Smart money weekly; How to build a $700k investment portfolio, money mistakes to avoid, & what’s an offset account?

Ben Nash

Hey team,

Happy Monday.

Unless you were under a rock this week, it was pretty hard to miss the fact that inflation – the main measure of the cost of living, or how much your money is worth – has blown up. The headline number was 5.1%. This is the highest it’s been in almost 20 years.

As a result, most economists expect the Reserve Bank to act sooner rather than later by raising interest rates, probably next Tuesday afternoon. So in preparation for that, here are the top three things to consider:

  1. Cash is worth less than it was previously. If you’re holding excessive amounts in cash (excluding your emergency fund), it’s worth considering your options for this moving forward.
  2. Review your home loans, check in with your bank or broker
  3. Don’t freak out about your investments. We know that interest rate rises can make for turbulent times with stocks. We’re seeing this already play out in the US. Sit tight, history tells us that this too shall pass.

As and when the changes happen, you’ll be the first to know. You can also tune into my Money News in Human Terms Tuesday podcast to hear it as it happens.

In the news: Investing tips to get a $700,000 balance
Most people think that being successful with money comes down to finding good investments. Choosing good investments is important, but it’s only half the battle. Click through to get my top tips.

Upcoming events:
Sign up for our upcoming May events, covering money fundamentals, including – money mistakes, money mindset and investing. Click through to register and join live:

Event schedule and links to book here:

Share market wrap
Australian shares clawed back some of the losses suffered from their mid-week slump, advancing for a second consecutive session on Friday thanks to gains posted by all 11 sharemarket sectors.

Key sharemarket numbers:  

  • The ASX ‘All Ords’ (top 500 shares in Australia) finished the week -2.5% lower than last Friday, on 7,695.00 points.
  • The US ‘S&P 500’ (Top 500 shares in America) finished the week -2.18% lower than last week, at 4,287.50 points.
  • The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week -2.19 % lower than last week, at 12,871.53 points.
  • The Global FTSE ‘All World’ index (largest 3100 companies in the world) finished the week -1.74% higher than last week (Friday AEDT), at 7,509.19
  • The S&P Cryptocurrency ‘Mega Cap’ Index (tracking market value of Bitcoin and Ethereum) is currently at 4,399.26 for the month, down -11.66% for the month to date

Investment story of the week: Netccentric Ltd (ASX: NCL)
Netccentric Limited operates as a social media influencer and content marketing company globally. The company primarily targets southeast Asian markets including Malaysia, Singapore, and Taiwan. It operates in four segments: Influencer Platform, Social Media Agency, Performance Marketing Agency, and Live Commerce. The company also operates Crunch, a community-driven platform that offers brand activation and content marketing solutions, as well as educational workshops and events; and offers video marketing and creative design services. With 4 different main segments that drive revenue, and the sharp rise of 20% on Thursday, its had a pearler of a ride this week.

Smart Money upside #66
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.

Individual; early 30’s, income ~$160k, total assets ~$660k saving~ $15k annually

Previously had a negative experience through employer share schemes, and wanted to know how to manage these better moving forward. Would like to upgrade existing home and remove roadblocks that are making me unmotivated to put in the time to do things with the money they have.

What they wanted from us / the advice process
Clarity on how to use my excess funds, and maximise their investments. Confident around how their money is being invested, and confident that their position is being maximised.

What success looks like for them
I would like to own a house in the near future. Have more confidence with how my funds are being used to maximise my wealth. Knowledge of what to be doing, in order to feel more comfortable with my money.

What money strategy they were following before we went through the planning process
Saving in cash and employer shares.

What money strategy they choose to pursue from our planning work
Purchase a home, invest in shares and set up a banking structure that will automate their finances so that it maximises the ability to reach their goals.

Key benefits of going through the process
Knowledge of investment products and vehicles, as well as the tax implications of their employer share plan. Additionally, the banking structure sets out a clear path towards their savings potential, and how long is needed to save for before purchasing a home.

Value of advice after all advice fees year one: $25k
Year 20 upside after advice fees: $2.1m

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 know that health care helps prevent diseases and improve quality of life. Without access to healthcare, people are far more at risk and susceptible to illnesses and widespread viruses. So we’ve supported 100 villagers in Kenya to have access to healthcare for a year. 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: How to build habits and stay motivated to save.
What are Caroline’s top tips for staying motivated with her savings? 1️ – Pay yourself first. 2️ – Avoid getting into debt. 3 – Have different accounts and build a habit of adding to each on payday. By creating habits, Caroline says she hardly notices when she’s saving and is surprised when she checks her balance. Check out our full chat here.

Money mistake of the week: How to avoid common mistakes in financial fear.
3 common FEAR mistakes. Let’s go: 1️ – Letting ourselves get into a cycle of fear or becoming paralysed altogether. 2️ – Not recognising where our fears come from. 3️ – Being reactive to fear rather than making deliberate choices. In this chat, Dr Amy Silver and I discussed these common mistakes and more when making important decisions. Check out our full chat here.

Jargon Buster of the Week: Offset account (via Macquarie)
An account linked to a loan account where any amount in credit reduces the principal of the loan for the purpose of calculating interest. An offset account is used to reduce interest calculated on the principal but has the flexibility of transaction accounts.

Podcast from last week: #166 Smart Money Challenge 7 – Next Steps
This is the final episode of the Smart money challenge. I’m talking all about the next steps and where to go from here. I talked about some of the key things we are thinking about, putting the things that you’ve learned into action, and how to make that whole process easier.

Be awesome,


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.

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.