Pumped to bring you the first edition of the Smart Money Weekly for 2021.
Next Wednesday I’m putting on the fourth event in the ‘How to money’ series that we’re putting on in conjunction with General Assembly and Raiz Invest. I’ll be diving deep into How to be smart with your tax in 2021, register here.
Share market wrap
Markets this week have been strongly up, driven by Trump leaving the Whitehouse and the vaccine rollout kicking off in the UK and the US.
- The ASX ‘All Ords’ (top 500 shares in Australia) cracked 7,000 points for the first time since February 2020 finishing the week 2.4% higher than last Friday on 7,024 points
- The US ‘S&P500’ (Top 500 shares in America) finished the week 1.59% higher than last Friday, on 3,824 points
- The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week 1.87% higher than last Friday, on 13,201 points.
- The Global ‘All World’ index (measured with the iShares MSCI world index (all share markets around the world combined) finished the week 1.57% higher than last Friday, at 115.31
Investment story of the week
Bitcoin (BTC): Since some high highs and then some serious lows, Bitcoin (i.e. “internet money”) has topped a few records this week. Firstly, the price of bitcoin went over AUD$50k on Thursday, and the total value of all Cryptocurrency exceeded $1 trillion (with a “T”). The bitcoin price has more than doubled in the last 4 weeks, and isn’t showing any signs of slowing down in 2021.
Money hacks of the week
I know the new year is a time we all get a solid boost of motivation, whether it comes to money stuff, fitness and exercise, career, or any other important but not urgent area of our lives. So to help you capitalise on your money motivation, I’m putting out an ‘express’ podcast around 5-ish minutes, and a video version of the same content. I’ll be covering the areas I think are most important for getting on the front financial foot in 2021. If you want to keep up to date you can subscribe to the How to be successful with money podcast here on Spotify, Apple, Stitcher, and Podbean.
Money mistake of the week – Mindset: waiting for the tomorrow that never comes
I’ve recently been chatting with someone that reminded me just how much our money mindset can work against us. This person had fallen into a trap I’ve seen a bunch of times, and sadly one that can seriously sabotage your chances at true financial success – but an easy one to fall into.
This person (like many of us) had a bunch of personal stuff going on. From a financial perspective, they were not where they wanted to be, but the problem was that they’d convinced themselves that this personal stuff was a barrier to them getting on top of their money.
The thing is, there is no ‘right’ time to start being strategic and getting on top of your money. We can ALWAYS find a reason to put things off to the tomorrow that never comes.
When people get on the front foot with their money, almost all of them kick themselves for not starting sooner. But you can’t take back the past. The best time to start was always 10 years ago. But the second best time is now. Don’t let your thinking sabotage your chances of success.
Weekly jargon buster: Balance transfer (via Macquarie)
The movement of the amount owing from one account to another account. A credit card balance transfer, for example, involves the movement of the amount owed on one or more credit cards to another account or institution, usually for the purposes of consolidating debt and/or taking advantage of better interest rates and/or payment terms.
Advice upside
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 from one of our clients to help you take your money game to the next level.
Numbers/Background
Couple in their 30’s, one in entertainment, one design, household income $165k, saving ~$3k monthly. No property investments, share portfolio $30k, $110k cash
Frustrations when first coming to see us
Want to invest, don’t know what to do given moving to US next year then Back to Australia in 5 years
What they wanted from us / the advice process
Do we invest or save with our money? how do we set up an investment portfolio, and where does property fit?
What an awesome result looked like for them
Knowing the pathways and understanding the impact of doing A over B over C
What money strategy they were following when we started working together
Save, had a money plan separate to each other. Very ad hoc
What money strategy they chose to pursue from our planning work
Invest $95k into the sharemarket, regular investment plan, save for wedding, and have cash available to return to Australia without stress of having to find work immediately
Key benefits of going through the process
Clarity, pulling the trigger on a strategy, having super looked after, bank account structure set up in the UK which can be replicated in US and again here in Aus when they return.
Upside received as a result of the direction taken from the planning process, $37,984 in year 1, upside of $1,749,915 in year 20.
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 to this email 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 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. Financial services guide.