28th March 2022

Smart money weekly; ASX bounce back, getting into the property market, focusing on habits

Ben Nash

Hey team,

Happy Monday.

There’s some all-around good news in property and stocks this week. The ASX had a steady rise this week off the back of Wall St tech stocks coming back into favour as well as lithium and high profile shares like BLOCK reigniting their popularity. The Friday open was a steady increase off the back of last month.

In other news that would fall favourably with our audience, house prices in some inner and middle ring suburbs across capital cities seem to have peaked as early as September last year, as demand has waned amid a surge in listings and heightened worries about the war in Ukraine and interest rate rises. I can hear a collective sigh of relief. There’s never a ‘bad’ time to buy property, but right now might be a ‘better’ time.

Smart Money upside #61
Because people don’t often talk about the full ins and outs of their money, it’s hard to learn lessons from hearing what good and bad choices other people make. This story is from one of our clients to help you take your money game to the next level.

Numbers/Background
Couple; late 30’s, income ~$233k, total assets ~418k, savings~ $2k annually

Frustrations
Their main frustration was feeling like getting into the property was impossible. Additionally, they had no tax minimisation strategy.

What they wanted from us / the advice process
They wanted a clear savings plan that can help fund our ideal lifestyle. Having a clear, easy to follow plan to assist with this. They were also eager to learn how to leverage the tax and investment rules to help their long term financial goals.

What success looks like for them
Success looked like having a secure future, as well as having a clear and easy to follow strategy in place to follow. Confident that they were informed and educated, to help them reach their goals and feel more comfortable with their financial future.

What money strategy they were following before we went through the planning process
No current strategy in place

What money strategy do they choose to pursue from our planning work
Purchase a primary place of residence, setting up a clear banking and saving plan, investing into a diversified investment portfolio, changing superannuation to a more affordable option with investments more aligned to our long term goals and ethical considerations, and setting up an estate plan.

Key benefits of going through the process
Having a clearer picture of the amount they are saving, and a clear trajectory for where they are headed was really helpful and comforting. Knowing that by implementing the strategies they can achieve the lifestyle goals, increase their financial literacy, and have a structured financial plan.

Value of advice after all advice fees year one: $23,946
Year 20 upside after advice fees: $1,804,201

If this story resonates and you want to chat about how to get these sorts of results, you can book an intro call here.

Giving update of the week
At Pivot we know that education is very important and it gives us knowledge of the world around us and changes it into something better so we’ve supported a one year access to education for the orphans in Malawi. We wanted to help them through education empowerment, creating a level ground for children who could not access education because of a loss of a parent, absolute poverty and etc. This is all part of our ongoing commitment to make a difference in the lives of our clients and simultaneously make an impact on our world through our partnership with B1G1 (Buy 1 Give 1). You can check out more information about our giving here.

Upcoming events:
We have a huge new series of events coming up across the next few months. From saving, to building a second income, it’s all here for you. Even if you can’t make the times, click through to register and we’ll send over a recording:

Event schedule and links to book here:

Money Hack of the week: How a small change can have big effects on work.
The little things matter more than you think. Now that everyone is spending more time at home, we’re doing less incidental activity that usually comes with working in an office. I talked to Troy Morgan about improving employee wellbeing, and it all starts from the minor changes that cause a ripple effect within a business. Check out our full chat here.

Share market wrap
Australian shares edged higher on Friday, with a stronger opening on Wall Street, bolstered by renewed tech sector interest. On Thursday, Bitcoin rose to its highest level since March 3, as prices of the world’s largest cryptocurrency gained for a third consecutive day.

Key sharemarket numbers:

  • The ASX ‘All Ords’ (top 500 shares in Australia) finished the week 1.7% higher than last Friday, on 7,697.90 points.
  • The US ‘S&P 500’ (Top 500 shares in America) finished the week 2.56% higher than last week, at 4,520.16 points.
  • The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week 4.64 % higher than last week, at 14,191.84 points.
  • The Global FTSE ‘All World’ index (largest 3100 companies in the world) finished the week 1.30% higher than last week (Friday AEDT), at 7,467.38
  • The S&P Cryptocurrency ‘Mega Cap’ Index (tracking market value of Bitcoin and Ethereum) is currently at 4,773.61 for the month, up 6.27% for the month to date

Investment story of the week: Qualitas Group (ASX: QAL)
Qualitas is one of Australia’s leading alternative real estate investment managers. The company manages funds investing in debt and equity strategies. This includes five specialist commercial real estate credit funds and eight specialist real estate private equity funds. Its principal activity is as a listed investment trust (LIT) investing in secured real estate loans in Australia and New Zealand. The LIT will try to provide monthly income and capital preservation by investing in a portfolio of investments that offers exposure to real estate loans secured by first and second mortgages, mostly located in Australia. It’s targeting an 8% return per annum after fees and expenses. If Qualitas can meet its targeted annual return, its worth shortlisting on the watch list.

Money mistake of the week: A lack of focus on building habits won’t create change.
Never underestimate the simple strategies. When life gets complicated, the foundational habits you’ve created will always win out. We have more distractions than ever these days. Because of that, it’s so easy for us to lose track of the big picture when we hit roadblocks on the way. In this chat, Kate McKenna and I talked about the value of building strong, foundational habits that will pull you out of your rut and push you to a higher level in many aspects of life.  Check out our full chat here.

Jargon Buster of the Week: Reserve Bank of Australia (RBA)(Macquarie)
Australia’s central bank. In addition to setting the official cash rate in order to manage the economy, it provides banking services to the Australian government and its agencies.

In the news: Only way to get into the property market amid rising house prices
As first-time buyers are priced further out of the market, there’s only one strategy left in order to buy – but you probably won’t like it. Click through to news.com.au to find out exactly what that is.

Podcast from last week: #161 Smart Money Challenge 2 – How to budget
This is the second session in the Pivot Smart Money Challenge content. I’m bringing you in this episode the savings strategies that I found to work for literally thousands of people. Essentially how to create the last budget that you ever need backing up with the tools that you need to make it work.
And if you didn’t follow along on the last episode where I frame up the challenge, check that out or if you want a bit of a refresher as well.

For this episode, though, you will need the savings to plan a spreadsheet which I refer to. You can download that at bit.ly/savemorepivot grab the content there and be set to create the last budget you ever need.

Apple
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Be awesome,

Ben

PS: If you want a hand to get on the front foot with your money in 2021, check out our 45-minute one-on-one sessions here. We’re donating 100% of the money raised to charity, so you can up your money game and do something good on the planet at the same time.

Disclaimer:
I know you’re smarter than someone that would need me to write the words that come next, but our compliance peeps are real hard-asses so here we go… This information is not personal advice, poetry, or a map to where Jimmy Hoffa is buried. It may only be regarded as general advice, and definitely shouldn’t be considered something worthy of inclusion for Donna Hay’s next cookbook or the Archibald prize. This is actually just an email communication that has been sent to a bunch of people and doesn’t even have your name on it. Your personal objectives, needs or financial situation have not been considered when preparing this email, but I want you to know that I have spent a lot of time thinking about the Venn diagram intersection of poetry, landscaping, and essential oils – if you’re fascinated by this same phenomenon please reply so we can compare notes. You should consider the appropriateness of any general advice we have given you, having regard to your own objectives, financial situation and needs, and if necessary, seek advice before acting on it. You should also consider other people when getting on and off public transport, smiling more, eating healthy, and listening to your mum when she tells you that you’ve been working too hard. Where the information relates to a financial product, you should obtain and consider the relevant product disclosure statement before making any decision to purchase that financial product. Where the information relates to a hilarious joke I’ve made, you should consider belly laughing deeply. Worth noting also that past performance is not a reliable indicator of future performance when it comes to investments, and definitely not when it comes to the Wallabies. Financial services guide. All jokes aside and just to be clear, this information may only be regarded as general advice. That is, your personal objectives, needs or financial situations were not considered when preparing it.  You should consider the appropriateness of any general advice we have given you, having regard to your own objectives, financial situation and needs, and if necessary, seek advice before acting on it. Where the information relates to a financial product, you should obtain and consider the relevant product disclosure statement before making any decision to purchase that financial product. Past performance is not a reliable indicator of future performance.