3rd January 2022

Smart money weekly; HNY, 2021 market winners & losers, how to cut through analysis paralysis

Ben Nash
Hey team,
Happy new year.
Hoping you’ve all had an epic festive season and a solid slice of downtime after a disrupted 2021.
I thought I’d start this week with a recap of the money made over the last year across the different asset and investment markets. Clearly, some big winners here and as the Oracle of Omaha rightly says – when it rains gold you should be catching it with a bathtub, not a teaspoon. Not quite exactly what he said but you get the point…
The numbers here:
  • Residential Property Price Index rose 21.7% over the last twelve months (ABS)
  • ASX200 is up 11.38% across the last year
  • US S&P500 is up 28.79% across the last year
  • Bitcoin is up 56%
  • US Nasdaq index is up 23.2%
2021 was a wild, but a really good one to make money. Pumped to see what 2022 brings.

Upcoming events:
We’re working on a bunch of new events for this year, so keep an eye on your inbox. In the meantime,  check out the full list of events that are coming up and click through to register:

Event schedule and links to book here:
In the News: How to invest in cryptocurrency amid a volatile market
Life-changing amounts of money is being won and lost as cryptocurrency becomes increasingly volatile and investors don’t know what to do. So I wanted to cover the key things you need to know to invest smarter with cryptocurrency in a market that’s moving.  Click here to read more.
Money Hack of the week: Why ethical investing is a win-win.
If you think you can’t get as good returns with ethical investing, you haven’t done enough research. The concept of ethical investing has been around for centuries, and the data backs it up. Kevin from Future Focus FP noted that over a decade in Australia, ethical funds are performing well, if not better, than their less-ethical counterparts. Check out our full chat here.
Share market wrap
Australian shares fell on Friday, easing back from the three-month high achieved in the prior session in the final trading session of the year that has provided a 13 per cent gain for blue chips. Over on Wall Street, the S&P 500 edged lower, after fluctuating up and down, in its final session of the year, paced by declines in communication services and information technology.
Key sharemarket numbers:
  • The ASX ‘All Ords’ (top 500 shares in Australia) finished the week 1.26% higher than last Friday, on 7,779.20 points.
  • The US ‘S&P 500’ (Top 500 shares in America) finished the week 0.68% higher than last week, at 4,766.18 points.
  • The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week -0.33% lower than last week, at 15,644.97 points.

Investment story of the week: Paladin Energy Ltd (ASX:PDN)
Paladin Energy led among blue chips on Friday, ending the session with a 6 per cent gain, capping a stellar year in which the stock has tripled. Paladin Energy is a Western Australian based uranium production company. It currently has one operating mine in Africa; the Langer Heinrich mine in Namibia. Paladin was listed on the Australian, OTC and Namibian Stock Exchanges, as well as the Munich, Berlin, Stuttgart and Frankfurt Exchanges. Over five years returns have been remarkably great. In that time, the share price has soared some 858% higher.

Smart Money upside #49
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, income ~$160K, total assets ~135k, savings $3k annually

Frustrations
Feeling stuck, overwhelmed by choice. Analysis paralysis, information overwhelm.

What they wanted from us / the advice process
Set up long-term savings plan to help plan for future investments and manage a mortgage. Savings plan in place to help fund an ideal lifestyle, ensure super money is working hard.

What success looks like for them
Would love to be debt-free with the exception of a mortgage. Maximise the opportunity with their current employer around share options.

What money strategy they were following before we went through the planning process
No strategy around banking, debt, little savings

What money strategy do they choose to pursue from our planning work
Have a clear plan on how to repay debt and start building assets.

Key benefits of going through the process
Clarity and support, the team was able to provide tough love that was needed to help set a clear plan and stay on track to achieve the goals.

Value of advice after all advice fees year one: – $4,695
Year 20 upside after advice fees: $286,042

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
Last week we started working with an amazing business owner kicking a heap of goals and doing some great things in the community at the same time. Our conversations have reminded me of the power of business to change the lives of not only the people that work with any given business, but also the broader community and the world at large. So to celebrate, we’ve provided one year of business training and an attached microloan for 20 women in Malawi. This is 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 mistake of the week: Not prioritising your savings as a couple.
When you’re in a relationship, you need to remember that you’re a TEAM. I chatted to Pivot Wealth client Kevin about why it’s important to prioritise and make decisions with his partner, Jenny, and stick to those decisions. Check out our full chat here.
Jargon Buster of the Week: Deferred establishment fee (Via Mozo)
A deferred establishment fee is an increasingly common fee that is charged by mortgage lenders if you close your loan within the first few years. A deferred establishment fee might be charged for example if you repay your loan early or switch to another lender during the first four or five years of the mortgage.
Podcast from last week:  #149 – How to cut your tax bill [Live event collab w. General Assembly]
This episode is a live recording of an event I did with the legends of the General Assembly on How to cut your tax bills.
We talk about some of the key things that you need to be aware of around your tax planning, how to be smarter with tax for the new financial year, some tax strategies, and how to maximize your deductions.
I answered a whole bunch of questions on a heap of different things from the people watching along. The idea is to get you set for the new financial year and understand the key things to be aware of, to minimize that annual ATO donation.

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.