Happy Monday.
If there’s one thing that myself and my team have learned through talking to many of you over the years is that most of you are outstanding savers. So let me focus on savings this week.
For years, record-low rates meant anyone with money in the bank earned little to no interest. The RBA this week lifted the official cash rate by another 0.5 percentage points, the third hike in as many months. So if you’re a saver (and don’t want to invest) here are three options for parking your cash.
Start shopping around for a better interest rate. Much like property investors will chase a lower interest rate, it’s time for you to chase a higher interest rate. Another option is a term deposit. In general, they offer higher rates than savings accounts. But be aware if you need to access that money early there is usually a large fee to break the contract. You could also consider utilising an offset account if you have a variable mortgage. You can still access the cash when you need it, but just having the money sitting there reduces the amount of interest you pay on your mortgage.
Always make sure that you ask yourself – is saving the best way that I’ll be able to achieve my goals? There are many an advantage and risks to both saving over investing.
In the news: The best way to get over the fear of investing
Learning this skill is the key to working less while still having an income – but there’s one thing standing in most people’s way. Find out how in my recent article in news.com.au.
Upcoming events:
We’ve had an overwhelming response to our events that have kicked off in this new FY so a special shout-out to all our new followers. Don’t leave it to the last minute, click through to register and join live:
Event schedule and links to book here:
- How to save more money faster – July 28, 12.30pm – 1.30pm
- Cryptocurrency Investing 101 – August 02, 11am – 12pm
- Invest smarter when the market is crashing – 17 August 12.30pm – 1.30pm
- Buy property the smart way in 2022 – August 18, 12.30pm – 1.30pm
- How to Be Smarter With Money Through Your Career – September 1, 11am – 12pm
- Money and investing hacks – 14 September 12.30pm – 1.30pm
- How to Adult: Financing 101 – October 11, 12pm – 1pm
- How to FIRE without sacrificing your lifestyle – 12 October 12.30pm – 1.30pm
Share market wrap
US stocks advanced broadly, bolstered by better-than-expected economic data and quarterly results as well as an effort by Federal Reserve policymakers to dispel the prospect of a 1% rate rise this month. Rio Tinto fell more than 4% in early trade to $91.91 on Friday, its decline contributed to the end of the ASX’s three-day winning streak.
Key sharemarket numbers:
- The ASX ‘All Ords’ (top 500 shares in Australia) finished the week -1.28% lower than last Friday at 6,798.00 points.
- The US ‘S&P 500’ (Top 500 shares in America) finished the week -2.52% lower than last week at 3,790.38 points.
- The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week -2.19 % lower than last week at 11,251.19 points.
- The Global FTSE ‘All World’ index (largest 3100 companies in the world) finished the week -1.88% lower than last week (Friday AEDT) at 7,039.81 points.
- The S&P Cryptocurrency ‘Mega Cap’ Index (tracking market value of Bitcoin and Ethereum) is currently at 2,111.14 for the month, up 11.01% for the month to date
Investment story of the week: Zip Co Ltd (ASX: ZIP)
Zip Co is yet another one of those ‘buy now, pay later’ (BNPL), platforms that emerged across the last decade and fought hard for a slither of the limelight from Afterpay. After hitting a record high of $14.53 in February 2021, shares in the embattled BNPL company are down big time. Just last month, investors shook their heads in disbelief as the Zip share price hit a multi-year low of 43.5 cents. To put that into perspective, it’s a 95% loss from the same time last year. Since then, the company’s shares have recovered some ground to finish at 54 cents at yesterday’s market close. Investors appear to have liked the decision not to proceed with the Sezzle acquisition, with the Zip share price up 8% since the announcement on Tuesday. My overall opinion on the BNPL space is much like BNPL itself – buyer beware.
Smart Money upside #78
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; early 30’s with income of approximately $66K. Total assets worth $700k. Saving about $7K annually.
Frustrations
Lack of knowledge about financial planning, as all of our focus, time and energy goes towards our business.
What they wanted from us / the advice process
Learning foundations and getting educated to determine if they are using their money in the best way to save. Clarification around super, and ensure that our foundations are strong for investements and property.
What success looks like for them
Be in our dream home and have more time. Have a better work/life balance, with investment properties, and financial foundations to allow us to live the life we want.
What money strategy they were following before we went through the planning process
Saving in cash
What money strategy they choose to pursue from our planning work
Upgrade family home, purchase multiple investment properties, banking structure, superannuation restructure, investments into an ethical portfolio, additional super contributions
Key benefits of going through the process
Education and confidence that we can achieve all our goals if we take the right steps. Having more confidence in understanding different investment vehicles and decisions has been incredibly helpful in our journey, and we are excited to see how it all plays out.
Value of advice after all advice fees year one: $11k
Year 20 upside after advice fees: $3.8m
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’re passionate about the benefits of having a solid education in all important areas of life (money included), so we’ve celebrated by providing 100 children with access to life changing e-learning education and training. 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.
Money hack of the week: Why learning more about your money is worth it.
What’s the biggest money lesson you have ever learned? For Dr Amy Silver, she had no idea that shares were available for anyone to buy. Now, look how far she’s come. In this chat, Amy and I talked about her money journey and why it’s important to strive to understand your finances, no matter your gender, income or relationship status. Check out our full chat here.
Money mistake of the week: How not structuring your day eliminates opportunity.
What does a day in the life of sales superstar Chris Muddell look like? In this episode, Chris told me about his behind-the-scenes processes for filling his pipeline and maximising his sales. It comes down to going the extra mile, getting out of your comfort zone and being courageous. Check out our full chat here.
Jargon Buster of the Week: Collateral (via Macquarie)
An asset which a borrower uses to secure funding from a lender. In the event that the borrower cannot repay their debt, this asset can be acquired by the lender.
Podcast from last week: #228 w. David McDermott – How to be an effective leader
In this episode, I chat with David McDermott, a Business & Executive Coach at McDermott Coaching. He has been coaching Executives and leaders for about 20 years. He talks about some of the trends he’s been seeing, the lessons he learned over his extensive career, working with tons of super successful people, his top productivity hacks, and the things you need to get right to be a great leader.
This episode is perfect for people who want to be better leaders within their teams, organizations and business owners who want to know how to hack their way to productivity.
Be awesome,
Ben
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, regarding your 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. 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, regarding your 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.