The Sumo Group of Companies Economic History Pre

The Sumo Group of Companies

Economic History • Pre and Post GFC • Glass-Steagall Act Repealed in 1999 • Banks Too Big to Fail – Governments Step In • Sovereign Debt Crises – Reserve Banks to the Rescue

Key Issues for Key Economies • Europe – Uniform Currency but Political Diversity • USA – Huge disparity between Public and Private • Japan – Aging Population and Deflation • India and Asia – Living Conditions

How does the Macro Economy Interact with Personal Wealth Gain ?

Golden Principles of the Past Macro Environment Now Challenged � Buy and Hold is a Safe way to Invest vs Affordability � Share markets Always Outperform – Is this True with Monetary Printing ? � If its all too Uncertain, keep cash in the Bank !! Is there a New Paradigm ?

These are Unprecented Economic Times !!

Relative debt positions

Sustainability of Debt - USA • US Tax Revenue - $2, 170, 000, 000 • Federal Budget - $3, 820, 000, 000 • New Debt - $1, 650, 000, 000 • National Debt - $14, 271, 000, 000 • Budget Cuts - $38, 500, 000 OPTIONS : Raise Taxes, Lower Government Spending or Borrow more ?

Let’s Assess the Facts • Have All the Economic Bullets Been Fired ? • Too much Capital chasing Too Little Yield • Changing of the Guard – The Risk • Which Country is Most Likely to be Left Still Standing ?

AUSTRALIA

Australia’s international standing Organisation for Economic Cooperation and Development (OECD) Better Life Index 2012

Australia’s Economic Position • 12 th largest national economy by GDP (US$1. 57 trillion) • 8 th largest Stock Exchange in the World • Global trading valued at $627 billion (Financial Year) • The Test of Time ?

Australia’s Track Record • 1987 Stock Market Crash • 1997 ASIAN Currency Crises • 2007 Global Financial Crises

KNOWLEDGE TEST • Which Country is the biggest Investor in Australia and Why ? • Which Country had the 2 nd best Performing Stock Market in the World over 100 Years ? • Why has the Australian Economy been Growing Consistantly ?

Where do we Start to Build Wealth in the New Economic World?

Where Money Printing Ends Up – On Real Assets, in the Safest Economic Geography !

What About Property ? Sydney Morning Herald ANZ tie-up looks to boost Chinese investment in Australia The Australian-18 hours ago “This will not only support the growing two-way trade and investment relationship between Australia/New Zealand China, but will also help. Source: Residex

AUSTRALIAN PROPERTY There a range of important factors that point the overseas buyer to invest in Australian residential real estate. v Stable and transparent government v Provision of optimum yielding prime grade assets. v Strong economic performance –GDP growth. v Well maintained and improving infrastructure. v A skilled and educated work force. v Australian Government encouragement to offshore buyers. v Compares highly against other Asian property markets.

Is Property a Good Investment ? • AFFORDABILITY higher NOW despite higher Prices • Government Incentives – Tax and 1 st Home Buyers • Ratio between Supply and Demand • Restricted Finance to developers

Major Cities Sydney New South Wales SUMO AUSTIN GLOBAL WEALTH Brisbane Queensland Melbourne Victoria Gold Coast Queensland

Where does one start to Find Opportunities in Australia ?

INVESTING IN AUSTRALIA Some Key Financial Facts…

Key Facts CHINA AUSTRALIA Borrowing Rate 5. 65% 4. 5% Rental Yield Borrowing Rate 2. 6% 5% Rental Vacancy Rate 22. 4%** 1. 4% (Sydney)* Source: * http: //www. yourmortgage. com. au/article/rental-yields-in-sydney-set-to-rise-as-vacancy-rates-plunge-78808. aspx Source: ** http: //www. chinanews. com/gn/2014/06 -10/6265850. shtml

Key Facts Continued CHINA AUSTRALIA Land Use Right 70 YEARS 99 YEARS (Apartment) Freehold land no time restriction If You Invest Under Construction (“Off the Plan”) 30% and repayment starts after contract is signed You pay only 10% now 90% on Possession(“completion”) 10% is held in Escrow (“in trust”) Source: http: //www. chinasmack. com/2013/stories/chinese-land-use-rights-what-happens-after-70 -years. html Source: http: //www. ausproperty. cn/instruction/61971. html Source: http: //mt. sohu. com/20141223/n 407219454. shtml

Key Facts Continued CHINA AUSTRALIA Property Growth Rates* (2015) Average was higher than Sydney, while it is declining Sydney 6 % Loan/ RMB Repayment Method AUD Exchange Rate Interest + Principle Interest Only AUD / RMB Exchange Rate RMB 4. 6= 1 AUD(was 6. 7) BEST TIME TO INVEST! *Source: http: //www. globalpropertyguide. com/real-estate-house-prices/I Source: http: //www. boc. cn/sourcedb/whpj/enindex. html Source: http: //www. zhihu. com/question/27310210/answer/36091343

Typical Property Investment Property Value $750, 000 Your Investment - 10 % on contract $75, 000 - 10 % on settlement $75, 000 Other Costs - Stamp Duty + legal + accounting(around) * $35, 000 Total $185, 000 Property Value grows by @ 6 % of $750, 000 Year 1 ($795, 000 – $750, 000) $ 45, 000 Year 2 ($842, 700 - $750, 000) $ 92, 700 =RMB 426, 420 Year 3 …… …… *Stamp duty varies from State to State

Loans can be “Interest Only” Value $1, 343, 234 Value $750, 000 Loan $600, 000 1 2 3 4 5 6 7 8 9 10 Years The longer you hold the property, the more value you received

How to Manage the Mortgage? Income / Expense Working Income Rent Received Monthly ( @ 5 % of Value ) $3, 125 Expenses Interest on Loan ( @ 5 % of Loan ) Other expenses* Total Expenses $2, 500 $529 --------- $3, 029 ====== This means you do not need to worry about the loan as the rental can almost cover the mortgage as Australia has lower Rental Vacancy Rate. * This rate is based on average Water, council , strata and agent service fees, they may vary from case to case.

What we can do for you ? 1. Selection of appropriate property for you 2. Legal – assist you in conveyance of the property 3. Arrange for the Bank finance (Loan) a. Property Management b. Finding the tenant c. Managing property d. Collecting rent 5. Accounting services 6. Cross border tax advise 7. Assist in selling your property