Hey team
Happy Tuesday.
For those of you reading along in Sydney, we hope that you’ve been able to start enjoying some ‘lighter’ freedoms and participating in picnics or just general small gatherings. I for one am looking forward to things opening up when they can (safely of course). Most importantly the barber.
In property news, the government indicated that in an effort to cool housing prices they are looking to tighten lending. Whilst I can see the sentiment, the reality is that this doesn’t really affect the top end of the market. If you are looking to buy your first property and enter into the real estate market, now is a good time to have a chat to see how we can help you make that first step. Click on this link to book in time to chat.
Giving update of the week
This week we wrapped up the Steptember challenge raising awareness for Cerebral Palsy. Through the month we clocked up a bit over 1.2m steps and raised just over $5,900 through our 1-1 Money Breakthrough sessions. Massive shout out to all the people that got behind our giving. You can check out more information about our giving here.
Upcoming events:
Next up on the list of events is How a Trust can cut your tax bill by $100k which I will be live streaming on Thursday. We’ve been overwhelmed at the response to this event in particular and welcome any feedback off the back of the session. Check out the full list below and click through to register:
Event schedule and links to book here:
How a trust can cut your tax bill by $100k+: Thursday 7th October 11:30 am
How to be smarter with money: Thursday 14th October 11:30 am – 12:30 pm AEST
How to maximise your employer share plan: Wednesday 27th October 12 pm
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 12 pm
What next after making your first million dollars?: Thursday 2nd December 12 pm
Why you need a financial adviser if you make more than $250k p.a: Thursday 13th January 12 pm
How to use property equity to invest when your LVR is below 50%: Tuesday 25th January 12 pm
How to invest if you’re saving more than $5k monthly: Thursday 24th Feb 12 pm
Employer share plan tax hacks and mistakes to avoid: Thursday 10th Feb 12 pm
Money Hack of the week: How to turn your values into ethical investments.
Okay, so you want to get into ethical investing. At what point do you translate your values into the available investment opportunities? In my conversation with Tom Culver, he shared the process that goes into evaluating your ethical goals and making your portfolio choices. Check out our full chat here.
Share market wrap
Australian shares staged a storming rebound on Thursday from Wednesday’s sell-off as the major miners and banks supported a broad-based rally in the final session of the quarter. Across the week in Europe and the US, there were broad sell-offs with US bond yields moving higher diminishing the draw of equities in particular tech stocks.
Key sharemarket numbers:
- The ASX ‘All Ords’ (top 500 shares in Australia) finished the week -2.3% lower than last Friday, on 7,476.70 points.
- The US ‘S&P 500’ (Top 500 shares in America) finished the week -2.97% lower than last week (Friday AEDT), at 4,307.54 points.
- The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week -3.46% lower than last week (Friday AEDT), on 14,448.58 points.
- The Global FTSE ‘All World’ index (largest 3100 companies in the world) finished the week 0.35% higher than last week (Friday AEDT), at 7,086.42%
- The S&P Cryptocurrency ‘Mega Cap’ Index (tracking market value of Bitcoin and Ethereum) is currently at -9.35% for the month, down 4,687.41 from last week
Investment story of the week: Reece Ltd (ASX: REH)
Reece Ltd (ASX: REH) is the country’s largest supplier of plumbing and bathroom supplies. With the covid reno boom and everyone ploughing money into beautifying their homes, this stock, in particular, is up over 135% since May 2020. We’ve seen this effect with the likes of Temple & Webster (ASX: TPW) and JB Hifi (ASX: JBH), all reaping huge rewards off the back of extended lockdowns and cashed-up households with limited travel. Whilst Reece has had a bumper week, their return on invested capital (ROIC) has been steadily declining over the last 3 years. ROIC provides a measure to assess how efficiently a company is utilising capital to generate operating profits. Overall there’s a general sentiment from investors and experts that this stock, in particular, is overvalued right now.
Money mistake of the week: How small subscriptions can add up to a serious amount.
Count them up. Netflix, Spotify, Amazon Prime, Stan, Audible, Disney Plus. How many subscription services do you use? I chatted to Pivot Wealth client Nicola on the biggest change she noticed once coming on board with Pivot. She said that taking a complete look at her spending highlighted how all the subscriptions add up and made her reassess the value these provide to her. Check out our full chat here.
Jargon Buster of the Week: Basic rate (Via Mozo)
Basic rate home loans are ‘no frills’ loans that generally offer lower interest rates than standard variable rate home loans. The trade-off is that basic rate loans generally have fewer features and flexibility than standard loans. Most major bank and non-bank lenders offer a basic rate loan option. However, if you want flexible features such as an offset account, free redraw facility and the ability to make early repayments without being penalised, you may be better off with a standard variable rate loan.
Podcast from last week: #135 w. Kate McKenna – Elite performance hacks
In this episode, I talked to Kate McKenna who is a high-performance coach and helps people reach elite levels of performance.
We talk about some of the frameworks that she uses to help people get clearer on their goals so that they can set a plan of attack to actually get there.
Some of the hacks that people can use to maximize their performance, and then talk about some of Kate’s money journey and the resources that she used to up her money game.
Focusing on mental fitness and personal accountability, Kate help humans identify their optimum state and work towards making it a sustainable everyday thing…not just a fleeting dream. Making change is far easier than people realise, we can all access energy, productivity, and overall balance in life by simply applying the right tools, habits and behaviours to make the process as easy as possible.
Apple
Spotify
Stitcher
Podbean
Smart Money upside #37
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
Individual, early 30’s; household income ~ 151k; total assets ~ 340k; savings ~ $2k annually
Frustrations
Holding a significant amount of cash savings which is growing at a rate below that of inflation. Client also had no other measurable assets.
What they wanted from us / the advice process
Advice on what to do with such a large lump-sum, and in particular an investment strategy designed to roll out quickly.
What success looks like for them
A multi-pronged and robust investment strategy, involving property, shares, cash and super. Eventually, purchasing a farm to live on, whilst drawing a passive income for $65,000 per annum.
What money strategy they were following before we went through the planning process
Building cash alone
What money strategy they chose to pursue from our planning work
Buy an investment property for approximately $700K; Invest $60K into shares now and $300 per week moving forward; set-up a banking framework to help save more, and ensure super and insurances are in the best possible place for long term success.
Key benefits of going through the process
Guidance, help and a plan to meet her wants and needs.
Value of advice after all advice fees year one: $23,959
Year 20 upside after advice fees: $512,150
If this story resonates and you want to chat about how to get these sorts of results, you can book an intro call here.
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.