Not a bad time to be a crypto investor, with Bitcoin hitting an all-time high on Wednesday. The recent gains come from mainstream acceptance in the wake of the successful launch of the inaugural Bitcoin ETF. Technically, the fund does not actually own Bitcoin.
The fund holds Bitcoin futures based on the Chicago Mercantile Exchange’s Bitcoin Reference Rate. This gets the fund out of Bitcoin custody, however, this does mean that the ETF is exposed to any risks inherent in the futures market such as counterparty risk and potential margin and collateral requirements. Of course, time will tell if this works out in the favour of the investor. There may well be times when spot Bitcoin performs better and other times when futures have an edge. It’s been most interesting to see the impact that this has had on the price overall.
Giving update of the week
This week we’ve been working with a couple of new clients that are really passionate about sustainable investing, which has led me to think a lot about what’s happening on the planet and how we can have a positive impact. We’ve celebrated the time given by the amazing speakers we’ve had on the show by furthering our contribution to protecting Australia’s rainforests by protecting a further 500 square metres of rainforest to bring our total amount of conserved rainforest to 1,000 square metres. If you want to learn more about how you can have a positive impact on our planet by following the next few weeks on the podcast. You can check out more information about our giving here.
We still have three more events to come this year. For all things across employer share schemes, money mistakes and dream home property purchasing, check out the full list of events below and click through to register:
Event schedule and links to book here:
How to maximise your employer share plan: Wednesday 27th October 12pm
Avoid key money mistakes: Thursday 4th November 11:30 am – 12:30 pm AEST
How to buy your $3m Bondi dream home: Thursday 18th November 12pm
What next after making your first million dollars?: Thursday 2nd December 12pm
Why you need a financial adviser if you make more than $250k p.a: Thursday 13th January 12pm
How to use property equity to invest when your LVR is below 50%: Tuesday 25th January 12pm
How to invest if you’re saving more than $5k monthly: Thursday 24th Feb 12pm
Employer share plan tax hacks and mistakes to avoid: Thursday 10th Feb 12pm
Money Hack of the week: What will have a big impact on your financial success?
Financial modelling – while it doesn’t sound very fun, it’s the key to living a fun-filled and low-stress lifestyle. During the planning process and financial modelling, Pivot Wealth took Sarah through the options she had to maximise her money for long-term financial success. Check out our full chat here.
Share market wrap
Bitcoin hit its all-time high last week, while Ethereum also crossed the $4k mark again. The Australian share market closed flat on Thursday as gains from technology and real estate stocks offset weakness from the energy and consumer staples sectors. Over on Wall Street, the S&P 500 edged closer to its record high.
Key sharemarket numbers:
- The ASX ‘All Ords’ (top 500 shares in Australia) finished the week 0.7% higher than last Friday, on 7,726.80 points.
- The US ‘S&P 500’ (Top 500 shares in America) finished the week 2.29% higher than last week, at 4,549.78 points.
- The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week 2.18% higher than last week, on 15,215.70 points.
- The Global FTSE ‘All World’ index (largest 3100 companies in the world) finished the week 0.28% lower than last week (Friday AEDT), at 7,190.30%
- The S&P Cryptocurrency ‘Mega Cap’ Index (tracking market value of Bitcoin and Ethereum) is currently at 6,653.51 for the month, up 41.94% for the month to date
Investment story of the week: Perpetual Ltd (ASX: PPT)
Perpetual Limited is an Australian investment fund and trustee group. They provide investment products and financial advice to individuals, families, financial advisers and organisations. Shares in the fund manager raced 7.5 per cent higher on Thursday, their best day since November, with less than an hour left in the session. The company this morning reported an increase in its assets under management for both its domestic and international funds businesses. The gain placed the company as the leader among blue chips in the S&P/ASX 200 as the stock climbed to a four-week high.
Money mistake of the week: Making expensive ethical investing mistakes.
Decision-making when it comes to investing is tricky and EXPENSIVE! In this chat, Paul Garner from Novo Wealth and I discussed the different traps people can fall for when investing sustainably. Have you ever made these mistakes? Check out our full chat here.
Jargon Buster of the Week: Account (Via Macquarie)
An arrangement with a financial institution for the debiting of funds; also the record or statement of these transactions. Businesses may use an account structure with another party to keep track of goods or services rendered and payments owing.
Podcast from last week: #139 w. Annabelle Chauncy – How to use money to drive social change
In this episode of the podcast, I talked to Annabelle Chauncy who is a founding Director and CEO of School for Life. It is a not-for-profit foundation, helping people in rural Uganda, empowering communities to help themselves and create their own opportunities.
We talk about the journey from a 21-year-old uni student with some passion and an idea around making a difference turning into a community that is educating over a thousand people in Africa.
Some of the financial sort of processes that Annabelle went through to get people behind her because of how she balances the risk management versus taking advantage of the opportunities for her foundation. Then we drew a bit of a parallel to how people manage their personal finances and investment strategy, and then unpacked a bit of Annabel’s personal financial journey.
Annabelle Chauncy OAM is the CEO and Founding Director of the School for Life Foundation. Annabelle is a dynamic leader and social entrepreneur who started a multi-national NGO from scratch at the age of 21, with operations in both Australia and Uganda. Over the past 10 years, through her Foundation, School for Life, she has built a team of more than 120 staff, built 3 schools in rural Uganda that provide quality education to 1025 students and outreach to more than 2000 people. Annabelle knows how to drive effective change in Australia and Uganda, navigating fast growth (50-100% year on year since inception), developing a national brand and engaging thousands of supporters to raise more than $8M in 5 years.
Annabelle has overcome huge barriers including running two high performing businesses in different continents on exceptionally tight budgets, cultural and gender biases, shifting mindsets, driving change and innovation, engaging staff, building teams and raising capital.
Smart Money upside #40
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.
Couple, late 30’s; household income ~ 200k; total assets ~ 500k; savings ~ $28k annually with family home
Funding day to day needs through debt, lack of understanding of long term impacts of personal debt,
What they wanted from us / the advice process
Set a clear plan around investments, debt and building wealth
What success looks like for them
Be free from all debts, start to grow wealth and passive income streams, start to build an adequate savings balance
What money strategy they were following before we went through the planning process
Relying on personal loans to get by, no proactive plan to reduce debt
What money strategy they choose to pursue from our planning work
Aggressively pay down debt in the short term using existing savings and regular cash flow savings
Key benefits of going through the process
Will be out of debt in 12 – 18 months – increased cash flow, better control over spending, increased awareness of long term implications of holding large amounts of debt, more confidence with money, more peace of mind and security in a current financial position
Value of advice after all advice fees year one: $99,811
Year 20 upside after advice fees: $791,580
If this story resonates and you want to chat about how to get these sorts of results, you can book an intro call here.
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.
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