, 6.25% rate + buffer):

Household Income

3% Buffer (9.25%)

2% Buffer (8.25%)

1% Buffer (7.25%)

0% Buffer (6.25%)

$130k

~$376k

~$412k

~$453k

~$502k

$160k

~$463k

~$508k

~$559k

~$619k

$200k

~$579k

~$635k

~$699k

~$774k

$240k

~$695k

~$762k

~$839k

~$928k

Now compare these figures to the actual loans required:


  • Sydney: $1.425m
  • Melbourne: $902.5k
  • Brisbane: $950k



Even households earning $240,000 a year fall hundreds of thousands short of what’s needed to buy under the scheme.





The Real Issue: The Serviceability “Mind Gap”



This is the hidden challenge in Australia’s housing affordability crisis:


  • Buyers can now save the deposit faster, thanks to the Home Guarantee Scheme.
  • But they cannot service the loan, as banks require incomes 2–4× higher than the median.



Without intervention, many households will save a deposit, only to be told by lenders that they don’t qualify for the mortgage.





Solutions: Shared Equity Schemes and Investor Partnerships



To bridge this affordability shortfall, Australia can draw lessons from NSW shared equity schemes and international housing programs.



1. Shared Equity Model



Government or private investors take a 20–30% equity stake in the property.


  • Buyers borrow less, aligning repayments with their income.
  • Partners share in future property growth.




2. Income-Linked Housing Support



Support scales with household income:


  • Higher earners may need just 10–15% equity help.
  • Lower-income households may need 25–30%.




3. Investor-Backed Bridge Funding



Private capital pools co-invest with home buyers.


  • Buyers reduce their initial debt burden.
  • Investors gain exposure to residential property growth.
  • Exit options: buyer equity buy-back or shared sale proceeds.






Why Shared Equity is the Missing Piece



The deposit gap has been addressed. The income-serviceability gap has not. Shared equity and investor-backed solutions:


  • Make home ownership accessible sooner.
  • Spread housing risk between buyers, government, and investors.
  • Reduce financial exclusion for middle-income households.
  • Provide investors with stable, long-term exposure to the property market.






Final Word



Australia’s housing affordability debate must shift from deposit assistance to serviceability solutions.


If governments, lenders, and investors work together to create scalable shared equity partnerships, the dream of home ownership becomes achievable again — not just for high earners, but for everyday Australians.